Government says previous program was financially unsustainable, but an industry player says the new plan won’t work
Saskatchewan’s new net metering program for solar energy is designed to fail and will squeeze out opportunities for residential and farming customers, says Bradyn Parisian, Owner of Mo Solar Company.
SaskPower plans to launch a revamped version of the net-metering program on Nov. 1 after being criticized for cancelling the previous program, which was popular in the province.
Kenneth Cotterill, assistant to Dustin Duncan, minister responsible for SaskPower, said the previous net-metering program wasn’t financially sustainable.
“We reached our 16-megawatt cap a lot earlier than anticipated. That’s why when we hit that cap we stopped taking new applications,” Cotterill said.
“After we went through the previous program, we were able to put a new one in place that would be financially sustainable moving forward.”
Parisian is also a member of the Distributed Energy Association of Saskatchewan, which represents the major solar businesses in Saskatchewan, and he said the previous net metering program helped farms with higher electricity bills become more competitive.
“This is even more grievous for folks who live in the southeastern part of the province where there isn’t natural gas distribution facilities. So they rely on electric heat,” Parisian said.
“This was an equalizer for them that unfortunately has been made less economical and less practical for them to implement.”
Cotterill said that if the previous net-metering program continued, SaskPower forecasted a loss of $54 million by 2025-26 because the utility had to cover the cost to maintain the power grid.
However, Parisian said he worked at SaskPower for five years, including as an account manager for key industrial accounts, and net-metering customers under contract still pay the basic monthly charge, which is enough to maintain the grid.
“I don’t buy that argument one bit. When you consider the way that the rate model is built, they recover fuel and operation cost through the charge for electricity consumption,” Parisian said.
“Even as an employee at a senior level at SaskPower, I was told time and time again that the basic monthly charge covers basic grid maintenance and taking care of future capital investments.”
With the previous net-metering program customers could lock in their rates for 10 years, and then when that period expired they had the option to lock in their rates for another 10 years.
With the new net-metering program customers are no longer able to lock in rates.
“The main reason for it is we wanted the updated program to provide a lot more certainty and clarity for the customers who want to net-meter, while also reduce the financial impacts on customers for it,” Cotterill said.
Parisian said the fixed program length in the previous program provided certainty to users because they knew exactly how long the payback period for their system would be.
He said it will likely be harder to get financing for solar systems because the new net-metering program is much less predictable.
“I actually think that presents some scenarios where you could have farmers get into some pretty serious trouble with their lenders when rates go up,” Parisian said.
“SaskPower has carved out this clause where they can just change it as they see fit, and it’s worded exactly that way in the contract.”
The program allows customers to generate up to 100 kilowatts of power to decrease their monthly power bills and get credit for the excess power they generate.
Excess energy sent to the grid will be credited at 7.5 cents kWh toward a customer’s energy bill, which is about half of what the previous program paid.
Parisian said SaskPower’s new model provided significant advantages to large privately owned power generators.
“They (SaskPower) are willing to pay a private sector entity 10.5 cents but they are only willing to give a residential customer 7.5 cents credit for power that’s pushed back into the grid, which they will then sell at 14.5 cents,” Parisian said.
Cotterill said the net-metering program is only one of the methods the government is using to reduce greenhouse gas emissions in the province 40 percent below 2005 levels by 2030.
“We do have some larger projects. We are installing a 325 megawatt utility scale wind under our plan,” Cotterill said
“We have investment in wind, solar hydro, etc., across many different generation options.”
He said no further investments in carbon capture are planned at this time.
Parisian said the carbon capture projects cost $2 billion, and it didn’t net new power generation because it just refurbished and retrofitted an existing coal plant.
“If they had taken that money and invested it in solar, the build-out would have been absolutely insane,” Parisian said.
“A megawatt of solar is roughly two million bucks. So divide two billion by two million. We’d have 1,000 megs of solar capacity in the province providing free energy.”