A Microgeneration Strategy for Canada - Part 2

Published November 29, 2006

Detailed Background Case Description

Capturing the public imagination: microgeneration in the UK

The Leader of the Opposition wants to install a wind turbine on his roof (Clover, 2006). The Mayor of London believes that his measures to foster distributed generation in London will be one of the most important parts of his legacy (Livingstone, 2006). Major privatized utilities are buying significant stakes in emerging microgeneration companies (Scottish & Southern Energy, 2006). Over the last few years, small energy has become a big deal in Britain.

The explosion of interest in microgeneration has come about as a result of sustained concern about climate change in energy policy circles, together with concerns about rising energy costs and about the need to make a transition to a sustainable, low carbon energy system. The context in the UK is of course very different from that in Canada, with liberalized electricity markets for over 15 years, rather than the near monopoly situations that exist in many Canadian provinces, and substantially lower electricity prices. Many of the issues, however, are the same – interconnection, codes and standards, rewards for generation, local planning issues, and high upfront costs faced by consumers. The UK experience illustrates how microgeneration can become an empowering and positive way to engage the public in energy and climate change issues.

Microgeneration on the policy agenda

Several stages have enabled the UK to move towards a mainstreaming of microgeneration. Interest in microgeneration arose from an awareness that distributed power could reduce the stress on overloaded transmission lines, reduce dependence on imported energy supplies, reduce greenhouse gas emissions, and bring down energy bills for homeowners. In 2000, the government established a working group to address the barriers to increased distributed generation. As a result, in 2003, a uniform set of codes and standards for microgeneration installation and interconnection was established, providing installers with a single set of rules. This enabled a change in regulations to allow customers to install microgeneration equipment and connect to the grid without having to obtain permission from the local distribution network operator, greatly easing the administrative and regulatory burden on customers and installers. This was a key step in enabling microgeneration to establish a respectable niche in energy markets. Also in 2003, the government introduced incentive programs providing up-front grants to homeowners and communities buying and installing accredited microgeneration systems, often up to 50% of installed system costs.

Responding to increasing enthusiasm for microgeneration among lobbyists and policy analysis, the UK government committed to developing a ‘Microgeneration Strategy’ by the end of 2005, in its Energy Act of 2004. As the government was developing the strategy, others joined together to support the emerging microgeneration agenda. Green groups and thinktanks advocated in favour of small-scale renewables, with Green Alliance publishing a ‘Microgeneration Manifesto’ in 2004 (Collins, 2004). This laid out the potential benefits of microgeneration for the UK, and suggested elements for the government’s Microgeneration Strategy.

Industry stakeholders with an interest in microgeneration also grouped together, forming the Micropower Council, in 2004. The Micropower Council includes renewable energy companies and industry associations, and five of the UK’s six biggest utilities. Since then, the Micropower Council, along with the Renewable Power Association, has played an important role in providing a link between policy-makers and the industry.

The Microgeneration Strategy, published in 2006, included £30m in deployment funding through a Low Carbon Buildings Program. This program also provides lists of accredited installers and retailers of microgeneration equipment, and information on available grants and incentives for communities and homeowners interested in installing microgeneration technologies. Later in 2006, HM Treasury announced a further £50m of support for microgeneration, and Parliament passed the Climate Change and Sustainable Energy Act, which included additional measures for supporting microgeneration. The measures included a requirement for utilities to provide customer-generators with compensation for power exported to the grid, and requires the government to explore exempting microgeneration technologies from planning permission requirements.

Local governments lead the way

Perhaps just as important as the development of the national strategy has been the quiet microgeneration revolution sweeping through town halls around Britain. In 2003, The London Borough of Merton announced a new planning policy, which required all new development above 1000m2 to provide 10% of its anticipated energy needs from on-site renewable energy equipment. Part of the rationale for the policy was based on greenhouse gas reductions, but it was also intended to reduce energy bills in new homes and businesses in the borough, providing a long-term competitive advantage (London Borough of Merton, 2006).

“Home energy generation rarely leaves families unchanged in their outlook and behaviour...It seems that microgeneration provides a tangible hook to engage householders emotionally with the issue of energy use…householders describe the sheer pleasure of creation and self-sufficiency.” (Dobbyn and Thomas, 2005).

The government's planning office, at first sceptical of the policy, eventually allowed it and, in 2004, issued policy guidance on renewables that explicitly supported such measures (“Planning Policy Statement 22”). By this time, several other councils had adopted the policy, and by 2006, more than 100 councils were actively developing policies that have come to be called “the Merton Rule”. In June 2006, the Minister for Housing and Planning made clear the extent to which the government now supported the Merton Rule, by saying that:

“In particular, the government expects all planning authorities to include policies in their development plans that require a percentage of the energy in new developments to come from on-site renewables, where it is viable.” (UK Minister for Housing and Planning, 2006).

