New Brunswick

NB Power should get head start on solar power, study suggests

A study commissioned by NB Power suggests consumers are willing to pay a premium for solar energy and the utility could profit if it provides a leasing option for customers soon and gets a head start on establishing itself as New Brunswick's dominant solar provider.

Utility still not sure it will proceed

Installing solar panels on New Brunswick houses is not common but a study says NB Power should encourage more of it. (Robert Jones/CBC)

A study commissioned by NB Power suggests consumers are willing to pay a premium for solar energy and the utility could profit if it provides a leasing option for customers soon and gets a head start on establishing itself as New Brunswick's dominant solar provider.

"Over the next eight years NB Power's solar lease (program) would double the expected solar NB Power a 50 per cent market share," says the study by Montreal's Dunsky Energy Consulting.

It is the second study in the last three years looking at whether NB Power should launch a solar power program for homeowners and businesses although the utility is still undecided on whether to proceed.

"We are currently studying this option,"  said NB Power spokesman Marc Belliveau

NB Power has released the latest study, which looks at the feasibility of financing solar panel installations and then renting or leasing them back to building owners, as part of its current application for a rate increase with the Energy and Utilities Board.

$1M in profits in 8 years

The study says an average five kilowatt household solar power system would cost $15,000 to install and provide the home about 6,100 kilowatt hours of electricity per year. It suggests the utility could charge subscribers up to $150 per month on their bills to pay for it.

That works out to 30 cents per kilowatt hour — nearly triple NB Power's current household rate — but the study predicts 860 homes and businesses would still sign on over the next eight years, eventually generating about $1 million per year in profits for the utility.

The study says lowering the monthly payments would attract more customers but that would eat into profits and NB Power will have to decide which is more important.

"The choice of leasing rate is essential to encourage customer adoption and generate returns for NB Power," the study says.

Solar power inevitable

NB Power is looking at a study that says it should consider leasing solar power systems to homes and businesses. (Robert Jones/CBC)

The Dunsky report says widespread solar power adoption by tens of thousands of homes and businesses is inevitable in New Brunswick after 2025 no matter what NB Power does given expected improvements in solar technology and costs. 

That will harm NB Power's finances as demand for the electricity it produces at its large generators falls but the report suggests the utility may be able to offset losses if it gets in on the solar transition early enough to head off potential competitors.   

In August Saint John Energy — which already rents heat pumps to hundreds of NB Power customers — announced it too is looking at the potential of leasing solar panels to the public.  

"I would say well within the five-year time frame," Saint John Energy CEO Ray Robinson said. "Maybe sooner."

The Dunsky study does not mention the Saint John utility by name but does warn inaction by NB Power on leasing solar panels to customers could allow a "third party" to do it instead "potentially gaining significant market share."

Chris Rouse, a proponent of renewable energy who has participated at two of NB Power's last three rate hearings said solar energy has some shortcomings in New Brunswick but credits the utility for looking at making it available.

"I strongly support this method of adopting solar power and give a hats off to NB Power for being forward thinking on this issue,"  said Rouse,

Because solar panels produce more electricity in the summer than in the winter Rouse said they do little to help with the huge consumption spikes that drive up NB Power's costs between November and March.

As of January there were only 370 kilowatts of solar capacity installed in New Brunswick. The Dunsky report predicts with an NB Power lease program that will expand 18 fold to 13,700 kilowatts by 2025 and to 310,000 kilowatts by 2040.

About the Author

Robert Jones


Robert Jones has been a reporter and producer with CBC New Brunswick since 1990. His investigative reports on petroleum pricing in New Brunswick won several regional and national awards and led to the adoption of price regulation in 2006.


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