Archives for the month of: February, 2013

During the Solar Canada 2012 conference held in Toronto, I went to several talks and panel discussions on issues facing the solar industry in Canada.  Given the current energy policies in Ontario, most of the discussion was related to Ontario’s feed-in tariff (FIT) program.  There were many interesting discussions on Ontario’s FIT program, including the financial breakdown of the program, the long-term future, the political and social element of the FIT, but the discussion that I found most intriguing was the panel discussion on Aboriginal-led solar projects in Ontario.

While the original FIT 1.0 program had some provisions to encourage Aboriginal communities to participate in the FIT by offering a higher off-take rate, the FIT 2.0 program has specific set asides and priority points for Aboriginal communities.   Given the limited capacity of the FIT 2.0 program, these priority points and set-asides have led many in the industry eager to partner with Aboriginal communities on solar installations. Before, I get into the potential socioeconomic issues with these partnerships, I want to give a brief overview of the FIT 2.0 provisions for Aboriginal communities.  In the FIT 2.0 program, a total of approximately 1 GW of more FIT contracts will be awarded.  Of this 1 GW, 50 MW or 5%, will be set aside for projects with greater than or equal to 50% Aboriginal equity participation [1].  In addition, in the FIT contract evaluation, 3 additional points will be awarded for projects with a minimum of 15% equity from Aboriginal communities and 2 additional points will be awarded for projects that have Aboriginal community support resolutions [1].  OK… I know that’s a lot to take in and reviewing the changing documentation for the FIT 2.0 program can lead to tunnel vision but the most important point to take from this is that the Ontario Power Authority (OPA) is prioritizing renewable energy generation in Aboriginal communities in a substantial and real way and they are requiring that the Aboriginal communities have a substantial (minimum 15%) equity in these projects.

Before I delve into the potential issues, I want to focus on the positives of developing renewable energy generation in Aboriginal communities.   Since Aboriginal communities are commonly in remote areas of the country, many are not serviced by the electrical grid.   For example, half of all communities in the Nishnawbe Aski Nation do not have access to the grid and thus are forced to rely on diesel generation [2].   This not only has impacts on the environment and quality of life in these communities, but is also a major economic strain with the electricity bill for some houses using electric baseboard heating being as high as $800 to $900 per month during the winter [2].  Establishing local renewable energy generation where the communities have a significant equity share in the project addresses all of these issues as now these communities have a form of electricity generation that has a low impact on the environment and can be a source of income for the community in the future.

While overall I feel that these provisions in the FIT 2.0 program are positive, there are some potential socioeconomic issues that can arise.  For one, with the limited capacity in the FIT 2.0 program, there will be many companies that will be eager to partner up with Aboriginal communities to develop solar projects.  For many of these companies, their interests and methods of conducting business may not be in line with that of the Aboriginal community and there are risks of some Aboriginal communities being exploited for the purposes of establishing a FIT contract.  Furthermore, the timelines and policies established by the OPA for acquiring a FIT contract will likely be more in line with the culture and practices of the partnering company rather than the Aboriginal community.  In fact, during the panel discussion, one member of an Aboriginal community suggested that they are not too concerned about deadlines and timelines in the span of weeks or months because their perspective is to view decisions made in the span of decades and generations.  Another important concern is that while the Aboriginal communities are required to have at least 15% equity in the project, this does not mean they have control over decision making.  This means that (potentially) a partnering company could dictate how and where installations are made.  This of course could have significant negative impacts on these communities and defeat the purpose of the provisions made in the FIT 2.0 program.

Overall, I believe the provisions for Aboriginal communities in the FIT 2.0 program are a positive and necessary step in the right direction but Aboriginal communities and the OPA need to review potential partnerships carefully to ensure the practices and interests of these communities are being considered.

[1]Ontario Power Authority.  Feed-in Tariff Program. Dec 2012; Available from: http://fit.powerauthority.on.ca/what-feed-tariff-program

[2] Faye, D. First Nations want Connection to Ontario Grid. March 2012; Available from:  http://www.northernontariobusiness.com/Industry-News/aboriginal-businesses/First-Nations-want-connections-to-Ontario-grid.aspx

Prat3

Pratish Mahtani

Ph.D. Candidate – 4th Year

Department of Electrical and Computer Engineering

University of Toronto

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This plenary session was comprised of an introductory presentation and a panel discussion. The presentation provided an overview of the Ontario FIT program version 2.0, including the current status of the program, the benefits it offers to the province, as well as some of the challenges it faces. The following heated discussion invited several high level figures to participate. Among them were the current chair of the board of directors of CanSIA, as well as CEOs and technical VPs from several Ontario-based solar companies.

Regarding the future of solar PV generation opportunities in Canada, the introductory presentation pointed out that:

  1. For Canada, most provinces continue to take a cautious approach regarding PV. Part of the reason can be understood by the abundance of other natural electricity resources such as hydro.
  2. In future, some provinces may be able to justify uptake in solar PV generation if solar PV costs move closer to available resource options, and if PV can meet power system needs such as peak demand requirements, operational flexibility, load displacement, etc.

The panel discussion offered some heated debate over the current PV incentive programs, largely from the standpoint view of the policy makers. Here are some highlights from the panel discussion:

1. Currently in Ontario, the demand for PV systems is falling. The industry is facing over supply problems. And cost is going up. The uncertainty of future FIT programs is high. To counter these issues, panelists suggested:

–          Decrease price by improving equipment procurement process.

–          The industry has to try to gain more public support. The message delivered to the public should be more clear and persuasive, e.g. emphasizing solar PV’s role as the “peak shaver”, or benefits from reduction of the power transmission costs (due to the fact that PV power generation is highly distributed and usually geographically close to the end users).

–          Align solar with local needs.

2. There were also debates over the role of government. Someone from the industry described the current status of the PV industry in Ontario as “punching below the weight”.  The discussion then focused on what policy makers could have done better to increase the competitive advantage of solar PV in Ontario. Some comments or suggestions from the discussion:

–          Resources should be invested in the fields where 75% of the technology is happening, instead of investing too much into obsolete technologies such as nuclear power.

–          The incentive programs should be stable and transparent to attract investors. Not much time is left. We only have few opportunities ahead to get it right.

–          The PV industry should “punch together” as a whole, rather than everybody fighting on their own.

In the following Q&A session, the audience expressed disappointment over the various aspects of the Ontario FIT program, including the mismatch between the design of the program and project needs, as well as the CanSIA board election issues. In general, the solar sector in Ontario now seems to be at a crossroad, and this makes it logical to look backward to “fix” existing programs and incentives for PV generation.

Jingfeng's picture

Jingfeng Yang

Post-doctoral Fellow

Department of Engineering Physics, McMaster University

References:

1. http://fit.powerauthority.on.ca/home.html?q=what-feed-tariff-program