Advancing Community-Owned Renewable Energy in Ontario

OREC’s 2025 Advocacy Priorities

OREC advocates for policies that keep energy in the hands of Ontario communities.

“Families, communities and businesses aren’t just looking to use electricity – they’re also looking to produce it, store it and manage it in real time.”

— Energy for Generations, Ontario’s Integrated Plan to Power the Strongest Economy in the G7

Customers are empowered to manage their energy through what are called distributed energy resources (DER) – technologies like rooftop solar panels, batteries, smart thermostats, and electric vehicles that generate or manage power close to where it is used. 

DERs can be installed by customers “behind the meter” to give them control over their energy generation and use, or “in-front-of-the-meter’ within the service area of Hydro Ottawa or other Local Distribution Company (LDC) where they can be financed and owned by the LDC itself or a “third party” such as a private company or a community-based entity like a renewable energy co-operative.  Community ownership of front-of-the-meter DERs provides all citizens with the opportunity to benefit from DER projects, not just those who can install their own. 

LDCs often call DERs “Non-Wires Solutions (NWS)” to meet new demand in expanding areas – differentiating them from Wires Solutions such as new substations or power lines. 

Energy for Generations also recognizes that “the full value of these [DER] resources remains largely untapped. Customers have limited options to be compensated for the benefits their DERs provide to the grid, and many projects face barriers to participation."

OREC has been promoting this message for over 10 years and has watched other countries move forward with innovative policies, programs, and regulations to maximize the use of DERs. While we are pleased to see Ontario begin to enact regulations and policies to promote DERs, there is still no recognition of the value of community ownership, and little uptake by LDCs. Much more can be done. 

Where Change is Needed

Over the past several years, OREC has identified and advocated many specific program, policy, and regulatory changes that would advance ‘behind-the-meter’ DERs at customer sites and enable community-owned ‘in-front-of-the-meter' projects within the local grid. OREC has identified ten key areas where change is needed. 

Behind-the-Meter DERs

Expanded Net Metering

1. Extend net metering regulations to allow all tenants in a multi-residential building to benefit from a common solar generation system.

2. Allow customers to share credits from optimally placed solar generation systems on their buildings through Community or Virtual Net Metering.

3. Allow solar systems installed under Conservation and Demand Management programs to be net metered.

4. Allow Disaster Recovery Centres to become Local Power Hubs – generating and exporting more than they produce in a year so that they can store sufficient power to provide emergency services.

Virtual Power Plants

5. Link customer DERs together remotely to reduce peak demand.

Front-of-the-Meter DERs

Local generation and storage are ideally suited for community/local ownership as these projects would be located on the local grid (where people live and work), and can be scaled in increments of kWs or, in several cases, MWs of capacity. These projects can also serve as a critical educational function; as people who invest in their community resiliency, and benefit from energy projects, will certainly take the time to understand and support it. 

Local Generation Programs

6. Give priority to community owned projects within the planned Local Generation Program recognizing the benefits of locally owned DERs.

7. Offer a subscription-based Community Solar program that allows low income and tenants to benefit from community owned local generation projects.

Virtual Power Purchase agreements – VPP’s

8. Amend current regulations to include large demand customers within LDC service areas to purchase power from community owned projects.

Enabling/Mandating LDCs

9. Harmonize IESO Regional Integrated Resource Planning with OEB regulations and the Local Generation Program to ensure LDCs rigorously evaluate and use DERs.

Public/community ownership of large renewable projects

10. Require a minimum equity stake for public or community ownership in procurement of large renewable power or battery projects. 

Below, OREC identifies some of the barriers to the advancement of local renewable energy and storage. We then propose specific programs, policies and regulatory changes needed to remove these barriers and enable expansion of community owned local generation. Together, these changes would also improve grid resiliency and help to balance the local distribution grid. 

Barriers to the Advancement of Local Renewable Generation and Storage 

OREC identifies the following barriers to the use of DERs, and in particular customer and community owned DERs. 

Restrictive net metering regulations

• Currently in Ontario, only one meter can be net metered in a multi-meter building. 

• Customers can generate only up to their annual consumption through net metering.

• Many customers in the community have limited space to install DER on their property behind the meter while other customers have more than they need to meet their annual consumption.

• Current efficiency programs such as Save On Energy allow customers to install solar power to save electricity but prohibit ever using this system to net meter, thereby significantly limiting its value and benefits to the customer and the grid.

Slow uptake of DERs by LDCs

Local Distribution Companies (LDCs) are not contracting with third parties to finance, own and operate DERs in their service areas when they are allowed to do so by the OEB and can claim a financial incentive for doing so in their application for rate increases. 

