Renewable energy and you: What the net-metering policy means for your bill

Two experts explain the details of a new policy that allows you to generate your own power and sell to the provincial grid.

Newfoundland Power and PhD candidate studying renewable energy break down the details

Newfoundland and Labrador is the last province in Canada to bring in a net-metering program. (Patrick T. Fallon/Bloomberg)

It's a term you'll be hearing frequently in the coming weeks, but what exactly is "net metering"?

The Newfoundland and Labrador government announced May 19 that the PUB had approved a net-metering plan, making this the last province in Canada to implement one.

Solar energy potential in St. John's is actually better than the solar energy potential in Berlin.- Nick Mercer

"Newfoundland and Labrador is finally joining the party," said Nick Mercer, a PhD candidate from this province studying renewable energy at the University of Waterloo.

Applications will be accepted as of July 1, but there is limited information so far on Newfoundland Power or Newfoundland and Labrador Hydro's websites.

So, what exactly is it?

Essentially, net metering makes it legal for residents and businesses to install renewable energy equipment on their property, while hooking into the utility-owned infrastructure.

Nick Mercer is a PhD candidate at the University of Waterloo and is studying renewable energy. (Submitted Photo)

"You can build your own small-scale wind turbine, solar panel, you can put them on your home," said Mercer. "You can produce your own electricity which you'll use in your house, and when you produce excess electricity that you don't need, you can sell it through the grid to your neighbours and other businesses in the area.

"So it's a way to encourage renewable energy development and to help people save a little bit of money."

How much would this cost?

When it comes to installing solar or wind energy equipment, prices vary, depending on the system you're looking for.

An average solar panel system for a home in this province is estimated to cost $20,000 and has an average lifespan of 20 years. That doesn't include fees associated with hooking into the utility.

But Mercer said in the last couple of years, prices for solar panels have significantly dropped, while the technology has been developing quickly. Wind turbines tend to come at a higher cost, given the need for installing larger infrastructure.

Small-scale wind turbines tend to run a higher cost than solar panels, and the net-metering policy doesn't allow for large-scale turbine generation, just individual. (Orlando Sierra/AFP/Getty Images)

"The net metering policy doesn't put any restrictions on the type of renewable energy that you're going to use," said Mercer.

"It can be solar, it can be wind, it can be geothermal. There's a whole continuum of options — wherever on the Earth you can find movement you can try to harness that electricity through net metering."

But the policy coming into effect is not intended to encourage renewable energy development, Mercer added, so expect to generate enough power to offset your own needs.

"It's more set out to achieve environmental goals and it's more intended as a hobby, as an interest, as something to pursue, not something to create profit."

Isn't it too foggy for solar panels?

Yes, parts of Newfoundland and Labrador are notoriously foggy and cold, but Mercer said it's a common misconception that our climate doesn't lend itself to solar energy.

Sure, it's often foggy in St. John's, but Nick Mercer says there's still a lot of potential for solar energy generation. (Submitted by Alick Tsui )

The commercial viability isn't as high as, say, southern Ontario, Mercer said, but it's still pretty good.

"The solar energy potential in St. John's is actually better than the solar energy potential in Berlin, Germany. And Berlin, Germany, is amongst the world leader in solar energy development," he said.

"I wouldn't let the fog scare you off from net metering."

What does the net-metering cap mean?

The overall provincial cap for the net-metering program is five megawatts. The individual limit per installation is 100 kilowatts.

With the electricity rates set to increase once the Muskrat Falls project comes online, Mercer was asked if having more people generating their own electricity would further increase the financial strain.

Newfoundland Power spokeswoman Michele Coughlan advises customers to consult with their utility before paying for any kind of renewable energy equipment installation.

"That's a concern from a lot of utilities, that if you have too many people start producing their own electricity and they're not paying in to Muskrat Falls anymore then that's going to raise electricity rates for everyone else in the province," he said.

But Mercer said even if the cap is reached, he can't see that being much of an issue.

"In Nova Scotia, for example, for every 10 megawatts of solar energy that they've added, it's added 0.2 per cent to everybody else's electricity bill."

What shows up on my bill?

Newfoundland Power said it's extremely unlikely that the overall cap, or even the personal cap, will be reached.

"Installations across the country for customer-owned generation usually range in the neighbourhood of five kilowatts to 7.5 kilowatts. That's what we've seen as being typical," said Michele Coughlan, a spokeswoman with the utility.

Nick Mercer says a large-sized wind turbine in the St. Lawrence area is able to generate three megawatts of energy. (Reuters)

"When you look at the cap of 100 kilowatts, that would provide customers in the neighbourhood of 700 to 1,000 customers that would be able to participate in our net-metering service option, with that total provincial cap of five megawatts."

What if you generate more than you need?

With the average home consuming roughly five to seven kilowatts, Coughlan said "it is possible" customers may not need to pay a power bill again.

If you end up not being able to generate enough energy to meet your own needs, you'll be able to access the power supply and draw from that, Coughlan said.

Then, in months where you generate more than you need, a credit will be applied to your account for next month's bill on a 12-month annual basis after a year-end review.

"If there is excess energy at the end of the year, that would be credited back to the customer," Coughlan said, adding that would be paid back at the same rate Newfoundland Power pays to Hydro for the power.

With files from Ramona Dearing and the Central Morning Show