Understanding Net-Billing

Before diving into the SolarClub™, it’s important that you understand how Alberta’s billing setup works differently from other provinces. In Alberta, we have what is called a net‑billing model. Net‑billing means you buy and sell electricity at your current electricity rate, instead of receiving kWh “credits” like in a net-metering system. Any extra energy your system produces is converted into dollars once it goes through your electrical meter, which means how much you get compensated for it is heavily dependent on your electricity plan and rate.

Ok, so what’s the SolarClub™?

The SolarClub™ is a unique utility pricing structure offered by select electricity retailers in Alberta and is designed specifically to help solar homeowners maximize their solar grid-export value. It is only possible due to the net-billing grid fee structure that we have in Alberta. This is how it works:

1. As a Microgenerator, you can freely switch between two electricity rates

• “Hi” Rate (above 33¢/kWh): to use during high-production months - typically from March to October

• “Lo” Rate: (between 6 - 9¢/kWh): to use during low-production months – typically from November to February

2. During spring and summer, you export lots of energy at the Hi Rate

During high production months, your solar system (if appropriately designed) will produce more energy than your home needs, and through the SolarClub™, that surplus is sold back to the grid at 33¢/kWh. This is how you “bank” solar-generated dollars in your account.  

3. During winter, when production drops, you switch to Lo Rate

You’ll still buy electricity in the winter (because of snow coverage and because the sun gets shy and hardly shines), but you’ll be buying it at the Lo rate, which is already competitive on its own. However, the magic is in the accumulated credit you built up during the previous summer, which you use to pay off your winter bills.

4. The Difference between the rates that eliminates your bills

Because your excess solar energy was exported at the higher summer export rate, you end up earning more per kWh in summer than you pay per kWh in winter. The difference between these two rates goes a long way in covering the fixed charges on your bill and allows you to reduce/eliminate your bills all year.  

5. What if I build up a bunch of credit?

Some SolarClub™ retailers let you choose whether you want to receive the excess credit built up in your account back as cash, or whether you want to keep it there to use to pay off your winter bills. Others don’t offer the credit payout option, so make sure to double check before signing up!

6. Does solar make sense without the Solar Club?

Yes, in most cases; however the Solar Club can shorten your payback period by 1–2 years through hundreds or even thousands of extra dollars of savings per year, so you should use it! If your system produces 85% or more of your annual electricity consumption, then the SolarClub™ is typically a strong option to improve your financial returns.

7. What about Carbon Credits?

We’ll cover this in more detail in another blog but yes, selling your carbon credits can also help improve the financial returns from your solar system. However, the relative impact that selling them makes is much, much less than using the SolarClub™. A typical residential microgenerator might make an extra $50-150 per year from selling their carbon credits. Some SolarClub™ offer carbon credit purchasing schemes, so make sure to double check whether this is a service offered by a SolarClub™ retailer before signing up!

So How Does the Solar Club Make Any Money?

While SolarClub™ rates are designed to give microgenerators a valuable advantage, the SolarClub™ also need to make money to stay in business. So how do they do that?

Individual solar homeowners are too small to participate meaningfully in Alberta’s wholesale electricity market on their own. So, what the SolarClub™ does is group (“aggregate”) all the microgenerators into one “Virtual Solar Community”. This aggregation lets the retailer strategically participate in Alberta’s power pool to generate the revenue that funds the Hi rate as well as the SolarClub’s™ revenue.

Want to see how the SolarClub™ fits into your overall solar payback?

Our team can review your usage and give you a simple, personalized breakdown. Get in touch if you’d like to learn more!