A flawed Integrated Regional Resource Planning (IRRP) process

The eligibility, costing and choice of Wires versus Non-Wires Solutions in regional grid panning is not transparent or comprehensive. The incentives provided for the use of third-party Non-Wires Solution in rate applications are also not considered in this evaluation. Less planned use of Non-Wires Solutions will mean lower targets for the planned Local Generation Program (LGP). This is contrary to the intention of the Ministry and OEB guidelines and objectives.

No recognition of benefits of community ownership

No financial or other benefit is assigned to community ownership of generation and battery storage in procurement processes,

Limited local support for large DERs

There is a lack of buy-in from some local citizens and aversion to larger imposed renewable generation and storage projects, particularly those that do not provide any local benefit from the projects or which are owned by outside corporate interests. 

Recommended Policy Changes and New Programs 

OREC recommends the following specific policy changes and programs to utilize the significant opportunities to install DERs on customer sites or on vacant land - both behind and in front of the meter - with financing, ownership, and operation by third party community entities such as renewable energy co-operatives: 

Customer Choice and Collaboration. Amend legislation to provide all customers with the right to consume, store, share and sell the renewable energy they generate, and to collaborate with other customers to do the same. This would provide LDCs the flexibility to manage local demand in their service areas using DERs and customers with the right to collaborate with other customers and their LDC to maximize DER potential. 

The European Union’s Renewable Energy Directive (EU) 2018/2001 Articles 21 and 22 give these rights of self-generation and formation of “Energy Communities” to all citizens. 

Local Community Owned Generation. We recommend that the proposed IESO Local Generation Program gives priority to recontacted FIT projects and new local generation facilities that are owned and financed by community entities such as renewable energy co-operatives. Community ownership adds significant social and monetary benefits which should be reflected in the procurement process.

Barriers to community ownership should be lowered or eliminated, including large performance security provisions and market participant requirements within future energy procurements, specifically for third party community DER generators. Parity should be ensured between Indigenous and community-based suppliers in future energy procurement. The monetary value of community benefits should be reflected in all procurement processes for renewable generation and storage.

A standard methodology for the valuation of local renewable energies is needed based on their environmental, line loss reduction, resiliency, and other benefits. Having such a standard methodology and database would ensure consistency across the province with respect to procurement and purchase of renewable energies. It would also consider the continued lowering of the cost of renewable generation and storage capacity and make planning and potential studies more transparent.

Virtual Power Plants (VPP). We recommend that LDCs be enabled to manage electricity demand through the use of Virtual Power Plants – a system that integrates multiple DERs on customer sites to provide peak shaving, load following and ancillary services, particularly in areas that are demand constrained.

Many customers are purchasing EVs and heat pumps. Many others have smaller solar micro-FIT or FIT projects which will be up for renewal starting in 2030 but are excluded from the proposed IESO Local Generation Program. This provides a real opportunity for LDCs to pool these generation, storage and demand response installations and operate them as a Virtual Power Plant. 

Well over 100 OREC members own one or more of these technologies and would be a natural partner to Hydro Ottawa for such a VPP. 

Community Solar. We recommend that Ontario follow US States and Nova Scotia and introduce Community Solar - a gateway for homeowners without suitable rooftops or financial means, and tenants who have no control over their building’s physical assets, to reap the benefits of locally produced renewable energy and contribute to electricity supply.

Community solar is a win-win for all parties involved, and allows all Ontarians to contribute to and benefit from our growing demand for power, whatever their means or location.

• A medium sized solar generation facility is installed at a suitable site within a community, and the electricity is fed directly into the local community grid. This facility could be on private or public vacant land, over parking lots, or large roofs. 

• Any electricity consumer in the community can subscribe to a portion of the facility’s kW capacity and earn credit for their share of the electricity generated on their bill. 

• Because of economies of scale, Community Solar costs less than individual household rooftop deployments and therefore achieves greater financial returns as well as better greenhouse gas impacts than individual household deployments. 

• Community Solar assets are self-financed, owned and governed by community-based entities such as renewable energy co-operatives. 

• Community Solar contributes to local economies and builds community wealth, while also helping Local Distribution Companies like Hydro Ottawa meet their increasing electricity demands. Generation can be placed in areas with high load growth and can offset the need to build expensive new transmission resources. 