When the policy was announced, there was a general expectation that the development industry would be vigorously opposed, but this has turned out not to be the case. Planning officers from boroughs that have introduced the policy describe how developers have generally been co-operative.1

Microgeneration captures the public imagination

When Microgeneration Strategy was launched, there was real enthusiasm and support from the public, politicians, and the media. The diagram below indicates the way in which the British press responded to the public interest in microgeneration around the time of the publication of the strategy. The support shown for the strategy has been argued to be a result of the way in which microgeneration is a positive way of engaging citizens with climate change, rather than a negative ‘nagging’ approach.

Moving towards mass markets?

Many of the important barriers for UK microgeneration have been overcome, but many still remain. The industry is united, however, and has momentum, and there is a strong vision of what can be achieved driving developments.

The spread of municipal initiatives to promote microgeneration through the planning system is generating much of the current market, but this is restricted to new buildings. In 2006, Britain’s biggest home and garden retailer started selling domestic roof-mounted wind turbines. With a rated power of 1kW, the turbines are being sold at $3000 CAD, including sales taxes and installation, putting microgeneration technologies within the reach of ordinary homeowners.  Curry’s, one of Britain’s biggest electronic goods retailers, has also started selling solar PV equipment, at an installed cost of $14,000 for a 1kW system.

Urban turbines

Building-mounted wind turbines are relatively new – and controversial in the wind industry. Technical problems with vibration, turbulent air flow and noise have caused some wind experts to reject urban wind turbines as a fundamentally bad idea. A technical appraisal of building-mounted wind turbines suggested, however, that their deployment could be substantial, and that most of the technical barriers can be overcome (Dutton et al, 2005). There is little experience, however, with urban wind systems in practice, and it is difficult to get independent estimates of cost and performance.

Regulatory barriers and market structure

The barriers to microgeneration are systemic, and efforts to support microgeneration must similarly involve federal, provincial and municipal governments in partnership with utilities, developers and the microgeneration industry.

Energy systems and markets are structured and regulated in such a way as to unfairly exclude small producers by barring entry into energy markets, failing to compensate small producers for their generated energy, and a host of issues associated with codes and standards, building regulations, and permits.

“The structure of most electricity markets in Canada is not conducive to distributed generation... The deployment of low-impact renewable electricity applications is still largely up to the discretion of regulated monopolies, which have little incentive to do so”. (The Renewable Energy and Energy Efficiency Partnership (REEEP), 2003).

Canadian energy markets developed around large, centralised generating plants, such as large hydro installations and coal-fired power stations. The institutions, regulatory frameworks, and habits that govern the market have considerable inertia, and help to ‘lock-in’ often inefficient systems. This is increasingly known as ‘carbon lock-in’ by scholars of technological change, and implies that economic instruments and public persuasion campaigns alone are unlikely to change consumption behaviour and purchase decisions. Institutional and regulatory barriers also need to be tackled (Unruh, 2000).

Access to the grid and compensation for electricity generators

Some renewable energy technologies are unpredictable in output because of the intermittency in sunshine and wind, and output does not always match domestic demand. When a microgeneration system produces more electricity than the homeowner is using, the excess power ‘spills’ into the local distribution grid, and is used by neighbours. These neighbours are billed by the utility for this power exactly as if it had been produced centrally, but unless systems have been put in place, the producer receives no compensation. ‘Net metering’ arrangements, in which customer-generators are compensated for their exported power at the retail electricity rate, are one way of restructuring the market so that the customer-generator receives a fair price.

Net metering is an important step in enabling microgeneration. As the experience of Manitoba demonstrates, however, a broad range of additional barriers can act to prevent widespread take-up of microgeneration even when net metering is in place. Manitoba Hydro operated a net metering scheme for more than 10 years, but the number of customers signing up was disappointing (The New Energy Resources Alliance (NewERA), 2006). Net metering does not automatically mean that it is straightforward for customers to install and connect microgeneration technologies, and straightforward interconnection may be more important in enabling microgeneration than rewards for energy exports. While several Canadian utilities have introduced net metering policies, it is frequently a time consuming and difficult process to get connected, not least because the utility has little incentive to do so. Getting connected was cited as a major factor by owners of grid-connected renewable energy systems in a recent survey, even where net metering systems exist (Henderson and Bell, 2003).

The process of getting connected to the grid needs to be carefully regulated to ensure safety and reliability, but the process of interconnection is often overly complex, and some observers have suggested that the lack of uniform interconnection standards across the country has been ‘the number one interconnection barrier for small renewable systems’. Furthermore, it is a problem that many utilities do not have any standards at all for small grid-tied systems. (Micropower Connect, 2006). Consequentially, many customers wishing to connect microgeneration technologies to the grid go through a complex, time consuming and expensive case-by-case inspection and approval process, or through a standard process designed for much larger generators. Standards are essential to provide safety, and maintain system and power quality, but they are also essential in facilitating straightforward grid connection.

