Ontario’s Ministry of Energy is undertaking a review of the province’s programs for individuals who generate their own renewable energy. There are currently two existing programs for small-scale renewable energy generation at the consumer level: the net metering program and the microFIT program. In July 2015, the Ministry of Energy established a working group to provide guidance and recommendations on the design and implementation of a new net metering/self-consumption (NM/SC) program. Throughout the summer and fall of 2015, the Ministry held a number of targeted engagement sessions to obtain feedback from industry stakeholders for use in the development a new NM/SC program proposal. The Ministry intends to transition to the new program by late 2017 or early 2018.
The current net metering program came into force in 2006 with enactment of the Net Metering Regulation. The Regulation required electricity distributors to allow eligible generators to deliver electricity to the distributor and receive a refund. The customer would only pay for his or her net consumption of electricity. Eligible generators were those producing electricity solely from renewable sources (solar, hydro, biomass or wind) for the purpose of the generator’s own consumption with a capacity of less than 500kW.
A second – and more popular – option for consumer generators has been the microFIT program. The microFIT program was launched in 2009, following the passage of the Green Energy and Green Economy Act. Under the microFIT program, consumer generators are compensated under a tariff system where all electricity generated by the participating consumer is sold to the electricity grid. The consumer does not directly use any electricity generated. The microFIT program, like the existing net metering program, is for small-scale projects (less than 10kW) which rely solely on renewable sources.
The Ministry of Energy is currently consulting with stakeholders on a new NM/SC program concept proposal to replace the existing net metering program and microFIT program. The proposed NM/SC program would allow consumers to use their own locally generated electricity and export electricity to the grid where generation exceeds consumption. One key difference from the existing net metering program is that under the proposed NM/SC program, while consumers would be charged retail rates for their electricity consumption minus the amount of electricity generated, any net excess generation would be credited at a price that reflects the project’s value to Ontario’s electricity system. This is also described as value-based compensation. Value-based compensation may include both avoided market costs and, potentially, also societal and environmental benefits.
The Ministry of Energy expects to post the NM/SC program proposal to the Environmental Registry for public comment in late 2015 or early 2016.
* Co-authored by Michael McDonald, an articling student at Aird & Berlis LLP.