Community Battery Storage. We recommend that Battery Energy Storage Systems (BESS), financed and owned by community third parties including renewable energy co-operatives, be enabled to balance the grid in peak constrained parts of the distribution system. These systems, like EV charging stations, would be exempt from demand charges and generate an income stream from arbitrage between time of use rates and grid balance (Ancillary Services) fees.

Local Community Owned Energy Hubs. We recommend that designated high growth multi-use economic communities, such as hosts of the IT industry, be enabled to finance, own, and operate their own community micro grid or energy park in collaboration with their local LDC. These community financed and owned energy parks would contain both renewable energy generation and storage and would operate jointly with behind the meter generation and emergency battery storage within local industries. The combination of rapid growth of demand, industrial net zero and ESG goals, and the need for back up generation makes this policy not only efficient but also necessary. 

Virtual Power Purchase Agreements (VPPAs). Ontario has amended regulations to allow certain Class A commercial / industrial customers outside of distribution grids to purchase renewable power from community owned off-site generators to manage their Global Adjustment peak demands. We recommend that this regulation be amended to apply to both Class A and Class B customers and to third-party generators within distribution grids. Further it should also allow the customer to purchase Renewable Energy Certificates under “contract for differences” power purchase agreements. See recommendations for regulatory change below. 

LDC Procurement and Regional Planning. The following reforms are urgently needed to increase uptake of DERs: 

• Direct LDCs to procure their own third-party community owned DERs within their service area, as allowed by the OEB. 

• Require LDCs to publish the results of their cost comparison of Wires and Non-Wires Solutions in their Regional Integrated Resource Planning Process. 

• Require this cost comparison to include the local benefits of community ownership and the rate incentive allowed for third party owned NWS. 

• Require LDCs to collaborate with communities to build micro-grids and energy parks in high growth economic communities. 

• Provide support to LDCs to build their capacity and modify their billing and management systems to deliver DERs. This would minimize the cost of delivering the innovative policies described above so that LDCs can pass on more of the savings to customers. 

• Interconnection costs across the province should be standardized and socialized through the rate base to ensure that every LDC charges a standardized connection cost per kilowatt level. This will help ensure equity of connection.

Public and Community Ownership of Large Projects

• Direct Ontario Power Generation (OPG) to fulfil its mandate to publicly finance and own large grid connected renewable generation and storage projects and participate in major grid capacity procurement processes. Publicly owned generation can be installed at lower cost and have the capability of providing more local benefits and attracting local buy-in. 

• In IESO procurement, require at least 20% ownership of all large renewable supply projects in the province to be publicly or community owned. 

Encourage Exclusive Behind-the-Meter Energy Suppliers. OREC recommends that regulations be changed to allow third parties to have an exclusive relationship with the LDC and then resell the electricity to the host customer, both from the grid and from locally generated renewable energy, but with a view to minimizing licensing and qualification barriers in so doing. 

Ontario currently allows Behind-the-Meter facilities to be owned and operated by third parties. These facilities typically supply only a portion of the host facility’s annual load.

Recommended Regulatory Amendments

OREC recommends the following Regulatory Changes.

To maximize the DER potential “behind the meter” on customer sites:

• Amend Ontario Reg 541/05, Net Metering, to allow the transfer of generation credits between LDC-metered accounts (including different rate classifications) that are physically located at the same facility. The credits would be transferred through non-cash monetary credits. The credits would be calculated at the rate class of the generation account (common area account) and shared with the residents under the same requirements of the current regulation.

• Amend Ontario Reg 679/21, Community Net Metering Projects, to allow projects that have more than one account owner to participate and to share net metering credits among participants. The existing Community Net Metering Projects pilot regulation requires that all participating accounts must have the same account owner.

• Amend Ontario Reg 541/05, Net Metering to allow designated Disaster Recovery Sites to be able to always generate to the maximum capacity that the facility can install (no net metering limit 12-month limit). A Disaster Recovery Site should have an income stream to help offset operational and maintenance costs.

• Clarify and re-interpret Ontario Reg 541/05 Section 7.1, Net Metering, to interpret a customer’s “own use” as including the ability for a third party to convey, distribute, sell, offer to sell, or resell renewable electricity generated on the customer’s building or facility. 

To enable both Class A and Class B customers to take advantage of using offsite renewable generation to lower their power bills and their carbon footprints as well as their peak demands:

Amend Ontario Reg 429/04 to enable all Class A and B distribution and transmission system customers to sign “contract for differences” PPAs with community owned distribution system non-utility generators, including renewable energy co-operatives. Further amend this regulation to allow PPAs to include purchase of electricity generation and/or renewable energy certificates in addition to peak demand management.