Finally, some clarity on the terms of the microFIT program

Wednesday, October 6, 2010

The Ontario Power Authority's Aug. 13 announcement has resolved the uncertainties about microFIT pricing and its decision to strike a committee of stakeholders bodes well for the future of the program

by RON MACDONALD

For the thousands of farmers who invested hours, effort and money into the microFIT program offered by the Ontario Power Authority (OPA), the past several months have been nerve-wracking.

Those who submitted applications as far back as last February had not yet seen conditional offers come their way and there was no hint of the July 2 announcement that the feed-in tariff for microFIT ground-mounted solar system was being re-evaluated. It was a surprise to applicants that only those who had a contractor or a conditional offer in hand, would receive the 80.2 cents/kWh originally offered. The new proposed offer was 58.8 cents/kWh.

However, on Aug. 13, after extensive consultation with a variety of stakeholders, the OPA announced that it would grandfather all existing applications submitted before noon on July 2 at the original rate and that those applicants would have until May 31,  2011, to request utility connection under the 40 per cent domestic content rule.  The fact that the connection must only be requested and not completed is significant as it is expected that the utilities will be very busy with connection requests and a delay at that point could negatively impact the contract. Now, as long as the connection has been requested, the contract will not be affected.

Applications received by the OPA after the July 2 deadline for ground-mounted solar systems will be offered at the new rate of 64.2 cents/kWh and will have to comply with the 60 per cent domestic content rule as of Jan. 1, 2011.  Roof-mounted systems remain unaffected and will still receive 80.2 cents/kWh.

The OPA also announced that it will strike a committee that will include stakeholders across the province, including the Ontario Federation of Agriculture, so as to ensure fairness and suitability of the program in the future. This is viewed as a very positive step forward to ensure the long-term viability of the program and support for the vibrant solar industry emerging in Ontario.

The economic benefits in terms of new businesses throughout the sector, job creation and expansion of the tax base are just starting to be seen and will form the basis of a sustainable, environmentally responsible industry in the province.

The question of aggregators – that is, businesses that lease land or rooftops for multiple energy projects – was also addressed. It was decided to remove them from the microFIT program and to establish a separate program more suited to their business model. This will be addressed by the newly-formed committee with the intent to ensure that the microFIT program focuses on individuals, farmers, farm co-operatives, First Nations and small businesses, and that a new program tailored to aggregators will continue to encourage their participation in the green energy initiative.

All of this bodes well for the future of the solar industry and for the ability of farmers to make a meaningful contribution to a sustainable green energy base. BF

Ron MacDonald, P.Eng., is an agricultural engineer with Agviro Inc. in Guelph.