Co-op touts garden as solution for stalled solar offers

Thursday, April 5, 2012

by BETTER FARMING STAFF

Ontario’s Energy Minister Chris Bentley likes the take-it-to-the-grid approach taken by AGRIS Solar Co-operative to get farmers with microFIT offers hooked up, even if there is no room on the grid in their neighborhoods.

“I think it’s a novel and useful way to bring together a number of constrained projects,” Bentley said in a phone interview as he traveled to the co-op’s annual general meeting in Chatham.

The ‘novel’ approach applies to farmers who have older micro Feed-In Tariff offers to produce green energy with the Ontario Power Authority (OPA) but are constrained from hooking up because Hydro One doesn’t have room on the grid where they live.  AGRIS Solar’s solution is to take the power to places where there is room on the grid.

Farmers with older, 80-cent per kilowatt-hour microFIT contract offers for solar power join the co-op, an offshoot of AGRIS Co-operative of Chatham. AGRIS then uses the offer in combination with other constrained contract offers to create  “solar gardens” of 500 kilowatts each.
   
The solar gardens become part of the Feed-In Tariff program, which pays eligible larger projects for green energy production. AGRIS Solar leases 10-acre plots of Class 4 or higher land in places in the province where there is room on the grid and they package 50, 10 kW solar trackers on each plot.  Most of the plots leased so far are in eastern Ontario because southern Ontario has very little Class 4 land. Solar gardens can only be built on marginal land, Class 4 or higher.

Where the co-op has leased land, room has been set aside on the grid for the 500 kW projects so they won’t be overtaken by other projects that could pop up in those neighborhoods.

AGRIS Solar general manager Andrew Clark says the co-op originally worked with farmers to construct solar trackers of 10 kW on their farms.  The original plan was that, “every farmer gave $20,000 and a piece of property and from there the co-op took the $20,000, got the debt from Farm Credit Corporation (for the balance of the cost) and we built it on their property and we managed it and maintained it.” The farmers own the co-op and the co-op owns the units, he says.

The trouble with that model was that, “the co-op ended up getting constrained on a bunch of our members’ properties.” That’s what led to the concept of “solar gardens.” While the co-op has 229 units on farms all over Ontario, there are an additional 564 people with contracts who have signed up but are constrained. They will now be part of the solar garden concept.

Clark says the $20,000 initial investment is repaid in four or five years. After that, the farmer can expect to earn an annual return of about $5,000 for the duration of the contract. The entire cost of the trackers, debt servicing, land leases, administration and a contingency for closing down the solar gardens at the end of the contract are factored into the equation. It is not known whether the gardens will produce power for more than 20 years but Clark sees that as a possibility.

The co-op has room to sign up just 500 more members, Clark says. The factor restricting the number of members is money. AGRIS Solar has a $45 million line of credit with the FCC. Once that money is committed, Clark says, they will have to expand the line of credit to add members.

The return for contract holders is calculated based on the original 80 cents per kilowatt-hour the government promised when the plan was introduced.

“It started at 80 cents a kilowatt hour,” Clark says, “and it moved to 64 cents and then it moved again to 44 cents, but these are all older contracts with 80-cent prices.”

Clark believes they will begin building solar gardens this fall after they get Renewable Energy Approval, a process he expects will take three or four months.

Bentley lauds farmers for being enthusiastic supports of green energy in Ontario. “Farmers have embraced it (green energy)” Bentley says. “Wherever you travel in rural Ontario, you see projects and that’s the property of farmers and rural Ontarians.”

According to the Ontario Ministry of Energy, more than 49,000 microFIT applications had been received. The OPA has made more than 26,000 microFIT conditional offers and just over 15,000 microFIT projects are already connected or ready to connect. BF