CanREA applauds the Government of Ontario for new regulatory change to enable third-party net-metering arrangements
Ottawa, April 21, 2022—The Ontario Government today announced amendments to the province’s net metering regulation to enable third-party ownership arrangements, such as leasing, financing and power purchase agreements (PPAs), providing electricity customers in Ontario more options to participate in net metering.
“The Canadian Renewable Energy Association applauds the Government of Ontario for taking this important step to improve the accessibility of solar net metering,” said Robert Hornung, CanREA’s President and CEO.
“This regulatory clarity will enable our industry to move forward in providing Ontario consumers with more options to lower their energy costs and to reduce GHG emissions, while helping to drive job creation and growth in the province’s renewable energy sector.”
These changes will dramatically reduce the up-front cost barrier to the adoption of solar net metering. They signify a major step forward for consumer choice and improved accessibility of renewable energy.
“This will open up new market opportunities for solar developers in Ontario,” said Nicholas Gall, CanREA’s Director of Distributed Energy Resources and Director for Ontario, “while at the same time contributing to achieving the GHG emissions reduction goals set out in the Province’s Made-in-Ontario Environment Plan and helping consumers to reduce their energy costs.”
Going forward, Ontario homeowners or businesses will have the right to enter into one of two third-party financing arrangements for rooftop solar PV:
- Solar lease: A customer pays a third-party developer for the use of an on-site solar PV system over a specified period of time, rather than paying for the power generated –pay per month (e.g., 15-year term);
- PPA: A third-party developer sells the power generated by an on-site solar PV system to the customer for a fixed period of time (e.g., 15-year term) and at a fixed per-kWh rate (less than what is charged by the LDC). PPAs inherently afford greater consumer protection as consumers only pay for power produced.
As described in a previous CanREA statement on this issue, the advantages of third-party financing of net metering include:
- Enhanced consumer protection: Maintenance and replacement costs would be included in the service agreement. The lessee or PPA purchaser is protected in the event that the solar PV equipment underperforms or malfunctions. Solar companies offering PPAs would be covered under OEB Retailer Licensing obligations, thus further enhancing consumer protection.
- Levelling the playing field for consumer choice: Access to third-party financing opportunities reduce the gap between haves and have-nots; more consumers are able to access net metering.
- Avoided opportunity cost: All consumers, both businesses and households, are able to keep more cash on hand while benefitting immediately from electricity bill savings.
- Easier budgeting and cashflow management; preservation of lines of credit.
- Tax planning for business consumers: Leasing/PPA arrangements may be preferable for businesses in that they can offer income tax planning advantages (leased equipment treated as an expense rather than depreciating purchased equipment as a capital cost).
Third-party ownership models are proven and very well established in other provinces (e.g., Alberta, Nova Scotia) and in the United States, where the US Solar Energy Industries Association (SEIA) reports that as of 2017, 57% of all installed non-residential solar PV capacity was third-party owned.
“The Canadian Renewable Energy Association applauds the Government of Ontario for taking this important step to improve the accessibility of solar net metering. This regulatory clarity will enable our industry to move forward in providing Ontario consumers with more options to lower their energy costs and to reduce GHG emissions, while helping to drive job creation and growth in the province’s renewable energy sector.”—Robert Hornung, CanREA’s President and CEO
“These changes will open up new market opportunities for solar developers in Ontario, while at the same time contributing to achieving the GHG emissions reduction goals set out in the Province’s Made-in-Ontario Environment Plan, and helping consumers to reduce their energy costs.”—Nicholas Gall, CanREA’s Director of Distributed Energy Resources and Director for Ontario
For more information or for interview opportunities, please contact:
Canadian Renewable Energy Association
About the Canadian Renewable Energy Association (CanREA)
The Canadian Renewable Energy Association (CanREA) is the voice for wind energy, solar energy and energy storage solutions that will power Canada’s energy future. We work to create the conditions for a modern energy system through stakeholder advocacy and public engagement. Our diverse members are uniquely positioned to deliver clean, low-cost, reliable, flexible and scalable solutions for Canada’s energy needs. For more information on how Canada can use wind energy, solar energy and energy storage to help achieve its net-zero commitments, consult “Powering Canada’s Journey to Net-Zero: CanREA’s 2050 Vison.” Follow us on Twitter and LinkedIn. Subscribe to our newsletter here. Become a member here. Learn more at renewablesassociation.ca