Co-op says solar rate changes will sink it

Tuesday, July 6, 2010

by BETTER FARMING STAFF

A Chatham solar power co-operative venture will likely collapse if the Ontario Power Authority adopts proposed changes in power generation payment rates for its micro feed-in-tariff program, says a co-operative spokesman.

“From what we know today, we can’t build ground mounted installations at the rate being proposed,” says Jim Campbell, secretary of Agris Solar Co-op.

The co-operative partnered with Spark Solar to pool panel earnings under the microFIT program and offers members a share of the annual surplus in exchange for a $20,000 investment. According to the co-operative’s website, it has 650 members. Most are farmers.

Introduced late last year, the microFIT program offered 20-year contracts to homeowners, farmers, small businesses and institutions to buy power at 80.2 cents per kilowatt-hour from solar units generating 10 kilowatts or less. Last week, the province and the power authority announced a proposal to change the fee to 58.8 cents per kWh for ground-mounted solar systems. The original rate will still apply to roof top solar systems.

Brad Duguid, provincial minister of energy and infrastructure, says the change in price corrects a loophole within the program for applicants to earn an “exorbitant” return on their investment.

The authority and the province are seeking industry comment about the proposal this month.

“The suggestion from Ontario Power Authority that farm families are going to receive an unreasonable return on their investment by investing in ground-mounted solar is just not consistent with the actual returns we see in our co-operative model,” says Campbell. “We are hopeful the government didn’t really intend to adversely affect farm families who are buying into this program.”

Campbell says the co-operative’s numbers do not support Duguid’s contentions that capital costs are “fundamentally lower” for ground-mounted solar units compared to roof top units. He says the returns the co-operative would receive on individual units are the same as what farmers would receive on their own. The gain in buying power for the group is offset by “administrative costs,” he says.

Campbell says he has received calls “all day long” from members who wonder how the rules can change after applications are filed. He says the co-operative does not object to the rates eventually going down as long as the change is planned for and happens over time.

He says the co-operative will participate in the province’s consultation sessions. “Maybe the government has information on capital costs that is different from what we understand them to be today,” he says. “We may learn something.” BF