Proposed changes to NWT solar policy leave some concerned

About a year ago, Norah McNaughton took out a roughly $36,000 loan through the federal government’s Canada Greener Homes Loan program to install solar panels on her home in Yellowknife.

While the federal program is now closed, it previously offered energy efficiency loans that were interest-free for 10 years.

“It was actually cheaper to take out that loan and install solar and pay that over the next 10 years than it was to be paying my monthly power bills,” McNaughton said.

Her solar system is tied to the local energy grid and helps provide electricity to other power customers.

Under McNaughton’s current agreement with Naka Power, she said the company provides her with a credit for the electricity her system contributes to the grid. This type of agreement is often referred to as net metering.

She said she worked with a contractor to design a system that could generate enough electricity during peak months to cover her energy bills, with credits during the winter’s significantly fewer daylight hours.

However, proposed changes to the way energy producers are compensated for their contributions to the grid could mean she is saddled with a regular power bill on top of the monthly loan payments.

“The cost of living up here is already going up so much,” said McNaughton.

“It’s just giving us more and more reason to consider relocating south, because it’s getting more and more difficult to earn enough money to stay up here.”

What has been proposed

In 2025, the Government of the Northwest Territories directed the territory’s power regulator, the Public Utilities Board, to make changes that the GNWT hopes will modernize the system and promote more renewable energy.

The changes would be made through what has been dubbed an Integrated Power System Plan, the need for which energy minister Caroline Wawzonek has previously said “is very urgent.”

Proposals include allowing more renewables in diesel-powered communities, adding more regulatory support for electric heating, and creating a “low water rate rider” fund that the GNWT says will “better buffer electricity costs” during droughts.

However, another proposed change includes shifting from the net metering system to a system often referred to as net billing.

McNaughton’s understanding is that under this new type of agreement, the electricity she generates would be sold to the power company at a rate lower than retail, meaning she would earn less back in credits than the price at which the company would sell the electricity.

In a submission to the Public Utilities Board on July 2, the NWT Power Corporation suggested net billing compensation of $0.007 per kWh in the Snare zone, which includes Yellowknife, Dettah and Behchokǫ̀. It also suggested compensation of $0.334 per kWh for the thermal zone, which includes most diesel-powered communities.

For net billing in the Taltson zone, which includes Fort Smith, Fort Resolution, Hay River, Enterprise and the Kátł’odeeche First Nation, NTPC recommended zero compensation “due to the current surplus capacity” – with a possible change only if the Taltson hydro plant is offline for long periods.

“The intermittent nature of renewable energy can disrupt thermal plant operations, causing diesel units to run below optimal levels and reducing efficiency,” the power corporation’s submission stated.

Currently, the base retail rate Naka Power charges customers in Yellowknife is $0.237 per kWh. Customers in the thermal zone pay NTPC a base rate of $0.353 per kWh, which is subsidized by the Territorial Power Support Program.

Previous studies commissioned by the territorial government have presented evidence that paying retail rates to net metering customers is inequitable.

One study published in 2021 used Fort McPherson as an example.

At the time of the report, residents in Fort McPherson were being charged $0.68 per kWh of energy used. Of that, $0.36 represented the cost of fuel and $0.32 represented the cost of everything else, like transmission lines and power plants.

But if you were a net metering customer in Fort McPherson generating your own power, you were getting a credit for the full $0.68 on your bill for every kWh you supplied to the grid.

In other words, for every kWh your solar panel gave to the grid, the power company saved 36 cents on diesel, gave you that 36 cents, and then gave you another 32 cents it would have otherwise spent on infrastructure, even though you still use that infrastructure when the solar panel isn’t producing power.

The report states the rules could be changed so that net metering customers don’t get the full 68 cents (in the Fort McPherson example) but instead get a credit that’s closer to the cost of the fuel saved.

These rates, however, would be different in a community like Yellowknife, where much of the electricity consumed is generated by the Snare hydro system.

A more recent study, commissioned by Naka Power and published in December 2025, echoed some of the arguments in the earlier analysis.

The 2025 study noted that under net metering, utilities recover less revenue from power producers like McNaughton for grid infrastructure and other fixed costs. The study argued that this shifts costs from solar adopters to those without solar.

However, the degree to which this shifting of costs may be happening now in the NWT was not calculated in the study.

The analysis found American states such as California, New York and Michigan have moved away from traditional net metering in recent years.

