Monday, April 23, 2018

Is BC Hydro about to Kill Solar Energy in BC?

On April 20th BC Hydro announced changes to the net-metering program. The announcement was made late on a Friday afternoon, which is when one makes announcements that you hope the public and media will ignore.

About 95% of the projects under net-metering are solar energy (photovoltaic) projects. The immediate change would limit the size of projects based on the utility customer's electrical consumption in the prior year. It would also end the payment for excess annual power. This change won't have a major affect on new participation since most projects would fall below this threshold.

What is more worrisome is the contents of the submission to the BC Utilities Commission (BCUC) which will need to approve the change.  In the submission it is clear that BC Hydro thinks that there is already too much enrolment in the net-metering program.  And they state they will further review the program and make another submission to the BCUC before the end of the year. Reading between the lines it seems their next submission will restrict net-metering further or end the program. 

Given that imposing further restrictions on the program would be administratively difficult the most likely outcome would be an attempt to end the program.

I believe this move is wrong for the following reasons:

    • The amount paid for annual excess net-metering is relatively modest at $0.099 / kWh. This is less than it would cost for many other forms of new generation (maybe even less than site C).

If BC Hydro resells this to the net-metering customer’s neighbours at the second tier residential rate they have a profit margin of 40%.  They would also make a profit selling this power to SGS Commercial customers.

    • Rather than reducing the amount of green energy on the grid BCHydro should be encouraging more. Excess storage capacity behind the dams means we could be exporting more to Alberta and the US (once we remove transmission constraints) and helping shut down dirty power plants.

    • Researchers with the Pacific Institute for Climate Solutions 2060 Energy Future Pathways team found that a photovoltaic (PV) penetration of 8.5% in BC would provide a good balance on the grid and not interfere with BC Hydro's minimum generation requirements.  Currently penetration is less than 1% so there is plenty of room to grow without causing any technical problems for BC's grid.

    • As we electrify transportation and building heating to meet climate targets there will be need for new generation and solar PV is one of the cleanest sources.

    • Although BC's grid is relatively clean, data from NRCan shows that for every kWh of PV added it would reduced GHG emissions by 16 kg.

    • With more PV on the grid BC Hydro would also be able to sell more power to California as part of its renewable portfolio standard.  Some of BC's hydro power does not qualify under this program.

    • In Zone 2 net-metering helps reduce the cost of the power that is subsidized by BC Hydro rate payers and significantly reduces GHG emissions from fossil fuel generators.  Restricting or ending the program would remove this benefit for rate payers and prevent further reductions in GHG emissions.

    • Many of the net-metering systems currently being installed are on new construction.  The proposal by BC Hydro offers no way to calculate the maximum size under this new restriction.  It seems the proposal was not well thought out.

    • Ending the net-metering program would devastate the solar industry in BC.  There would still be some off-grid work but the vast majority of the work currently being done is grid-tie.

This would mean the loss of good-paying jobs that keep workers in local communities.

    • If the net-metering program is ended BC would become the only jurisdiction in Canada to not allow grid-connected solar power.