BC may currently have a surplus of power, but as electric vehicle adoption increases and decarbonization of the economy through electrification expands, the province may one day need more clean power.
So why does BC Hydro want to discourage citizens, businesses, community groups and municipalities from producing more clean power through rooftop and community solar installations?
That’s one of the questions being raised by interveners in a BC Utilities Commission (BCUC) review of a BC Hydro plan to amend its net metering program.
The bottom line for BC Hydro is that it doesn’t need the additional power. It is also paying net metering customers rates that are above wholesale electricity market prices, and in a handful of cases, some customers are essentially running a commercial venture by generating profits from a program that was never intended to be a commercial venture.
Under net metering, homeowners, community associations, businesses and even municipalities that invest in small clean-energy projects can get credits for producing surplus power.
Since it was introduced in 2004, the program has encouraged more than 1,800 B.C. homeowners, community organizations or businesses to invest in clean power, mostly in the form of rooftop solar power. The City of Fort St. John used the program to invest $1.4 million in a micro-hydro power project by installing a turbine in a treated waste-water outfall to generate electricity. But BC Hydro wants to change the terms of the net metering program and pay customers less than they currently get for surplus power. It also wants to place limits on the capacity of solar installations.
Kjell Liem, representing the BC Community Solar Coalition at the BCUC, said the changes could discourage community groups from investing in solar gardens.
In the absence of the now-cancelled standing-offer program – under which small-scale renewable energy projects were built – the net metering program is now the only program in B.C. that might allow businesses, individuals, First Nations and community groups to develop solar gardens or other small clean-power projects.
“We feel it’s moving in the wrong direction,” Liem said. “Net metering is just now becoming a viable proposition, and it’s the wrong time to be trying to scale it back.”
Homeowners, businesses and organizations that have already invested in small clean-energy projects or rooftop solar installations see the proposed changes as moving the goalposts.
“The city is … concerned about the overall spirit and fairness of BC Hydro and BCUC potentially changing the regulatory regime and governing rate schedule of a project midway through its life cycle,” the City of Fort St. John stated in its submission.
“A deal is a deal,” David Slade, a Cobble Hill homeowner who has expanded his initial solar array from 18 to 47 panels, and now produces an annual surplus of power, wrote in his submission to the BCUC.
“I know several people who cashed in RRSPs to purchase large solar installation with the reasonable expectation that rates would never go down, but would more likely increase over time with increases in residential rates. BC Hydro made the rules and allowed, in fact encouraged, the installation of significant solar arrays.”
There are more than 1,800 net metering customers in B.C., about 98% of them rooftop solar homeowners. The amount of electricity they generate is minuscule in the context of BC Hydro’s total generating capacity, and the program costs BC Hydro about $325,000 per year.
A typical rooftop solar installation will cost a homeowner between $9,000 and $16,000, and the payback period at current rates is about 23 years, according to BC Hydro.
Most net metering customers produce far less power than they consume and therefore don’t produce the kinds of surplus power that would generate a profit. BC Hydro pays $0.10 per kilowatt hour (kWh). But that’s more than what it would typically pay or receive for power bought or sold on the wholesale market.
It therefore wants to tie rates to the Mid-Columbia wholesale electricity hub (Mid-C). That could result in rates being set as low as $0.03 per kWh.
Shaun Mayhew, sales and marketing manager for Penfolds Roofing and Solar, doesn’t think the changes will affect the average homeowner.
He said there will still be an incentive for homeowners to install rooftop solar and lower their electricity costs. The main impact will be on businesses or groups that build beyond their consumption capacity.
“It’s really only the people who own enough space to create twice or three times or four times the electricity than they consume,” said Mayhew.
Most homeowners don’t make money from the surplus power they sell to BC Hydro under the net metering program. Of the 1,851 net metering customers, just five account for 75% of the roughly $325,000 that BC Hydro pays out annually, according to BC Hydro’s submission to the BCUC.
William Andrews, a lawyer representing the BC Sustainable Energy Association, said the organization doesn’t quibble with BC Hydro’s attempts to bring the net metering payments in line with market prices. But it questions the need to set limits on how much capacity a citizen, business or community organization can build.
If the BCUC approves BC Hydro’s proposed rate changes, limiting generating capacity will be unnecessary, he said, because, with lower rates, there would be no financial incentive to overbuild, which is BC Hydro’s primary concern.
Andrews added that if homeowners or businesses want to invest now, in the hope that at some point there may be a demand for their power, they should be free to do so.
Why solar is not a big seller in B.C.
Compared with some U.S. states, like California, Nevada and Texas – or even with Ontario – solar power is almost non-existent in B.C.
In California, solar provides about 12% of the state’s power. While most of that comes from large utility-scale solar power plants, about 230,000 homes in California have rooftop solar panels, and under California law, all new homes built will have to have rooftop solar power starting in 2020.
By contrast, the percentage of power generated from solar power in B.C. is so low it can be rounded off to zero.
At the Generate 2018 conference in November, panellists were asked why there isn’t more emphasis placed on solar power in B.C. – particularly rooftop solar.
It was pointed out that, in places like California, rooftop solar incentives make sense, because the state gets a lot of sunshine and natural gas still generates about half of its power.
B.C.’s power generation, by contrast, is already 98% “clean” or zero emission, thanks to large hydro power, run-of-river hydro power and, to a lesser extent, wind power. Adding rooftop solar in B.C. would therefore not displace dirtier sources of power, the way it does in California or Texas.
“The added value of solar in your plan – please do it if you want to, it’s awesome,” Colleen Giroux-Smith, vice president of corporate relations for Innergex Renewable Energy, said during the Generate 2018 panel discussion. “But you’re not displacing a dirty energy product by doing it.”
“This isn't strictly true,” said Martin Mullany, CEO of Bridge Power and interim executive director for Clean Energy BC.
Although it generally produces a surplus of power, B.C. also sometimes imports power, some of which comes from provinces or states that produce power with coal or natural gas.
“It is somewhat contradictory that B.C. has a ‘CleanBC’ policy to help us decarbonise whilst the Crown owned utility company is importing carbon based power and selling it to us without us even knowing it,” Mullany said.