Canada's New Policy to Allow Tax Write-Off for C&I Renewable Energy Assets

In February 2018, the Canadian government announced that it would work toward phasing out coal generation by 2030. In pursuit of achieving this goal, a series of new regulations were put in place to reduce CO2 emissions and incentivize the adoption of renewable energy resources. Most recently, the Canadian government announced a new policy through which businesses adopting clean energy solutions will be eligible for a full tax write-off for the fiscal year in which a renewable energy system is commissioned. This will enable businesses to lower their taxable income, and thus tax liability, nationwide. As part of the Fall Economic Statement 2018, the policy will go into effect for assets that are acquired after November 20, 2018 and will gradually be phased out by 2027. Eligible renewable energy assets include solar energy, battery storage, and EV charging infrastructure. Through this new policy, the business case and access to finance for renewable energy assets will be greatly improved. 

The Global Adjustment Charge Drives Distributed Energy Storage Deployments in Ontario

The Global Adjustment (GA) charge, introduced as part of the Green Energy Act in 2009, was implemented as a strategy to shift Ontario away from coal-based electricity generation toward green, sustainable alternatives. While the GA has helped the province achieve that goal, becoming the first locale in North America to go coal-free, it has also significantly raised electricity costs for many commercial and industrial (C&I) customers. 

However, the GA charge has also become the foundation of the business case for large-scale distributed energy storage systems (LDESSs) in Ontario. While all customers pay this charge, customers with peak demand of more than 500 kW pay based on how much their peak demand contributes to Ontario’s overall peak demand on the 5 highest demand days of the year. As a result, LDESSs are increasingly being deployed throughout the province to manage these charges by reducing building load during the days when the grid experiences the most stress.

Ontario Power Generation Partners with Stem

In November 2018, Stem, which offers C&I customers battery and software solutions to manage electricity costs, partnered with Canadian state-owned utility Ontario Power Generation (OPG) to offer businesses in the province no-money-down DESS solutions using artificial intelligence to help manage energy decisions now and into the future. Primarily employed to curtail GA charges, Stem purports that, as power market rules evolve, DESSs will be able to provide other services that can accrue revenue or generate savings such as demand response and ancillary grid services. This partnership, and Stem’s business model, highlights how the electric power industry is evolving toward a more decentralized grid consisting of a mix of distributed energy resources technology and software solutions that have the potential to benefit both utilities and their customers. 

However, as utilities like OPG move from regulated commodity providers to sophisticated energy solutions providers, customer experience (CX) is becoming increasingly important as new competitors are rapidly emerging at the grid’s edge. For utilities to cement themselves as the leading energy service providers of the future, where 75% of $6 trillion in global value is expected to shift downstream, they must invest in CX transformation to help guide, retain, and capture new customers. Guidehouse Insights’ recent white paper, The Changing Value of Customer Experience in the Energy Cloud, details how incumbent utilities can create a truly seamless CX through digital best practices that enable customers to achieve their goals—such as cost savings, reliability, resiliency, sustainability—while also remaining a customer of the energy company or utility.