Supporting Residential Roof-Top Solar and other renewable resources by clarifying eligibility of third-party leasing and financing net metering arrangements

ERO number
019-4554
Notice type
Regulation
Act
Ontario Energy Board Act, 1998
Posted by
Ministry of Energy
Notice stage
Proposal
Proposal posted
Comment period
November 1, 2021 - December 16, 2021 (45 days) Open
Last updated

This consultation closes at 11:59 p.m. on:
December 16, 2021

Proposal summary

The Ministry of Energy is proposing to make amendments to O. Reg. 541/05 (Net Metering), made under the Ontario Energy Board Act, 1998, to provide greater clarity on eligibility of a customer who is leasing or financing electricity generation equipment  used for net metering.

Proposal details

Net metering is a billing arrangement between an electricity distributor and a customer, such as a homeowner or business. Under a net metering arrangement, the customer generates electricity from a renewable source of energy, such as residential roof-top solar panels, for their own use while still drawing electricity from the grid when needed. The customer is billed only for the amount of electricity they consume from the grid, plus any applicable fixed or demand-based charges, and the customer receives a credit on their bill for any electricity they generate that they do not consume and send to the grid. Credits are valued at the same volumetric rates customers are charged for electricity consumed from the grid and can be applied to any volumetric charges on the customer’s bill. To qualify for net metering, a customer must meet the requirements of an “eligible generator” as defined in the net metering regulation, O. Reg. 541/05.  This includes qualifying as a “generator” under the Ontario Energy Board Act, 1998, which is discussed in a recent Bulletin issued by Ontario Energy Board staff on October 25, 2021.  

The Ministry of Energy is proposing to amend the net metering regulation to clarify criteria for a customer to qualify as an eligible generator when they are leasing or financing the generation equipment used by the customer for net metering. This would help service providers and customers in Ontario better understand the types of third-party arrangements they could enter into.

To inform the regulatory amendments, the Ministry would like to hear input from individuals and businesses interested in leasing and financing arrangements under the net metering regulation. This may include information about the types of leasing and financing arrangements that are of interest, the role of third-party leasing and financing providers, the role of customers that would be entering into leasing and financing arrangements with third-party providers, how lease or financing payments would be structured, how the operation of the equipment would be structured, and any other relevant terms of leasing and financing agreements for the purposes of the customer obtaining renewable generation equipment for net metering, as well as any consumer protection issues or concerns. Such feedback would help to inform the Ministry of Energy’s assessment of issues of clarity in the regulation and approach to amending the regulation to clarify eligibility.  

Analysis of Regulatory Impact

This regulatory proposal is not currently expected to introduce any new administrative costs for businesses. Rather, clarification of this regulation may lead to increased interest and uptake in net metering and result in increased energy savings for the new participating residential and business customers. Clarification of eligibility criteria in the regulation as it relates to leasing and financing arrangements between the customer, who must qualify as the eligible generator, and a third-party may result in increased interest in net metering, which could have an indirect impact on system costs and risks to consumers. These potential impacts will be assessed as part of the Ministry’s consideration of feedback on this proposal. The Ministry is seeking input on any potential benefits, impacts, and costs to electricity utilities, net metering customers, and other stakeholders related to the proposed regulatory changes.

Supporting materials

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Contact

Sarah Heiman

Phone number
Email address
Office
Ministry of Energy, Conservation and Renewable Energy Division
Address

77 Grenville Street, 5th floor
Toronto, ON
M7A 2C1
Canada

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Contact

Sarah Heiman

Phone number
Email address
Office
Ministry of Energy, Conservation and Renewable Energy Division
Address

77 Grenville Street, 5th floor
Toronto, ON
M7A 2C1
Canada

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