May 5, 2026

By Bill Andrews, Tom Hackney, and Funmi Oguntoye

This article provides basic information underlying the BC Utilities Commission’s recent approval of major changes to BC Hydro’s customer self-generation rates (see BCUC Approves Net Metering Changes.) The intention is to be descriptive, not to rehash the merits of net billing versus net metering.

Q1. What’s new with BC Hydro’s customer generation rates?

A1. The key change is that the existing Net Metering rate is replaced with a Net Billing rate. Existing Net metering customers who didn’t get BC Hydro’s $5,000 incentive can stay on the existing Net Metering rate until ten years after their net metering start date. In addition, there is a new Community Generation.

Q2. What is net metering?

A2. Net metering is BC Hydro’s optional rate for a customer to deliver surplus self-generation to BC Hydro after having met their own load. Note that BC Hydro’s net metering rate will be closed to new participants effective July 1, 2026.

Q3. How does “net metering” work for the grand-parented participants?

A3. Under BC Hydro’s net metering rate, participants use their clean/renewable generation first to reduce their own load. If and when they produce more power than they use, they provide the “excess” power to BC Hydro. For excess electricity they provide to BC Hydro during a billing period (two months, or, in some cases, one month) they get a credit in kWh on their bill for the next billing period. Say, for example, a net metering participant used 100 kWh and exported 10 kWh during billing period #1 and used 150 kWh and exported 0 kWh during billing period #2. The bill for billing period #1 would be for 100 kWh times the cents/kWh rate applicable to the customer. The bill for billing period #2 would be for 140 kWh (150 kWh minus the 10 kWh credit) times the applicable cents/kWh rate. The “net” in “net metering” refers to the customer being billed for their net electricity consumption, being their actual consumption (in kWh) net of (minus) their electricity exported to BC Hydro (in kWh).

Q4. How is the new “net billing” different than the grand-parented “net metering”?

A4. Under the form of net billing approved by the BCUC for BC Hydro, a participant is billed for (a) the amount of electricity they consumed (in kWh) times the applicable rate, minus (b) the amount of electricity the customer exported to BC Hydro (in kWh) times a certain “energy price” (10 cents/kWh in this case). Under net billing, the “netting” is in dollars. Under net metering, the netting is in kWh.

Q5. Does a BC Hydro customer’s meter actually turn backwards when the customer is sending power to the grid?

A5. No. BC Hydro’s meters are digital and they don’t turn backwards. The meters track separately the amount (and timing) of electrical energy (in kilowatt-hours) flowing (a) from BC Hydro to the customer and (b) from the customer to BC Hydro.

Q6. Do net metering or net billing rates apply to a customer’s use of their own generation to meet their own load?

A6. No. A BC Hydro customer is entitled to use power from their own generation to reduce their own electrical load. (Just as a customer is entitled to reduce their load by turning off their lights when they leave a room or by installing a more-efficient electric appliance.) It’s only when the participant wants to send some or all of their self-generated power to BC Hydro that a rate for net metering or net billing is needed.

Q7. Does BC Hydro care how big a participant’s generation equipment is?

A7. Yes. The (grand-parented) net metering rate has a 100 kW maximum on the nameplate capacity of the customer’s generation facility. The new net billing rates use a “net injection limit” on the amount of power the participant can deliver to BC Hydro after the participant meets its own load (100 kW per phase for regular net billing customers and 2,000 kW (i.e., 2 MW) for participants in the community generation rate).

Q8. Why does BC Hydro care how big a participant’s generation equipment is (under net metering) or how much power the participant injects to BC Hydro (under net billing)?

A9. The limits are intended to prevent potential problems on the feeder line without requiring all would-be participants to pay for time-consuming and costly site-specific studies to determine whether the proposed generation facility would actually cause problems.

Q10. Up to this point in the article, we have talked about the mechanism for BC Hydro to remunerate a participant for power delivered by the participant to BC Hydro on a billing period to billing period basis. What about “annual excess generation”?

A10. “Annual excess generation” applies only to net metering. Under net billing there will be no “annual excess generation” because BC Hydro will pay for all excess generation (at the BCUC-approved energy price of 10 cents/kWh). Under net metering, “annual excess generation” occurs when a participant exports more power to BC Hydro than the participant consumes over the course of a year. Under the existing net metering rate, BC Hydro pays for the “annual excess generation” at a price based on the Mid-Columbia market average price (which, as it happens, is currently almost the same as the 10 cents/kWh energy price under net billing), rather than continuing the billing-period to billing-period kWh credit indefinitely.

Q11. Is it correct that under BC Hydro’s recently-approved net billing rates a participant with solar panels who exports power to BC Hydro during daylight hours and receives power from BC Hydro overnight is selling electricity at a lower price than the participant pays to buy power?

A11. Yes. The retail rate for electric energy from BC Hydro to the participant is, in most cases, higher than the 10 cents/kWh energy price for electricity delivered by the participant to BC Hydro. This is because the retail rate for energy (kWh) recovers BC Hydro’s costs of providing (a) capacity (being able to meet peak load) and (b) customer service, in addition to BC Hydro’s costs of electrical energy alone.

Q12. Under net billing, what happens if a participant using solar panels exports power to BC Hydro during the day and uses power from BC Hydro at night?

A12. During the daylight hours a net billing participant with solar panels would first use their own generation to meet their own load, and export any additional power to BC Hydro. During the day, the net billing solar participant would benefit financially by (a) eliminating their purchase of electricity at their retail rate, and (b) selling the excess power to BC Hydro for 10 cents/kWh. At night, the net billing solar participant would purchase electricity from BC Hydro for the participant’s own use, as would any other customer. Also, note that both (grand-parented) net metering and (new) net billing residential customers of BC Hydro are eligible to enroll in the BC Hydro’s optional residential time of day rate.

Q13. Under net billing, does BC Hydro pay for electricity it receives from the participant at the same time the electricity is delivered to BC Hydro?

A13. No. Under net billing, electricity exported by the participant to BC Hydro during a billing period is paid for by BC Hydro on the participant’s next bill. Also, note that customers in BC Hydro’s non-integrated areas are eligible for net metering (in the past) and net billing (going forward) although the NIAs are, by definition, not connected to the integrated system.

Q14. Is it correct that under net billing excess solar generation in the summer cannot offset winter electricity use at retail value, unlike with net metering?

A14. Yes. Under the approved net billing rates, electricity exported to BC Hydro is paid for at the energy price (10 cents/kWh). Reimbursement is not based on participant’s retail rate.

Q15. Should a would-be participant size a new solar system differently under net billing than under net metering?

A15. Maybe. Remuneration from BC Hydro to the participant for excess self-generated electricity delivered to BC Hydro is somewhat less under net billing than under net metering. This would suggest a smaller self-generation unit under net billing than under net metering. However, most existing net metering participants are motivated by social considerations, not by financial returns.

Also, note that the participant’s lower remuneration for exported energy under net billing compared to net metering is offset, if not reversed, by BC Hydro’s incentive payment of $5,000 for a new behind-the-meter solar generation facility.

Q16. Is it correct that under net billing it is more economical to size a participant’s generation facility to match the participant’s own electricity use rather than to maximize total generation?

A16. No. There is no question that a 10 cents/kWh energy price under net billing is less than most participants’ retail rate for electrical energy. However, regardless of net billing or net metering, a customer’s new behind-the-meter generation will first serve the participant’s own load and thereby avoid purchasing electricity at the participant’s retail rate. The participant’s avoided cost of purchasing electricity from the utility will in most cases be much larger than the revenue from sales of exports under net billing or the avoided cost of kWh credits under net metering.