A new policy allowing small producers of renewable energy to sell excess electricity back to the grid was delivered Tuesday.

Energy, Mines and Resources Minister Scott Kent said his government and Yukoners in general are concerned about having a future with clean energy.

Promoting the use and generation of renewable energy through a policy that encourages conservation and provides a financial incentive to pump excess energy onto the grid is a step toward the future,

said Kent.

The minister said the next few months will also see another policy announced for large independent producers, along with more about a new major hydro development that Premier Darrell Pasloski has

committed to.

"This is the thin end of the wedge,” Kent said of Tuesday's announcement. "We have some exciting announcements coming forward in terms of our clean energy future.”

The minister pointed out approximately 95 per cent of the Yukon's energy is already produced by renewable hydro generation.

Discussions around the micro-generation policy reach back to 2009 and are in keeping with the Yukon Party's 2009 energy strategy, he said.

Like others in the business, Kent isn't sure how much interest there will be or how the financial arrangements will work. He did point out, however, that the policy calls for review after two years.

Under the policy, individual homes and businesses will be able to sell excess power to the grid, provided it's produced using sources of renewable energy – micro-hydro, wind, solar and biomass. The

calculation will be made once a year, not monthly.

Private producers will be responsible for all costs of their equipment to produce energy, and all costs associated with hooking the system into the grid.

The two electrical utilities, Yukon Energy and Yukon Electrical Co. Ltd., will be responsible for purchasing, installing and maintaining the

metering equipment required to measure the two-way flow of energy.

Generating systems of different sizes will require different levels of consultation with the two utilities and the Yukon government, which is financing the policy and paying for the surplus energy sold to the grid.

Shane Andre of the government's Energy Solution Centre explained the upcoming price for surplus energy varies from communities on the unified grid and isolated communities off the grid.

The price is based on what it would cost in the different communities for the two utilities to produce the same amount of energy, he explained.

Andre said in isolated communities powered by diesel generation, the government will pay 30 cents per kilowatt hour, because that's the estimated cost of producing a kilowatt hour from diesel generation.

The government will pay 21 cents per kilowatt hour of excess energy on the main grid, because that is the estimated cost of producing a kilowatt from a new source of energy, he explained.

The estimated cost of a kilowatt hour from hydro-generation on the main grid is 8.75 cents per kilowatt. But having to produce that same kilowatt with a new source is estimated at 21 cents, Andre said.

He said the beauty of the new policy lies in how it first of all encourages conservation, then pays micro-generators for selling the energy they've conserved back to the system.

Asked to explain, Andre went through the math, using a micro-hydro project proposal with a generating capacity of five kilowatt hours. A similar but smaller proposal just outside the city limits is currently

before authorities for approval.

• 24 hours x five kilowatts of generation per hour equals 120 kwhs of energy per day.

Calculated using an efficiency rate of 90 per cent, that translates into 39,420 kilowatt hours of energy a year.

• Records show the average Yukon home – not heated by electricity – consumes about 1,000 kwhs a month or 12,000 kwhs per year.

• There would potentially be a surplus of 27,420 kilowatt hours coming from the residential project.

At 21 cents per kwh, that works out to $5,758 per year available for sale back to the grid.

The cost of the system up for approval is estimated at between $20,000 and $25,000.

Andre said the policy not only promotes conservation by micro-generators so they can maximize the surplus available for sale but also provides an incentive to keep their system running smoothly.

With the release of the Yukon's policy Tuesday, Nunavut and Newfoundland are the only two jurisdictions in Canada without a similar incentive policy, he pointed out.

Yukon Electrical spokeswoman Laura Carlson said this morning they have had a number of inquiries over the last year but what that translates into, it's impossible to say.

There's a number of solar energy projects in the city, she said.

Carlson pointed out Yukon Electrical is currently involved in a 4.7-kilowatt solar project with the Kluane First Nation of Burwash Landing.

Anne Middler of the Yukon Conservation Society said the policy is the right step in terms of empowering Yukoners to promote conservation while providing an incentive to supply renewable energy to the grid.

The Yukon, however, has a long way to go to beef up the main grid with sources of renewable energy, she said.