Codes & standards

As well as the interconnection standards mentioned above, product safety and performance standards, and building, electrical, and plumbing codes form an important part of the regulatory environment for microgeneration technologies. The processes of testing and certifying products and adapting codes can be costly, time-consuming, and present a significant barrier to the diffusion of new technologies.

Codes are vital for ensuring that products and buildings are safe and reliable, and they need to be updated as new technologies emerge. This has not always happened, as the example of the solar hot water industry demonstrates. The National Plumbing Code calls for solar hot water systems to conform to a (now outdated) standard that was only ever intended to apply to a particular type of solar hot water system. No laboratory in Canada was certified to test systems to determine if they met the standard, so it was impossible to obtain certification to the CSA standard. As a result, in many areas it became difficult to get planning and plumbing permits, or insurance. This has had a negative impact on the Canadian solar thermal industry, and is only now being addressed, with Natural Resources Canada and the Canadian Solar Industries Association working with the Canadian Standards Association to develop appropriate standards and testing facilities (McGonagle, 2006b).

Consumers are rightly cautious about trusting uncertified products, but even where appropriate standards do exist, such as in the PV market, smaller manufacturers and importers cannot always afford the cost of CSA testing (Canadian Mortgage and Housing Corporation, 2006). Without support, product certification can be a further barrier for many small-scale emerging microgeneration technologies.

Skills & accreditation

Many microgeneration renewables take energy from the local environment: local solar, wind, earth energy and water flows are harnessed to provide for local needs. The result is that many systems are not simply ‘plug-and-play’, but need careful installation to perform properly.

Canada currently lacks training and certification systems for installers of many microgeneration technologies. This leaves potential consumers confused, cautious, and even vulnerable to poorly installed systems. As with product standards, certification is essential for consumer confidence in the industry.

The problem is particularly acute for the solar thermal and ground source heating markets. Both the Canadian Solar Industries Association and Canadian Geo-exchange Coalition have identified a pressing need to develop training programs and certification schemes. The Geo-exchange Coalition notes that “[w]e receive phone calls everyday from desperate customers trying to decipher who does what and who is accredited by whom, under which authority, and so on. In many cases those customers finally decide not to proceed with an installation because of the lack of market cohesion. They are afraid and confused.” (Tanguay, 2006).

Zoning and planning restrictions

Local by-laws and planning rules are usually designed without consideration of micro-renewable technologies. As a result, permitting and planning processes can be expensive and time consuming, as no set procedures are in place. For example, zoning policies such as height restrictions frequently do not include small wind turbine towers in lists of exempt structures (such as silos, water towers, and church spires). A recent review suggested that:

"Few if any municipalities, regions, provinces or other government structures possess an ideal package of policies governing small wind turbines." (Rhoads-Weaver et al, 2006).

In Ontario, other zoning problems have occurred when municipalities question the use of renewables in residential areas. Since the introduction of the Standard Offer Program, there has been at least one case where a resident in an areas zoned as ‘residential’ has been instructed not to install microgeneration equipment, as this has been seen as ‘commercial activity’ by the municipal authority (Ontario Power Authority, 2006).

Many municipalities do not have the capacity to develop renewable-friendly zoning and permitting policies, and are often unfamiliar with the technologies. Without support and direction from provincial governments and organizations such as the Federation of Canadian Municipalities, these local-level barriers will remain.

Awareness and mindsets

In an energy system dominated historically by large, centralized power generators and heating fuel providers, many homeowners, developers, and policy-makers simply do not know about, or understand, alternatives.

The microgeneration industry consistently cites lack of awareness as a major barrier across a range of technologies, including small wind (Marbek and GPco, 2005), solar thermal (Ipsos-Reid, 2002; SAIC, 2005; where it was the single most frequently cited barrier), solar PV (Industry Canada, 2003) and bioenergy (Canadian Bioenergy  Association (CanBIO) 2004).  Customers and developers are ignorant as to the costs, benefits, performance, and often even the existence of many microgeneration technologies. While industry associations and the federal government’s CanREN website provide useful information to potential consumers, there is no single source of information for residential scale renewables, for homeowners to find out what would, or not, work for them. 

Another problem are the misconceptions about microgeneration technologies. For example, many environmental NGOs have not been supportive of biomass combustion technologies, believing them to be a serious air pollution hazard. The Greater Vancouver Regional District prohibits biomass combustion unless emissions are less than natural gas combustion (Bradley, 2005), even though certified clean burning stoves and fireplaces can reduce smoke emissions by 90% compared with conventional wood systems. (Government of New Brunswick, 2001).

It is not just consumers' and developers' lack of  knowledge and absence of information, which act as barriers to the diffusion of microgeneration technologies. It is also the mindsets of policy-makers and utilities, accustomed to a model of centralized generation and control. Challenging and broadening this mindset is one of the challenges for microgeneration policy.

