Carbon offsets from the Micro-Generation (Distributed Renewable Energy Generation) Protocol are a possibility for small scale solar and wind power production. The potential return being around a cent per kWh at current carbon prices.
Under the Electric Utilities Act, the Micro-generation Regulation allows Albertans to meet their own electricity needs by generating electricity from renewable or alternative energy sources.
The regulation encourages small solar or wind power generation that feeds back into the electrical grid. As of April 2021, there were over 6000 micro-generation installations across the province.
With a carbon offset protocol approved in 2013, this activity has the possibility of generating additional income through carbon offsets. The main source of income from micro-generation however, is the energy generated. This is credited on the bill, minus the delivery charges, etc. At present there is no federal/provincial/municipal subsidy (feed-in tariff) for micro-generation in Alberta.
For businesses, the tax write-off on solar equipment is accelerated, up to 50% Capital Cost Allowance per year. See: Income Tax Folio S3-F8-C2, Tax Incentives for Clean Energy Equipment.
The carbon yield from micro-generation is set at under a kilogram (0.57) per kilowatt hour (kWh) for 2021. So an install that produces 12,000 kWh/year would give 0.57 X 12,000 = 6840 kg = 6.84 tonnes. For more information, see the Carbon offset emission factors handbook.
For example, based on net price of carbon to the farmer of $15.00/tonne, 6.84 tonnes would equal $102.6 for carbon from that size of install – about a cent per kWh.
Qualifications and record keeping
In order to qualify for these carbon offsets, installations must:
- produce less than one megawatt
- agree upon the ownership of the carbon
- not have used government incentives for the renewable equipment
- provide power production records
Power production records are suited to the offset system as they are produced by almost all solar systems. These records are kept either by the installation company or the distribution company. Meter accuracy may be an issue, as the protocol specifies sealed meters and data loggers with 95% accuracy.
Progress on this protocol has been slow, due to the small amount of supply, low carbon prices and uncertainties around certification requirements. However, one project has generated around over 9000 tonnes of carbon offsets as of 2021. For more information see the Alberta Emissions Offset Registry – Project Details.
The information contained here is the interpretation of Agriculture and Irrigation. Alberta’s carbon offset system is managed by Alberta Environment and Protected Areas. Offset projects must comply with the most recent quantification protocols and program requirements outlined under the Alberta Emission Offset System.
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