Under the Net Metering Program administered by the Ontario Power Authority, a participant who generates electricity primarily for its own use from a renewable energy source is billed only for the difference between the value of the electricity consumed by the participant and the value of the electricity supplied to the provincial electrical distribution system, so that where the value of the participant’s electricity consumption is less than the value of the excess electricity supplied, the participant will accumulate a credit, which is available for use against the participant’s future electricity consumption in the next billing period – and if the accumulated credit cannot be used in its entirety within a given 12-month period, it will be forfeited as of the next billing period.
CRA stated:
[W]here a participant in the Net Metering Program generates electricity that is consumed in the course of carrying on a business or earning income from another property (such as a rental building), the value of such a credit would be included in the participant’s income from such business or property. This income inclusion will be realized in the taxation year in which the credit is applied against the participant’s electricity consumption costs and it will be equal to the value of the credit applied. However at that time, the participant would typically be entitled to an offsetting deduction for the cost of the electricity consumed by the participant, being an expenditure incurred for the purpose of earning income from the business or property.