Progress in Canada: removing barriers to microgeneration

Canadian governments have recognized many of the benefits of microgeneration technologies, and both federal government and provincial governments have taken important steps to remove barriers and enable growth in microgeneration markets. Canada does not, however, have an integrated strategy for moving the implementation of microgeneration renewables forward. Indeed, existing mechanisms, which support microgeneration renewables are fragmented, and Canada’s flagship renewable energy support structures specifically exclude the microgeneration sector. While these policy measures have been carefully designed to foster renewable energy technologies at least cost, they miss opportunities to promote microgeneration.

Canada’s principal federal mechanism for supporting wind power, the Wind Power Production Incentive (WPPI), provides a guaranteed price, or feed-in tariff for electricity produced from wind. The WPPI excludes wind installations of less than 500kW, although it does have a lower cut-off of 20kW for remote and northern communities. Similarly, while the current status of the Renewable Power Production Incentive (RPPI), announced in the 2005 budget, is unclear, Natural Resources Canada’s September 2005 Discussion Paper on the RPPI suggested that it would only include technologies with a capacity of greater than 100kW (Natural Resources Canada, 2005).

The Renewable Energy Deployment Initiative (REDI) was established in 1998 to provide $51m over 9 years to solar air and water heating and biomass heating in commercial buildings. It provides up to 25% of the cost of these systems, and in 2002 support from REDI was extended to ground source heat. While it has provided much needed support for the development of the renewable heat industries in the commercial sector, and is considered to have been a successful program, it has not engaged with homeowners to bring renewable energies to a wider market.

Similarly, the Class 43.1 Capital Cost Allowance tax incentive for the purchase of renewable energy equipment has been valuable for supporting the small wind market (Marbek and GPco), but it excludes most applications of renewable heat technologies, and there is a cut-off limit under 3kW for solar PV. This is above what most homes would choose to install. Canadian Tire, which started selling small wind and solar PV technologies, advertises an on-grid solar system with a rated capacity of 2.8kW, just under a cut off of 98% of solar PV installed in Canada is below 3kW (Canadian Solar Industries Association (CanSIA), 2004).

In general, provincial governments have been better at targeting support to micro-renewables, with PST exemptions or rebates on renewable energy purchases such as offered in PEI, BC, and Ontario. Several provinces have also developed grants for renewable equipment purchases: Nova Scotia provides a 10% rebate for solar water heating, and $200 for certified clean-burning woodstoves, while the Quebec Energy Efficiency Fund provides $400 towards solar wall installations, a form of active solar air heating. In BC, a project of the BC Sustainable Energy Association, partnered with provincial and federal governments, Vancity Credit Union, and BC Hydro, is providing support for homeowners and communities to access rebates for solar hot water systems.

There are signs that the federal government is considering some form of incentive for supporting microgeneration. In September 2006, Environment Canada issued a request for proposals for work assessing different possible economic instruments to provide incentives for small renewables in the home and farm sectors.

Progress for microgeneration has been made

Despite the lack of a federal incentive program or integrated strategy, Natural Resources Canada2 and a range of industry associations and other stakeholders have, however, made progress over the last few years in tackling some of the more systemic barriers. This is vital – incentives and financial support will not be sustainable if the regulatory frameworks and supporting institutions are not in place to allow the market to become self-sufficient. Poorly targeted incentives can create industries with a culture of dependency, with no incentive to drive down costs and build more robust markets.

Grid access and interconnection standards

For electricity generating technologies, the potential problems of interconnection to the grid have been addressed, since 2001, by Micropower Connect, run by Electro-Federation Canada , and supported by Natural Resources Canada and Industry Canada. Micropower Connect has worked to develop guidelines for interconnection of distributed electrical resources, and published a set of guidelines in 2003. This was followed with a review of the status of interconnection guidelines, codes and standards in Canada in 2006, which made recommendations for uniform interconnection standards to be adopted across Canada. Power generation and infrastructure are provincial responsibilities, and the report argued that:

“It is important that provincial regulators understand the importance of adopting national or international standards, and enforcing consistency within their jurisdictions.” (Micropower Connect, 2006).

In 2006, a new National Standard of Canada was issued covering grid interconnection of microgeneration technologies, providing a basis for harmonized rules across Canada.

While many provinces still need to develop effective interconnection rules, the models and standards now exist, with Micropower Connect having done much of the initial work, and providing a forum for interconnection guidelines to move forward.

Restructuring markets: export price agreements for microgenerators

The way in which utilities manage energy resources, including microgeneration, is governed by provincial rules, resulting in a variety of different approaches across Canada. Around 8 major utilities now have net metering programs (Henderson and Bell, 2003), with the programs in BC and Ontario particularly well advanced (NewERA, 2006). Several others have other grid-connection and compensation programs that are less generous than net metering, but that provide some payment for electricity exported to the grid (Henderson and Bell, 2003).

