Users, industry condemn Nova Scotia Power’s proposed fee on solar installations

Reaction to Nova Scotia Power’s request for a 10% rate hike over the next three years continues to gain steam. 

Some of the most vocal opposition is coming from people who have installed home solar systems to generate some of their own electricity or who are considering doing so. In addition to the proposed general rate increase, people who purchase a home with a solar array or who install solar panels after February 1, 2022 will be charged a new “system access charge” of $8 a month on every kilowatt of installed capacity. 

“We’re urging the Utilities and Review Board to deny Nova Scotia Power’s request,” said Gurprasad Gurumurthy, energy coordinator for renewables and electricity with the Ecology Action Centre. “We’re in a climate emergency and this fee will dis-incentivize residents who want to set up solar energy at a time when we need to be transitioning to renewables as fast as we can.”

Gurumurthy says the new system access fee works out to $960 a year for homeowners with the maximum allowable 10kw system. 

The proposal comes just a few weeks after the rebate under Efficiency One’s Solar Homes program was cut from $6,000 to $3,000. The treasurer of Solar Nova Scotia, a group that represents up to 80 solar installation and consulting companies, told the Chronicle Herald the proposed system access charge would “destroy” the solar industry.

Nova Scotia Power president Peter Gregg says the fee is being proposed to correct “unfairness” that allows solar homeowners to benefit at the expense of other consumers who don’t generate their own electricity. 

“There is still a cost to serve those (net-metered) customers because they continue to be connected to the grid”, Gregg told the Examiner last Thursday. “Their costs have gone down and we still have cost in the system to provide reliable power and so as they are paying less, it just naturally happens that the rest of the customers’ costs go up.”

On Friday, Nova Scotia Power vice-president David Landrigan estimated non-solar ratepayers would be disadvantaged to the tune of $55 million by 2030. (It’s not clear at the time of this writing if that $55 million may also represent projected lost sales to NS Power).

On Saturday, the Examiner received a copy of a letter written to the Consumer Advocate to protest the proposed “system access charge.” Peter Ritchie, the letter-writer, was an early adopter of solar at his home in Antigonish County and so he, like others, will be grandfathered and exempt from the fee for the next 25 years. Ritchie isn’t appeased by that; here’s some of his letter:

Apparently, NSPI is making the claim that “ordinary” rate payers are subsidizing the costs associated with allowing net-metering customers to feed excess solar energy, should they produce any, back onto the existing grid infrastructure.  I’ve even seen a comment from NSPI President, Peter Gregg, in which he suggests that this burden is particularly punitive to ‘…low income customers.’  While this sort of rhetoric may seem heartwarming on its face, it should be seen for the shameless pandering that it is.

To be absolutely clear, the infrastructure required to accommodate any net-metered flow of electricity on NSPI’s grid is pre-existing, already in place. Part of a grid-tied installation includes replacement of a standard utility meter with a bi-directional meter, at the customer’s expense. In the run of a year, any excess production from a grid-tied installation gets credited to the customer’s account and “rolls forward,” should successive credits accrue.  By no means is this account-crediting process the same thing as “selling” energy back to NSPI; there is, in fact, no such provision in the net-metering contract.

For the lion’s share of net-metering customers, any credits produced in the run of a year are more than offset by the energy they consume from the utility, during the times when their solar installation cannot satisfy their on-site demand.  In fact, the sizing of a customer’s grid-tied solar installation is strictly controlled by the utility, such that a customer, under normal circumstances, cannot produce more electricity than they normally would consume from the utility in the run of a year.

So, how is it that “ordinary” rate-payers are subsidizing net-metering customers?  Exactly how are ordinary net-metering customers, like myself and about 4000 others in this province, unfairly benefitting from having made the substantial investment to reduce our carbon footprint? On the subject of carbon footprints, I notice that NSPI makes no mention of the fact that it is the utility, not the net-metering customers, which gets to claim the carbon credits produced by the energy that our systems offset.

In my personal case, over the last ten years, my solar array has offset over 65 tonnes of carbon emissions. These emissions have a current value of $50/tonne such that, in effect, I’ve already ‘contributed’ $3255 worth of carbon credits to NSPI. Yet, I’m considered to be freeloading off the utility and the “ordinary ratepayers”.  

I became an early adopter of solar technology for the very reason that my only utility option was (is) such an egregious source of energy-driven carbon emissions. While NSPI has made modest improvements in this regard, over the last decade, it still lags behind many other jurisdictions and is now showing renewed resistance to retiring its coal-fired infrastructure.

You know, the more I think about it, the more ill I feel.  In one fell swoop, by making this application to the UARB, NSPI has already struck a crippling blow to what was a burgeoning green industry. Since the announcement of this matter two days ago, solar installation businesses around the province have had jobs canceled outright, both prospective and in-progress projects, some of them of substantial size.

As I’m sure you are aware, Mr. Mahody, the damage has largely been done but could be somewhat reversed with swift action.  Unless this application is immediately withdrawn or rejected, it could be up to 18 months before this matter is decided. The solar industry of this province cannot ‘ride it out’ that long; the industry will be decimated, just in time for NSPI to finally start investing in its own solar infrastructure.

A copy of Ritchie’s letter arrived at almost the same moment as a news release from Nova Power. During the midst of a wild winter storm, Nova Scotia Power issued a statement Saturday afternoon attributed to company president Peter Gregg. It reads, in part:

We see a strong and fair Net Metering program as a critical part of reaching our shared goal to get Nova Scotia off coal by 2030. Today, the energy and service provided by NSP to solar customers is being subsidized by all of NSP’s other customers. Our intent in the General Rate Application is to address this fact and find a solution with the regulator that is fair for all customers.

We understand the proposed System Access Charge raises concerns for the solar industry and with some of our customers. We are listening to your concerns and plan to reach out to meet with industry leadership early next week. We will continue to support the development of more renewables in Nova Scotia while maintaining our commitment to ensuring fairness for all customers.

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