Green energy rate changes a 'natural progression' says association

Thursday, March 22, 2012

by DAVE PINK

A 20 per cent reduction in the rate paid to Ontario’s solar energy producers is a “positive and natural progression” for the provincial government’s Feed-in Tariff (FIT) program, says the Ontario Sustainable Energy Association (OSEA).

The long-awaited rate change — which was expected to be in the 25 per cent range — was announced by the Ministry of Energy today.
 
“We all recognize that the price needs to go down, because the cost of installing and operating the systems has gone done,” says Stevens. “The whole premise of the program is based on cost with a reasonable return on investment.”

With that in mind, he says, existing and newly built solar power systems still make economic sense, and rural landowners aren’t likely to be discouraged from keeping them and building new ones. And with a guaranteed return on investment, he’s hopeful that more rural and urban community groups will be encouraged to develop solar energy projects.

"The Government's re-engagement and willingness to improve the program is both very important and timely. This renewed commitment will further strengthen Ontario's leadership role in renewable energy," Stevens said in a release following the announcement.

The ministry, through the Ontario Power Authority, under the microFIT program, had been paying 64.2 cents per kilowatt-hour to the owners of ground-mounted solar collectors, after a downward revision in 2010, and 80.2 cents per kw/h to those with rooftop collectors.

A reappraisal of the rates was announced in November, and this announcement had been anticipated for several weeks, says Doug Prest, the owner of Solar G Climate Change Solutions, a Guelph-based installer of the systems. He says business has ground to a halt while potential customers waited to see the new rates before committing to a purchase.

“The rates are appropriate. It’s good news,” Prest said today.

But Jon Leckowicz, of the Dundas-based Farmers For Economic Opportunity, was sceptical of any advantages  to a downward rate change. “It’s unfortunate. It’s not good politics. I don’t think it will be good for the farmers,” he said. “Now it’s up to the suppliers to lower their costs.”

But, “if the rate of return is maintained then it should be OK,” he said.

Sean Kelly, the director of member services and government relations for Sparks Solar in Oakville, said the decrease is “justified,” considering that the capital costs of the solar systems have dropped sharply. Sparks Solar is the management company hired to look after the solar projects for Chatham-based Agris Co-operatives.

More  significant, says Kelly, is a change in the direction of the program that will allow community groups and co-ops to become more involved in the solar systems, in both rural and urban areas.

The Canadian Wind Energy Association, meanwhile, said the new rate of 11.5 cents per kWh to be paid for wind-generated electricity could discourage new investment. The program currently pays 13.5 cents per kWh for on-shore projects of any size.

“Wind energy is a cost-competitive source of energy for Ontario,” CanWEA president Robert Hornung said in a Thursday news release. “We believe that this new price will prove extremely challenging for many projects and could prevent a number of them from proceeding. This is particularly true for smaller projects and new entrants to the industry, reducing the number of communities and the diversity of players able to contribute to and benefit from the government’s ambitious objectives.”

But, CanWEA said it strongly supports the government’s stated objective to expand its sustainable energy program.

A Ministry of Energy release on Thursday said that there are currently 2,000 small- and large-scale sustainable energy contracts  in place, with producers generating 4,600 megawatts of electricity — enough to power 1.2 million homes — with projects that would generate another 2,900 megawatts  currently moving through the approval process. The ministry’s objective is to bring sustainable energy generation to 10,700 megawatts by 2015.

The ministry said the FIT program has created 20,000 jobs, and has an overall goal of creating 50,000.

Stevens said all aspects of sustainable energy are evolving as expected with the high start-up costs seen in any other industry. “We’re in the early stages of this, and not everybody sees how this is all going to play out. But we are going through significant change.”

He said an obvious comparison can be made with the development of the internet, and that in its early days most people could not see its potential.

Stevens, an advocate for all forms of renewable energy, says he’s encouraged that as the cost of solar and wind energy fall they appear to be a bigger bargain than the reconstruction of the Darlington nuclear power plant. He says the long-term energy plan for the province foresees about 50 per cent of our electricity coming from nuclear generators, but the rapid advance of wind, solar and other renewable, along with increased conservation, is likely to change that way of thinking.

 “If we can do something for less then why wouldn’t we?” he asks. BF