Archives for the month of: April, 2012

In attempt to give some perspective to industry stakeholders, CanSIA held a webinar titled “microFIT and FIT 2.0: What it really means for Ontario’s Solar Industry”, featuring several expert panelists. Some of the key points from that webinar are discussed below.

There is now a realization that not everybody who applies can receive a FIT contract. The system of “first come first serve” has changed to one where certain projects are given priority. This was most likely introduced for at least a few reasons.  Firstly, more stringent eligibility requirements will reduce the volume of FIT applications. Secondly, it ensures that priority access is given to those projects that are more likely to succeed, ie. those without community or municipal opposition. Lastly, this amendment will alleviate some of the negative criticism, particularly around community opposition to wind turbines that the FIT program has received.

The suggested annual pricing schedule review is likely to be an improvement. It provides industry with definitive dates and timelines and establishes when changes will occur, which is in contrast to the current situation. Furthermore, it allows the FIT program to more accurately reflect changes in the price of modules or system components.

The Deputy Minister has not yet released how the new pricing schedule was calculated and it is viewed as being somewhat harsh on rooftop PV <10kW. Some attendees of the webinar suggested this may have been a political move considering that the Liberal government received continuous negative criticism from the Progressive Conservatives for the 80.2 cents/kWh tariff. This large reduction may also reflect a shift in the priorities of the provincial government towards larger scale projects where electricity can be produced at a lower cost.

The previous application procedure has been acknowledged as inadequate. The adoption of a more streamlined approach which synchronizes application processing times with project size seems to be a positive step forward.

The running theme of the webinar seemed to be that “the devil is in the details” and currently there is much information that has been left out that will need to be clarified in the updated FIT Rules from the OPA. For example, how does one demonstrate community support of a FIT application? What about the issue of connection capacity, ie. how does 10,700 MW break down? What does that mean by way of area? Stakeholders need clarity of information, for example, tables published regarding where there is connection capacity. People should have access to this information before they go to apply. How was the pricing schedule calculated? How will the new point system work? The list goes on.

Looking to the future, the draft OPA FIT Rules should be released shortly and this should clarify much of the ambiguity of the current recommendations. However, the panelists cautioned not to expect new FIT contracts immediately, suggesting that it may not happen until the Fall or perhaps sooner for microFIT and other small-scale projects.

Through all the ambiguity one thing seems clear: while simple enough in concept, the FIT program is an incredibly complex piece of legislation requiring meticulous planning and foresight for an effective execution. It must balance the needs of all stakeholders and do so in the context of a dynamic electricity system with real physical limitations. The fact that the policy is far from perfect has been acknowledged but what must also be acknowledged is the sheer difficulty of designing it. While the FIT program policy is not yet mature, it is in the process of maturing. Hopefully that fact provides some solace to a strained solar industry.

-Erik Janssen

(Engineering Physics, MASc, Year 2 at McMaster University)

The Ontario provincial government launched the ambitious Green Energy and Economy Act (GEA) in 2009 to encourage the adoption of renewable energy into the province’s electricity mix and to create a new sector of “green-collar” jobs. The largest component of the GEA is the Feed-In Tariff program (FIT). It allows any individual or community stakeholder to produce their own renewable energy and sell it to the local utility at a premium rate that is guaranteed for 20 years.

In terms of uptake, the program has generally been viewed as a success, with 2,000 FIT contracts and 12,000 microFIT contracts having been offered, totalling 4,600 MW of renewable energy. Furthermore, the province claims 20,000 jobs have been created since the program’s inception.

However, despite these successes, there currently seems to be a strong undertone of discontent in Ontario’s solar industry. It seems that the program has been on pause over the past several months, with new FIT contract offers being delayed. Furthermore, there are complaints about a lack of clarity from the provincial government on when this situation will be rectified.

Part of this delay is from the FIT program’s 2-year review that has been conducted over the last several months by the Deputy Energy Minister.  After having solicited feedback from various community stakeholders and private industry, the Ministry of Energy has recently finished a list of recommended FIT program policy adjustments to be adopted by the Ontario Power Authority (OPA). The document is publicly available at: http://www.energy.gov.on.ca/docs/en/FIT-Review-Report.pdf.

The FIT upgrade, unofficially dubbed “FIT 2.0,” has several changes but is stated to be a reaffirmation of Ontario’s commitment to clean energy.  Some of the more important changes are listed below:

  • The program target of 10,700 MW of non-hydro renewable electricity procured is set to be hit by 2015 where the previous date was 2018.
  • Instead of 2-year reviews, there will be an annual review of the pricing schedule in November of each year and changes will come into effect the following January.
  • To streamline the FIT contract approval process, three streams, based on the size and impact of the project, are suggested. This will allow MicroFIT projects and small-scale FIT projects to get through the system quicker.
  • Renewable energy producers should be given 18 months from the time a contract is offered to get their installation connected to the grid instead of the current three years.
  • FIT projects with community, municipal or aboriginal support will be given priority and this will be evaluated using a new points system instead of the old system which was first come first serve.
  • Tariffs should be altered according to a new schedule. Suggested reductions are greatest for solar PV. Hydro and bioenergy didn’t change and wind was slightly reduced. The highest tariff for roof-top solar <10 kW was cut from 80.2 cents/kWh to 54.9 cents/kWh, a reduction of 31.5%.
  • More stringent land-use and zoning requirements for ground-mounted solar >10kW.
  • Strategies for international expansion and export should be developed to ensure long-term industry survival.

The topic of what these changes may actually mean for the solar industry will be discussed in a subsequent post.

-Erik Janssen

(Engineering Physics, MASc, Year 2 at McMaster University)