Lately several news items have cropped up suggesting that cheap solar is killing the grid (source). The too long did not read version roughly goes like so: Net metering results in a revenue loss to the utility, the then cash strapped utility cannot afford to provide necessary upgrades and falls into disrepair or has to hike your power bill, thus more people to go solar, resulting in less cash for the utility, adding fuel to the death spiral. Lets have a look at this one, at the heart of it, its all about money, in fact our government here has been subsidizing electricity for decades long before residential solar was born.
Since its about the money, a sensible place to start is Toronto Hydro’s annual reports, which reveals that in 2024 Toronto Hydro (mostly) bought 24.2 TWh of electricity for 3 B$. Why that is 12.3 c/kWh that Hydro is spending on electricity. Well, I got about 13 c/kWh of credit in August for power I sent out to Toronto Hydro (source), that 0.7 c/kWh negative margin, hardly seems likely to send Toronto hydro straight to bankruptcy.
Particularly when you consider that my solar power did not need to be transmitted very far to be consumed, skipping substations, transmission lines etc. something Toronto Hydro spent 882 M$ maintaining in 2024 (about 20 % of revenue). Naturally, that 12.3 c/kWh is the average cost to Toronto Hydro per kWh. Since the electricity rates are higher during the day when the sun is shining perhaps 13 c/kWh is market price (source)? Lastly, I got a 13 c/kWh of bill credits, not cash. While exact percentages are tricky to come by, some googling suggests that my “bill-credit” might only be worth 70% of cash (source), if so, then the 13 c/kWh of bill credit is worth 9 c/kWh.
Its worth noting that public money has poured into electricity generation in Ontario for a very long time. Both Ontario Power Generation, and its predecessor Ontario Hydro were crown corporations (source, and source). Crown corporations are owned by either the province or the federal government and are regularly supplied with capital from both governments, recently in the form of $3B for small modular reactors (source). Given that, I am sure our governments would toss money at our grid should the need arise. They have in the past, as Ontario Hydro’s original mandate was to operate a grid to ferry electricity from privately owned hydro generating stations to Ontario’s cities (source).
So, my solar roof is not financially fleecing Toronto Hydro, after all, Toronto Hydro gets 9c/kWh of cash value, and sells it back at 12.3 c/kWh without the need to utilize transmission lines or transformer stations, easy money for Toronto Hydro Id say.
So what does a solar rich grid look like? Bankruptcies all around? Nope, just free power for three hours a day as recently announced in Australia (source). Now, Australia gets about 18% of their kWhs from solar (source), which is a far cry from Toronto Hydro’s 0.5% (Calculated using data from Toronto Hydro’s sustainability report (source) as follows: At the end of 2024, Toronto hydro had 10 MW (peak presumably) of solar connected. Combined, this generated approximately 1.16 GWh of electricity (assuming 1,163 kWh/W-peak, source), which is 0.5 % of the 24.2 TWh of total electricity delivered to Toronto Hydro customers as outlined above).
Electric car adventures 