Connecting Generation to Horizon's Distribution System

Selling Electricity to the Grid

Customers have a number of options to choose from for selling electricity to the grid depending on the size of their facility.

Feed-in Tariff Program (FIT and microFIT Program)

The Feed-in Tariff (FIT) program is a generation procurement program run by the Ontario Power Authority (OPA). The program pays electricity generators, using renewable energy sources, attractive prices that help recover investment costs and provide a reasonable rate of return. The main feature of the FIT program is the FIT contract - a 20-year contract between the OPA and the generator that stipulates a set price for the electricity supplied by the generator. The objective of the program is "to facilitate the increased development of Renewable Generating Facilities of varying sizes, technologies and configurations via a standardized, open and fair process."

The microFIT program applies to renewable generation facilities that are up to 10 kW in size. The most common example of a microFIT project is the installation of solar photovoltaic panels on the roof of a home or small business. Small projects that use wind, water or biomass would also apply.

The FIT program is designed for renewable generation facilities that are greater than 10 kW in size. Solar photovoltaic projects must not be greater than 10 MW per project. Waterpower projects must not be greater than 50 MW per project.

For information on the FIT and microFIT programs, please visit the Ontario Power Authority's Feed-in Tariff website.

Net Metering

Net metering is a simplified financial settlement process for those who are interested in generating a portion of their own energy needs with renewable electricity generation. Net metering is convenient for those who are looking to avoid the need for expensive batteries or backup generators often necessary for off-grid renewable electricity systems. Net metering is only available to those who are installing renewable generation systems of up to 500 kW nameplate capacity.

A net metered generation facility will be billed for the difference between the amount of electricity exported to the distribution system and the amount of electricity taken from the distribution system each month. Regulated electricity charges will only apply to the net consumption of electricity. If the difference reflects zero energy consumption or a net export of electricity by the customer, only the fixed monthly customer charge will apply and a credit for the value of the energy exported will appear on the net metered customer's bill. Energy credits can be carried forward for one year and will be applied to future bills.

Since credits can only be carried forward for one year, there is no incentive for installing generation facilities that consistently export more power to the grid than is consumed by the net metered customer. Net metering customers cannot participate in other forms of financial settlement, although a net metering customer can cancel a net metering agreement with 90 days notice if they wish to expand their systems and/or participate in other programs.

For those electricity customers who have electricity supply contracts with licensed retailers other than Horizon Utilities, consultation with the retailer will be required before any net metering arrangement can be made.

Hourly Ontario Energy Price

Ontario's wholesale market for electricity is an open market administered by the Independent Electricity System Operator (IESO). Throughout the day and night, Ontario electricity suppliers submit offers to sell electricity. The IESO then uses these offers and bids to match electricity supply with demand, establishing the Hourly Ontario Energy Price (HOEP) paid by wholesale customers. This Hourly Ontario Energy Price, also called the spot market energy price, changes from hour to hour, day to night, from season to season, and for short periods in response to high levels of demand or sudden changes on the IESO-controlled grid. Every five minutes the IESO balances the supply of electricity with demand. As demand increases, more expensive offers from generators are accepted, which raises the price of electricity. As demand drops, only the less expensive offers are accepted, which reduces the price.

A generation facility that is not eligible for other financial settlement options could, perhaps, because of its size or fuel or operating characteristics, offer its energy for sale in the wholesale market in a number of different ways. The wholesale market requires a relatively advanced understanding of Ontario's energy market and the acceptance of increased levels of both risk and reward that correspond with no guarantee of a long-term contract for energy supply and no fixed pricing.

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