Net metering schemes include all forms of micro and distributed generation, including those based on fossil fuels, such as natural gas combined heat and power. The only current example of a production incentive specifically aimed at renewable distributed generation in Canada is the Ontario Power Authority’s Standard Offer Program, which provides a guaranteed price for electricity generated from renewable resource installations under 10MW. This is a complementary program to Net Metering, which also operates in Ontario, and customer-generators can choose which program will suit them best. Ontario’s Standard Offer Program issues 20-year contracts, providing consumer-generators with a guaranteed income from their power system for 20 years. While it is too early to draw robust conclusions about the impacts of the program, the Canadian Solar Industries Association (CanSIA) estimates a 400% increase in sales of grid connected PV in the first half of 2006 (CanSIA, 2006). In total, 250 kW are reported to have been installed in Ontario as a result of the program, more than double the capacity of grid-connected solar PV in Canada as a whole in 2004.

Supporting the industry: product codes and standards, training and accreditation, and the support of industry associations

New industries take time to build the institutional strength that supports the development of markets, and the capacity to address regulatory and other issues. Industry associations are one way in which industries can act together to overcome common barriers. The federal government has provided support to a number of Canadian industry associations representing the microgeneration industry, either with core funding or for specific projects. This includes the Canadian Geo-exchange Coalition, the Canadian Bio-energy Association (CanBIO), the Canadian Wind Energy Association (CanWEA) and the CanSIA. 

Government support has been also been available for the development of product standards and training and certification programs. For example, NRCan has been working with CanSIA to provide 90% of the costs of certification for solar hot water systems.  The Canadian Geo-exchange Coalition is also working with NRCan to develop both product standards and a training and certification system for installers.

Other support has been targeted at raising awareness of small scale renewables. This has included, for example, funding for the Canadian Wind Energy Association to develop a ‘small wind’ website, to provide information to potential customers, policy-makers and investors on the options for small wind power in Canada. Natural Resources Canada's Canadian Renewable Energy Network (CanREN) website also provides information and case studies on microgeneration.

Clean power to northern communities

The Aboriginal and Northern Community Action Plan (ANCAP) was developed to help northern communities respond to the challenges of climate change, through adaptation and through greenhouse gas reductions. This includes supporting renewable energy projects, as well as resource estimation (through a Wind Assessment program), and community energy planning in remote communities across Canada.

Microgeneration in the planning system

This study is unaware of any clear examples of provinces or municipalities actively streamlining efforts to get micro-renewables through the planning system more quickly.  There are many Canadian municipalities, however, that have installed small-scale renewable systems in their communities, often as part of initiatives to reduce the carbon footprint of civic buildings. The federal ‘Green Municipal Funds’, administered by the Federation of Canadian Municipalities, has been an important source of support for many of these communities. One example is the Drake Landing subdivision in the City of Okotoks, Alberta. A solar seasonal storage system will provide 90% of the heating needs for the 74 homes involved.

Research Analysis

Microgeneration offers a real opportunity for Canada. It can reduce greenhouse gases, provide opportunities for Canadian businesses, and engage the public in the fight against climate change. At the moment, that opportunity is being overlooked.  Many of most important barriers have been overcome, however, and there is real potential for an integrated microgeneration strategy to bring clean and reliable microgeneration within reach of Canadian homeowners and businesses, allowing microgeneration to move from niches into mainstream markets.

A microgeneration strategy for Canada

A Microgeneration Strategy for Canada would consider including some of the following points:

Federal actions

  1. Set ambitious, but realistic, targets for the uptake of microgeneration in Canada. Targets would be based on analysis of the potential market for microgeneration in Canada (similar to work carried out in preparation for the UK’s Microgeneration Strategy – Energy Savings Trust et al, 2005). This would provide a clear signal of the federal government’s intention to remove barriers to microgeneration, stimulate private sector support, and raise awareness of microgeneration.
  2. Consult industry views on the establishment of a microgeneration industry association or forum, which would provide policy-makers, developers and customers with a single point of contact for the industry, and provide a space for discussing how best to move forward with support for microgeneration. Such a body should include utilities, as well as microgeneration technology companies.
  3. Develop a web-based information hub, possibly managed by an industry association, to enable customers and developers to access information on technologies, incentives, prices, and certified products and installers. This would build on the work of the existing CanREN website.
  4. Support for industry to develop appropriate codes and standards, and accreditation schemes.
  5. Support for training schemes for installers and technicians.
  6. Establish a process for the harmonisation of interconnection and metering codes and standards across Canada, leading to uniform codes and standards across all Provinces. This would build on the work of Micropower Connect.
  7. Lead by example, through a program of public procurement of microgeneration building on the Federal House in Order’s On-site Generation at Federal Facilities program.

Federal or provincial incentives

Measures to encourage consumer uptake could be funded through a ‘public benefit charge’ on energy bills, which is essentially a hypothecated tax earmarked for microgeneration support.

