Recently, several initiatives have been introduced to help reduce the complexity, costs and uncertainties for smaller scale renewable energy projects.
As a “small energy producer” you have three options:
- Off Grid: Produce electricity and use it without connecting to Ontario’s distribution system.
- Net Metering: Produce and consume electricity, while sending surplus energy to the grid. Receive a credit from your electricity supplier towards future electricity consumption.
- Standard Offer Program: Enter into a contract with the OPA to sell electricity as a licenced generator connected to the Distribution System.
Net Metering is an agreement between an electricity distributor and a customer who generates electricity from renewable resources. Electricity you produce, but don’t use, is sent to the distribution system in return for a credit towards future energy costs.
| The quantity of electricity you supply to the distributor – is subtracted from the quantity of electricity you take from the distributor – resulting in a “net” total from which your bill is calculated. |
These generation credits can be carried forward for up to 12 months to offset future electricity costs – you don’t get paid for your excess generation.
Generating sites must be approved by the Electrical Safety Authority (ESA) and a Connection Impact Assessment may be required by your electrical distributor.
Suitable for:
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Smaller or micro-generating systems such as small farms, light manufacturers and households.
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Generators who consume most of what they produce.
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Maximum production allowable is 500 kW.
Benefits:
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Less complicated qualification process – not required to be licenced as a generator.
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Relatively simple and standard metering and grid connection.
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Eliminates the need to store surplus electricity.
- The Standard Offer Program reduces the barriers and sets payment rates for small energy producers who want to sell renewable energy to the provincial system:
- Located in Ontario with an installed capacity of no more than 10 megawatts (MW)
- Connected to the Ontario electricity distribution system at a voltage of 50 kilovolts (kV) or less through an eligible local distribution company (LDC)
- Generates electricity from wind, thermal electric solar, solar photovoltaic, renewable biomass, bio-gas, bio-fuel, landfill gas or water.
- Began commercial operation after January 1, 2000
- And can meet other eligibility requirements such as connection impact assessment, environmental assessment, demonstrated site access, as well as other contractual terms.
Suitable for:
- Larger facilities than those for Net Metering.
- Businesses for whom electricity generation is a viable additional area of operations.
- Organizations and individuals who can devote time and resources to establishing a renewable energy project or who have existing assets that qualify under the Standard Offer Program.
Benefits:
- Revenue certainty - a fixed price for sales of electricity.
- Premium rate for reliable delivery during peak demand hours.
- Long-term contract – 20 years.
- Standardized, simplified regulatory process.
What about Off-Grid?
For some renewable energy projects, the cost of connecting to the distribution grid is a prohibitive or unnecessary cost. In other cases, it's simply not practical because of the remoteness of the location - the distance from the grid.
These 'micro-generating' projects can still take advantage of several programs to support renewable energy generators. Note that these incentives are also available to larger generators.
- Corporate retail sales tax rebate for building materials
- 100 per cent corporate tax write-offs for the cost of newly acquired assets
- Capital tax exemption for newly acquired assets.
- Retail sales tax rebates are available for alternative energy systems installed in residential premises, if purchased between March 28, 2003, and November 25, 2007. This rebate applies to components, upgrades or expansions.
