The Nova Scotia government has scuttled a bid by the province’s private electric utility to charge fees to customers who sell renewable power back to the electricity grid.
Premier Tim Houston issued a statement early Wednesday saying his government’s move is aimed at protecting the province’s solar industry and the small businesses and homeowners who use solar energy or plan to invest in it.
Later in the day, Houston told reporters, “There was part of the (utility’s) application that discouraged investment in solar and that was inappropriate in our view.”
The premier also said it was time to examine the relationship between Nova Scotians and the private utility.
Asked whether that included the utility’s guaranteed nine per cent rate of return on equity, which ensures the company makes a profit, he said, “We are going to take a hard serious look at every aspect.”
Nova Scotia Power’s “net-metering” proposal, first floated last week, would have charged customers using solar power a monthly fee of about $8 per kilowatt of electricity, adding about $960 a year for a typical 10-kilowatt photovoltaic solar installation, which can generate about $1,800 in annual revenue.
Homeowners, small businesses and the solar power industry loudly condemned the charge, arguing the proposed fee could wipe out the province’s emerging solar industry by creating a disincentive for potential buyers, whose investment in solar energy would take twice as long to pay off.
Houston said Wednesday the province will introduce regulations to block the proposal included in Nova Scotia Power’s most recent rate application. But hours later, it seemed as though the government wouldn’t have to.
The CEO of the privately owned company, Peter Gregg, issued a statement Wednesday afternoon stating the utility would withdraw its application for the solar charge “and we will immediately take the necessary steps to do so.”
Responding to a wave of criticism, Nova Scotia Power announced Tuesday a one-year delay for the proposal. Gregg said the utility regretted there wasn’t more public consultation.
Gregg has said the utility’s proposed charge, filed last Thursday with the Nova Scotia Utility and Review Board, would have taken effect Feb. 1, 2023, instead of this year, if approved. But that plan died on Wednesday with Houston’s decree.
On Sunday, Gregg defended the proposal by saying homeowners who generate their own electricity using solar panels are currently being subsidized by other customers. He said the monthly fee for people who sell excess power to the utility would ensure fairness for all customers.
Nova Scotia Power is a subsidiary of Halifax-based Emera Inc. The utility was privatized about 30 years ago.
The government said Wednesday the proposed charge would have created a “direct and immediate negative impact” across the province.
“As soon as the announcement hit the media, we were hearing from the sector, we were hearing from concerned residents who had made the investment,” Natural Resources Minister Tory Rushton told a virtual news conference.
“We want to make sure the solar sector and the users are going to have that rate of return for that investment, for themselves and for the environment. We wanted to ensure (the solar industry) was secure.”
The Canadian Renewable Energy Association praised Nova Scotia for protecting the province’s solar industry.
“The government of Nova Scotia has shown real leadership in standing up for the rights of solar net-metering customers, recognizing the important contribution of solar to achieving the province’s climate change goals,” spokesman Nicholas Gall said in a statement.
The association said the proposed fee would have doubled the payback period for rooftop solar panels, from its current 10-to-12 years to more than 20 years.
The province’s solar industry supports hundreds of jobs throughout Nova Scotia and contributed about $30 million in private sector investment to the economy while helping to reduce greenhouse gas emissions by nearly 250,000 tonnes, the association added.
Meanwhile, the Sierra Club Canada issued a statement saying the controversy underscores the need for changes that will prevent Nova Scotia Power from making a similar “cash grab” in the future.
There are now more than 4,000 solar-powered homes across Nova Scotia. The province has committed to ensure that 80 per cent of its electricity will come from renewable energy by 2030.
This report by The Canadian Press was first published Feb. 2, 2022.