  1. Tax incentives: Sales tax rebates, expansion of the federal Capital Cost Allowance class 43.1 to all microgeneration technologies.
  2. Grant schemes or ‘buy downs’, to reduce the capital costs for microgeneration customers. Capital grant schemes must be carefully designed to ensure that incentives for cost reduction remain, and that a subsidy-dependent industry does not develop.
  3. Feed-in tariffs, providing a guaranteed price for electricity generated by microgeneration.
  4. Low interest loans, or ‘net financing’ schemes, where loan repayments equal energy bill savings from the microgeneration installation. A program for farmers, who often have high energy costs and abundant opportunities for microgeneration, would be particularly valuable.

Provincial actions

  1. Require utilities to provide fair export prices for customer-generators, such as net metering arrangements.
  2. Support microgeneration through building codes, for example, by introducing a requirement for buildings to be ‘solar retro-fit ready’.
  3. Enable and encourage municipalities to develop innovative policies to promote microgeneration through the planning system. ‘Merton Rule’ style policies, which make the incorporation of renewable energy a requirement of development, would currently not be legal in most Canadian municipalities. Provincial legislation covering the powers of local governments could change to promote such policies.
  4. Lead by example, through the public procurement of microgeneration technologies for public buildings.

Municipal actions

Municipalities can take three broad approaches to supporting microgeneration renewables within their communities.

  1. ‘In-house’ microgeneration. Most municipal efforts to promote small scale renewables to date have focused on the development of renewable energy in municipal buildings. This provides examples of leadership within local communities, but municipalities can do much more beyond their own operations.
  2. Enabling microgeneration. Removing barriers to the installation of microgeneration is essential in fostering microgeneration markets. Municipalities can adopt streamlined permitting rules for renewables, such as the model zoning guidelines for small wind developed by the Canadian Wind Energy Association (Rhoads-Weaver et al, 2006).
  3. Promoting microgeneration. Municipalities can go further than simply removing planning and zoning barriers by taking an active lead in promoting microgeneration through the planning system. Although ‘Merton Rule’ policies are not currently possible in most Canadian municipalities, other possibilities include reduced development permit fees, and making the inclusion of on-site renewables a consideration in re-zoning applications.

Strategic Questions

The potential for municipal action to enable and promote microgeneration through the planning system should not be underestimated. The National Round Table on the Environment and the Economy estimated that a third of the buildings that will be standing in Canada in 2050 have not yet been built (NRTEE, 2006). This is a massive opportunity to change the way in which energy is produced and consumed.


  1. It is not only in the UK that municipal planning policies have fostered microgeneration. In Spain, a policy pioneered by Barcelona required all new buildings to source a percentage of their hot water needs from solar water heating systems. This policy was taken up by dozens of other municipalities, and in 2006, entered the national building code.
  2. In particular, Natural Resources Canada's Integration of Decentralised Energy Resources program run by CETC-Varennes.

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I think it would take a lot more than just £30m to implement large scale microgeneration systems but looking at the bright part this is a great start, every time I read about these kind of project I get more hope for a good future. Looking in my neighborhood I see people begin to understand the importance of implementing these systems and I know for a fact that even more people would go for it if they chould afford it. That's why I think it's highly important to develop these systems on high scales so that everyone to have one, this would really make the difference.
Gerrard at Austin HVAC


Microgeneration works on scale of single dewellings or communities may ease the pressure of energy use at a community level, e.g., municipal interest in the UK in implementing microgeneration. Microgeneration is seen as empowering the public with regards to climate change, yet lack of awareness on how they can make changes in their own lives appears a major barrier in Canada to implementing more microgeneration.

What tools/techniques/incentives and sticks could be used to increase microgeneration in Canada at a household and municipal level?
Anne Landry


Each team member will post one question prior to the on-line discussion.

On March 2, 2007 the team will meet for 2 hours in one location to discuss the questions posted in regards to the case study both in person and on the Community Research Connections web page.


In a situation such as this where there are and will be early adopters, there is a challenge to keep momentum moving through communities and across Canada. Early adopters may feel isolated and without support (sharing stories, information) during the time lag between early adoption and microgeneration entering mainstream energy production. If early adopters feel isolated they may abandon their projects before a return is recognized. In which case a project with the goal of national-wide microgeneration adoption would be slowed or halted as early adopters drop out before a critical mass of support and use is generated.

How can early adopters from communities that are separated geographically, culturally, and politically connect with one another?


I was suprised that little of the case study dealt with environmental impacts.
While many of these micro generation systems are expected to be used in housholds, microgeneration also also includes microhydro systems of which BC has plenty on the books. Each system requires interconnection agreements to be set up. As you can imagine, interconnection from remote micro hydro system can result in huge environmental impacts. One such system in the southern interior proposes to interconnect over a mountain pass and construct 90km of new transmission corridor through fairly pristine habitat. The question I have is, what are the cummulative environmental impacts from numerous microgeneration facilties compared with larger facilities? Are remote micro generation facilities that need to inter connect truly green technology?

