Under the Net Metering Program administered by the Ontario Power Authority, a participant who generates electricity primarily for the participant’s 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:
Generally, where the accumulated credit, which is not transferable or redeemable and that cannot be carried forward beyond a limited period, is received by a participant who generates electricity for purely personal consumption (i.e., a participant that does not receive such credit in connection with a commercial activity that is carried on with a view to earning a profit), the amount of the credit would typically not be subject to tax under the Act.