“The shift from retail-rate NEM [net energy metering] to net billing and gross billing frameworks is being driven by the need to correct significant cost-shifting and to align distributed energy resources incentives with the true value delivered to the system,” the report noted.

No carry-over

McNaughton said the NWT’s proposed new system would also prevent her and others from carrying credits over from one month to another, which previously enabled the power she generated in the summer to pay for her winter power needs.

She said this could have a significant impact on her family’s finances.

“It doubles our power bills for the next eight years because we’re only one year into this Greener Homes Loan,” said McNaughton.

A spokesperson for the territorial government said the GNWT is exploring the possibility of switching to a net billing system because the current approach “creates costs for utilities that ultimately need to be recovered through electricity rate increases.”

“The current net metering program can result in customers being compensated for excess electricity at a rate that is greater than its value to the electricity system,” the spokesperson said.

An analysis commissioned by the GNWT estimated that net metering accounted for approximately $300,000 of utility net revenue loss in 2019, a number that was estimated to balloon to between $1.5 million and $2.4 million by 2030 under the existing rules, the spokesperson said.

They added this increase would be driven by increased uptake in the program.

“Those costs ultimately have to be recovered by the utilities, which can put upward pressure on electricity rates for all customers,” the spokesperson said.

“This is an equity concern, because not all customers are able to make the upfront investment required to install a solar system.”

Impact on small business

Two owners of Yellowknife-based company Arc Electric and Solar Installations circulated information about the proposed changes ahead of an August 14 deadline to register as an intervener or stakeholder in the coming regulatory process.

They spoke with Cabin Radio under condition that they not be named, as they feared professional repercussions related to work they do that is separate from the company.

The owners said they’ve seen their business grow significantly over the past year, allowing their team to grow from one employee in 2020 to 10 by 2025.

They said the increasing affordability of solar equipment, financing options available to customers, and the rising cost of power are likely behind the uptick.

“It’s a capital investment up front, but with the paybacks on the current system that we have, it makes a lot of sense,” said one of the company’s owners.

They said the changes being proposed could disincentivize solar adoption for residential customers in the NWT, impacting small businesses like theirs, which they say are growing across the territory.

“It’s going to negatively affect all of those companies who employ people in the North, who pay taxes in the North, who buy materials,” said one owner.

He said it’s possible the current compensation structure could be slightly slanted in favour of the solar producers, but not to the degree that it would be adding significant costs to regular customers.

“To say that solar is increasing cost is an unfair oversimplification,” said one of the owners.

“I think maybe it does in a small way, but it certainly doesn’t to the degree that we’ve seen our bills go up.”

The company owners said they’d be open to fair modifications to the current system and would like a transition period longer than the two years proposed by the utilities.

In NTPC’s submission to the utilities board, it examined similar transitions in other Canadian jurisdictions.

When Saskatchewan implemented rate changes for net metering customers in 2019, the province allowed existing customers to continue being compensated at their previous rate until their contracts expire in 2029.

Similarly, customers in British Columbia were allowed the legacy rate for 10 years from their interconnection date following the implementation of a new Self-Generation Rate.

In response to questions about the proposed transition period in the NWT, a spokesperson for the GNWT said it “recognizes that existing net metering customers made investments based on the rules that were in place at the time.”

“For that reason, the GNWT directed the PUB to provide an appropriate transition or grandfathering period so existing customers are not unfairly penalized by changes to the program.”

The spokesperson noted the PUB is currently considering the appropriate length for the transition period.

‘Killing the industry’

McNaughton said the proposed rules under a new net billing system are not what she signed up for when she acquired her Greener Homes Loan.

“I’m sure I’m not the only person who took out federal funding to be able to pay for this,” said McNaughton. “I think they should be honouring the contract that I initially signed.”

She said that to her understanding, the net metering agreement she has with Naka doesn’t have an expiry date.

The Arc owners believe there must be a different way to address the issues.

“There’s a solution out there, and there’s a way to incorporate solar into a better way of doing things that isn’t killing the industry,” said one owner.

According to the proceeding’s schedule, an independent consultant is set to be appointed in September before submissions are studied.

A public hearing on the matter is set to take place from June 14-16, 2027.

Cabin Radio requested an interview with representatives from NTPC and Naka to further discuss each company’s submission.

Both utilities declined the request, saying they could not publicly comment on matters currently before the PUB.