I agree - I think that micro generation facilities that interconnect need to have some sort of planning associated which examines cumulative impact. I agree that we need to kick-start the industry, but not at the expense of the environment. We need to look at the sustainability of the industry and establish it so that it is sustainable. I don't think the planning needs to be onerous. We have enough experience with resource planning across the country to know the minimum requirements needed to develop a plan that would maintain the sustainability of the industry. We also have the luxury that the microgeneration industry is not well developed yet. So why not develop the industry in a manner that is sustainable right from the outset.

Jennifer Vigano

I like your idea about social impact assessment Brad. I think if we are going to make these systems truly sustainable, then social, environmental and economic sustainability all need to be a part of the planning process. So often when we resource plan we don't consider the impacts over social, environment, and economic domains.

As we all discussed, socially as well we need to consider smaller remote communities and the sustainability impacts here (in the microgeneration sustainability plan). Perhaps we need to look at 'micro' not only at a household level but at a hamlet level. There are a lot of tiny northern communities of 50 households or so (less or more) that could pool their resources and develop their own micro electrical utility that could serve the community/hamlet. Could we then take this even futher and look at have a multi function utility that would take biosolids from wastewater treatment and garbage, feed it into an incinerator to create electricity which would then power drinking water treatment in addition to provide homes with energy. There are many social issues around human resouces - this could create new problems around education and competency, but this could also resolve some of the labour shortages that currently are experienced in remote areas.

Jennifer Vigano


In the UK it seemed that there were a couple of industry groups who worked closely with the UK government to advocate for microgeneration and advise on visioning and policy development.

In Canada, the federal government, some provincial governments and a whole host of industry groups have worked with microgeneration; however a vision for microgeneration, strong unified advocates, and a strategy seem vague. Canada is different than the UK obviously both in terms of geography, and governance (it has to consider intergovernmental relationships).

Who is best placed to provide the leadership needed to develop a vision, a strategy, and advocate for microgeneration in a way that meets the needs of municipal, provincial, and federal governments, and the sector?

Jennifer Vigano

In reply to by Jennifer Vigano


Just a quick comment:

One stop shops are a great idea, and I agree with your list above, as these are all things that need to happen.

On a side note - having lived in a building with a roof top wind turbine for 4 months - its a bad idea. It was a 400 Watt turbine (you can buy at Cdn tire) and the instructions specifically said not to mount to buildings, but they did it anyways....and it really does disrupt your sleep patterns.


As a consumer, I am interested in implementing alternative energy options for two reasons: security of energy supply during power interruptions caused by wind and severe storms (more frequent occurences lately) as well as GHG reductions. It wouldn't take a lot to provide incentive for me to implement microgeneration if I knew that conection was facilitated (easy) and efficient. The financial incentives most likely to attract me to this would be secondary to the ease of access, but undoubtedly a consideration. My sense is that direct rebates would be very effective.

Net metering arrangements would also provide an incentive.

I think that a variety of incentives can be appropriate. If it is a large capital purchase, e.g., an array of solar panels, then a zero interest or low interest loan may work best.

If it is a lower cost item, like a small wind turbine (that is now sold by Canadian Tire) a direct rebate may provide the necessary incentive.

I wonder what kind of incentives might be appropriate to encourage new builders to make use of microgeneration when starting a new project? It would seem that designing buildings, homes, with microgeneration built in would be more effecient than add-ons and retrofits so this should be encouraged, especially as the background information states that "...a third of the buildings that will be standing in Canada in 2050 have not yet been built."

I wonder why so many of the new technologies or smaller scale technologies are not better known? It seems as if the large hard technology projects get more attention and attract major funding. More particularly, the first step for greater energy efficiency is to implement demand management strategies?

One approach I think to encourage microgeneration is demonstration projects. Incentives for providing funding can be tiered at different levels, so that it does not all go to large projects. A progressive municipality could then apply for funding to use microgeneration in municipal buildings and communicate this widely to citizens. The municipality could then also provide financial incentives for individual projects and offer some technical expertise to assist with set up and getting through the paperwork.

Leading by example.

Do you think there is a possibility of micro generation creating a bunker type society where people will ultimately become self sufficient, intending to remove themselves from society, and ultimately removing the need to protect and sustain the collective. Could we then end up with the sense of urgency creating a sense of survival?

I think its largely a social issue. I wonder if society expects to be serviced by the big utilities so it has no incentive to look into smaller technologies. In urban societies we expect to be taken care of in this regard. So, if there is no incentive to explore these smaller/new technologies, no political demand is created (mandate) therefore political decisions for the allocation of infrastructure funding lean towards the larger infrastructure projects that serve the majority of the population.

What about price...Canadains have low low prices for electricity. Why look into alternatives when you pay so little for electicity. There is no incentive to create the demand.

