Streamlining and clarifying net metering regulatory requirements

Community Net Metering

Community Net Metering (CNM) is a net metering model that allows a customer, who has a group of load accounts and renewable generation, to share net metering credits across the participating accounts. The CNM framework was launched in 2021 through O. Reg. 679/21 (Community Net Metering Projects), which authorized the West 5 development in London, Ontario as a CNM demonstration project.

The ministry has been working with stakeholders and the Ontario Energy Board to monitor the implementation of the demonstration project.

The ministry is proposing to remove the bill credit allocation limit in section 8(7) of the CNM regulation with the aim to reduce administrative burden and assist the implementation of the demonstration project.

Although the bill credit allocation limit was implemented to encourage integration of solar generation, limit use of the distribution system and avoid cost impacts for non-participating customers, other project design parameters specified in the regulation ensure these objectives are met.

Lessons learned from the CNM demonstration project will inform further opportunities to enhance the net metering framework in Ontario.

Third-Party Ownership Net Metering

In 2022, the ministry made regulatory changes to clarify the eligibility of third-party ownership (TPO) net metering arrangements such as leasing, financing and power purchase agreements (PPAs). TPO net metering improves access for customers to participate in net metering by removing financial barriers of the upfront capital costs of installing a renewable generation system.

The ministry has been monitoring the implementation of these changes. Stakeholder feedback shared with the ministry notes that there is lack of clarity in one section of O. Reg. 389/10: General made under the Energy Consumer Protection Act, 2010, which may pose unintended risks for third party generators involved in PPAs.

Section 14 (1) (a) of O. Reg. 389/10 outlines circumstances in which a retail contract would be deemed void, including when a consumer cancels a contract. This section was amended in 2022 with the intent to exclude third party generator retailers from these provisions in light of the differences between conventional electricity retailing and a retail contract between a third party generator and a consumer for the purposes of net metering. The ministry is proposing amendments to clarify this section to provide greater clarity around contract cancellation provisions for both third party generators and customers. This will support energy consumers who are interested in participating in net metering, through use of technologies like rooftop solar, to lower their energy costs.

In summary, these proposed regulatory changes related to CNM and TPO net metering arrangements would, if approved, provide immediate benefit to consumers while we continue to explore further options to enhance Ontario’s net metering framework to support innovation and customer choice.