## 2 Related Works  
In a world grappling with the challenges of climate change, governments worldwide have taken significant steps to promote distributed energy sources and reduce dependence on fossil fuels. However, one of the main drivers is adopting the proper financing mechanism [17]. These mechanisms encourage consumers to become prosumers and contribute to power generation at the edge of the grid where energy is consumed. Moreover, they enable countries to achieve individual and collective renewable energy targets. The main idea behind these financing mechanisms, such as NEM, FiT, and PPA, is to incentivize consumers to generate their own electricity and contribute to the grid. However, despite this shared objective, each mechanism has significant differences in the operation and benefits offered. This section thoroughly explores these compensation mechanisms, highlighting their unique features, advantages, and considerations. The NEM mechanism charges consumers for their net electricity consumption from the grid after deducting the electricity they have injected into the grid. This bidirectional flow of energy is measured with bidirectional meters, also known as net meters, which track the net flow of electricity. Prosumers are typically compensated for their injected electricity at the retail electricity tariff, as their electricity consumption is offset by the electricity they have injected into the grid. In contrast, FiT schemes use two separate meters to track electricity generation and consumption from the grid and compensate for them differently. While energy consumed from the grid is priced at the retail electricity tariff, the excess energy injected by the prosumer into the grid is renumerated at a different predefined rate set by the regulator or the utility company, known as the \"feed-in tariff.\" These FiTs are often set at a higher tariff than the retail market rate to incentivize consumers to install renewable energy power generators. However, they have led to some issues, such as in Germany and the United Kingdom (UK), where rooftop solar photovoltaic (PV) adoption increased due to higher FiTs but has since been reduced [18; 19]. Under the FiT framework, consumers should consider the long-term stability and potential changes in FiT rates. Although these systems are broadly adopted, they do not offer fair compensation to the prosumer since the timing of the energy injection into the grid is not considered. For instance, under a NEM scheme, 1 kWh injected into the grid during peak hours should not have the same weight as 1 kWh injected during off-peak hours [20] since excess renewable electricity is more valuable during peak load hours compared to off-peak hours. Additionally, an oversupply of renewable electricity during low demand can result in curtailment or negative electricity prices in wholesale markets [21]. Prosumers can optimize their earnings from distributed renewable generation by utilizing battery storage systems or adjusting their demand in response to time-varying compensation tariffs. Because prosumers are incentivized to feed electricity into the grid when necessary and draw from it when demand is low and renewable output is plentiful, this improves system flexibility. Additionally, incorporating locational signals in tariff designs can help reduce network congestion and potentially defer or minimize network investments [22]. These signals are used to incentivize efficient use of the electricity grid and resources, as well as to manage congestion and optimize system reliability. Moreover, electric tariffs may include additional charges such as customer fees, service fees, correction charges, and rebates, which are not accounted for in the compensation given to consumers under the NEM mechanism. Therefore, the best way to look at the NEM mechanism is that it offers a free virtual storage system for the prosumer, by injecting his excess energy into the grid when it is not needed and getting it back at any time for the same price.