Jennifer Vigano

I agree strong leadership is required, possibly from a team of stakeholders, but the driver I believe should come from a single body. If power companies are looking to avoid mega projects why are they not more interested in incorporating micro generations strategies into their planning? Based on the BC energy strategy it is not entirely clear how serious they are about developing this technology. Perhaps they have discounted it because it is not a large enough energy saving component compared to other options?

If that is the case it should be clearly addressed in their document or the barriers to implementation should be part of their discussion. As Canadians become more aware of the climate change issue they would appreciate opportunities to do their part. This argument should be used for implementing alternative options, regardless of whether the utility sees it as a significant way to reduce energy use. I sense a huge thirst for individuals to participate in energy reduction but they just don't see the options clearly.

I agree strong leadership is required, possibly from a team of stakeholders, but the driver I believe should come from a single body. If power companies are looking to avoid mega projects why are they not more interested in incorporating micro generations strategies into their planning? Based on the BC energy strategy it is not entirely clear how serious they are about developing this technology. Perhaps they have discounted it because it is not a large enough energy saving component compared to other options?

If that is the case it should be clearly addressed in their document or the barriers to implementation should be part of their discussion. As Canadians become more aware of the climate change issue they would appreciate opportunities to do their part. This argument should be used for implementing alternative options, regardless of whether the utility sees it as a significant way to reduce energy use. I sense a huge thirst for individuals to participate in energy reduction but they just don't see the options clearly.

While I agree with you Wanda, I think I am still of the mind that most of the succesfull intiatives out there have a champion who furthers the issue. I agree that an advocacy team needs to support the champion, a multi-stakeholder group as you've suggested...I think that's where I was sort of going with this, more of a champion for the issue.

Jennifer Vigano

Good comments,

I think you definitely need collaboration and cooperation between all levels of govt and the utility provider. Here’s some thoughts:

1. The Feds are in charge of Climate Change (to the best of my knowledge) and likely there would be some potential funding from them – perhaps they could develop a general national program (thus showing a “vision” and enabling them to measure Canada-wide results).
2. Provinces (again to my knowledge) have regulatory authority over power generation. For example, Nova Scotia Power is a private corporation, but the Province has a Utility and Review Board that regulates their efforts. Based on their connection to power use, the Provinces could adopt their own incentives that could attach to the overall federal initiative.
3. Municipalities could help in other ways. For example, Pembina Institution talks about giving loans that are attached to properties vs. attached to people – which could make it easier for people to get past the high up front costs: “Using local improvement charges to finance building energy efficiency improvements: a concept report.” http://www.pembina.org/pubs/pub.php?id=170
4. Utilities – provide incentive in terms of making it easier to hook up with net metering, among other things…

Cooperation between all of these groups is essential, as it’s hard for many people to understand the connections between these efforts – so a “one stop shop” is important.



Ontario seems to have a more transparent system for net metering http://www.energy.gov.on.ca/english/pdf/renewable/NetMeteringBrochure.p…
However, they state in the article that additional permitting may be needed to actually interconnect. Chris Henedrson's "plug and play" model is what is actually needed for net metering to work.

Another issue with net metering is power quality. For example, we don't have brown-outs in BC and in generaly power voltage is excellent quality (ie we can all sit here with our laptops plugged directly into the wall and the power quality is OK for the computer). BC hydro is not keen on having everyone dump poor quality power onto the grid network I don't think.


In reply to by anonymous_stub (not verified)


One thing to keep in mind is that BC does not have sudden power surges such as in Ontario as we are not all blasting air conditioners at the same time. However I think BC does face energy surges from starting up the large turbines associated with hydro?


There is a risk involved with pushing for microgeneration. This is difficult to explain without a graph, but I will try.

Early in a technology the price of production is expensive and you have your early adopters. At this point more carbon is being produced to construct the products (e.g. solar panels) then is being reduced through the use of microgeneration.

As time and technology advances, prices come down, there are more adopters, the technology becomes carbon neutral as the amount of carbon to produce the products is balanced by the amount of carbon saved in microgeneration. (Note, this argument could be using 'energy' instead of 'carbon').

Further down the curve the situation becomes carbon positive where there are many adopters and technology as advanced to a point where less carbon is used to produce the products and more carbon is saved by microgeneration.

The risk zone is between the carbon negative and the carbon neutral points in time. If a concept such as microgeneration stops with the first early adopters and does not reach carbon neutral stage the goal of reducing carbon output not only is not realized, but carbon output is actually increased.

Hi Wanda,

Good questions. I also wonder about the GHG impacts of producing these renewable technologies, but haven’t found a quick answer either way. However, it’s something that needs to be considered – eg. same with fuel cells, if the energy going into the fuel cells was initially created by burning coal, then what is the point? That said, I do question the ability of early adopters to be carbon positive – it would really depend on the number of years the system is used (ex. If a PV system is used for 10 years it may not be carbon negative, but if it’s used for 20 years it could overcome the GHG threshold and become carbon negative ??? – at least one would hope ).

It is important to get past the early adopters like you say. I think energy prices will be the biggest facilitator of change.