Ontario farmers take to solar power big-time

Monday, February 28, 2011

Of 16,000 applications received by Ontario Power Authority by July 2010, close to 14,500 were from farmers. It's a perfect fit for them, says one installer

by MIKE MULHERN

Feed-in tariff (FIT) programs have been around since 1978, when then U.S. President Jimmy Carter implemented a FIT program because of a perceived energy crisis and concerns over pollution.

But, while Carter may have been first, it was the Germans who got it right, at least on the second pass. Their first law was enacted in 1990, then amended in 2000, and that was the beginning of effective FIT programs, including Ontario's which looks very much like the German one. Another thing we have in common with Germany is that the most enthusiastic participants are farmers.

Tom Kreutzer and Christian Wentzel came from Germany in January 2010 specifically to work in the solar industry here. They are part of a company called Ontario Solar Provider Inc. Their focus is on large, rooftop systems and the majority of their clients are farmers.
"We have put solar panels on every single available rooftop between our two farms (in East Germany)," Christian said. Their focus here is on systems 50 kilowatts and higher, although they have also done some microFIT systems of 10 kW.

In Germany, Tom became involved with solar in 2003 and Christian in 2005, and their experience is that things take a while to sort themselves out. "Here, it's all new for the hydro company and for the customer, so the process needs to settle a little bit," Christian says. "I feel already the process is going faster," Tom adds. "Last year, it took four months to get hooked up. Our last one was done in three weeks. Even if it takes six weeks, things are getting better and better."

While hookup times are mentioned by installers as a problem, there are other concerns, too, including the structural integrity of farm buildings being considered for rooftop solar. "You have to make an assessment," says Christian. In about 50 per cent of the times, either roof trusses have to be reinforced or the layout has to be changed. They estimate roof upgrades cost about $200 a kilowatt.

"If there is an issue on the structural side," Christian says, "we factor this into the business plan and the economics of the overall project. We don't want customers to have any big surprises."

Tom and Christian like the economics of larger solar projects, but they also believe in adding extra solar panels to make their roof projects more efficient. For a 10-kW project, they would typically recommend 12 kilowatts worth of panels with a 10-kW inverter, so that you never send more than is allowable to the grid but you get maximum efficiency out of your roof acreage.

"The sun is not always in the perfect spot all the time," Christian says. "Winter mornings and afternoons we have it producing at 60 to 70 per cent, but we still want to capture the remainder so, overall, more value is created for everyone involved if we oversize it a little bit."

They feel the same about rooftops. Use what you have. In farming, if you have 100 acres, they say, you wouldn't plant just 10.

They estimate costs at about $5.50 to $6 a watt, so a 100 kW system will cost between $550,000 and $600,000, a lot of money but a lot of return over the 20-year life of the contract. A 10kw system, they say, returns about $12,000 a year while a 100-kw system returns about $100,000 a year. At the moment, Ontario pays 80.2 cents a kW for microFIT rooftop systems of 10 kW or less and 71.3 cents a kW for FIT systems between 10 and 250 kW.

Installers say large lenders have been slow to back solar projects, with the exception of Farm Credit Canada, which is rated as good. "The larger commercial banks are not as fast," Christian said. "We've seen the same thing in Germany, where farming banks have grown to be large banks which financed renewable energy."

In 2010, Tom and Christian say, 60 per cent of all farming investment in Germany, including farm equipment, was in solar power. The return for farmers there started out at 57 Euro cents a kW hour, but the formula reduces it every year so people who get in now get just 28 Euro cents, still enough to make a return but not as quickly. Euro cents are currently more than 25 per cent higher than their Canadian equivalent.

One of Ontario's most prolific solar installers is Ethosolar, owned by Ken Rounds and his family. Rounds, who farms near Wasaga Beach, has started 250 microFIT projects across Ontario with about 180 complete. He says Hydro One hookup times can be long in some parts of the province and timely in others. Part of the problem, he believes, is that planners didn't expect farmers to adopt solar the way they have.

"When the government announced the Green Energy Act," he says, "all their estimations, all their calculations of how many houses and how much production and how many applications . . . everything were related to the urban dweller and I don't think they recognized that agriculture would be a major part of it."

Rounds believes solar is perfect for farmers. "Farmers are used to long-term investments," he said. "They are used to putting money into tile drainage, so investing in something like this with a 20-year window makes sense. Farmers are not going to move, while city people might move house to house." The reality, Rounds says, is that acceptance in the farming community has put most of the hookup pressure on Hydro One.

Of 16,000 applications received by Ontario Power Authority by July 2010, close to 14,500 were from farmers, Rounds says, adding that about 90 per cent of those farmers would be Hydro One customers.

"If the Green Energy Act had gone the way most people expected," Rounds says, "there would be an even spattering of Toronto Hydro, Barrie Hydro, Innesfield Hydro. You would have had the local distribution companies around the province involved, and not everything would have fallen so heavily on Hydro One."

Rounds and his family got into solar in 2009 on their own farm. When they moved into the business of installing systems, they made contacts through people Ken knew in the fertilizer business. Dealers hosted farm meetings and Rounds told farmers about the opportunities solar offered in Ontario.

His experience right across the province is that "if you're hooking up a normal system and your transformer is good, you will probably be hooked up in a reasonable amount of time." If you need a transformer or an upgrade, the wait could be longer.

Rounds and others also note that larger projects take longer. They have five FIT projects – 250, 200, 150, 75 and 50 kW respectively – on the drawing board, but none is complete.

"We had approval on all of them in June 2010 from the Ontario Power Authority. The next step, of course, is to get a Connection Impact Assessment (CIA) with Hydro One. It's supposed to take 60 days, but now their applications are taking three or four months to do."

When a farmer is building a FIT project, Rounds says, he wants to be going for allocation capacity exempt status.

Projects meeting this definition generally produce no more than 250 kilowatts of rated generating capacity where the facility is connected to a less than 15 kV line, or they are projects of 500 kW or less of rated generating capacity where the facility is connected to a 15 kV or greater line.

"Once you go over," Rounds says, "you may have to go through two studies with Hydro One. One is a Transmission Availability Test (TAT), another is a Distribution Availability Test (DAT), and those studies can take up to six months. If they find there is not enough capacity on the line, then the owner of the property will have to pay for upgrades in the distribution system."

The bottom line? "Keep your project below what is required to trigger the TAT and DAT test. If you have a single-phase line in front of your farm of less than 13,000 volts, you can go up to 100 kW to be allocation-exempt. If your single-phase line is greater than 13,000 volts, you can build a 150 kW project. If you have three-phase power less than 44,000 volts, you can build up to 250 kW.

Steve Gerber of Gerber Electric in Glencoe says he has a 75 kW project slated for a chicken farm. "The issue that I'm finding with these bigger systems is the paperwork and engineering. It's almost a full year and I haven't even started construction yet."

Rounds says that's not surprising. "If farmers are planning on doing a FIT project," he says, "you want to plan on about a year as your application process. If you put in an application Feb. 1, 2011, at the rate we're going now you probably wouldn't get your approvals all finished until one year down the road." BF

Facts about FIT

As of Jan. 21, 2011, Ontario Power Authority had received 24,773 microFIT applications. It had made 19,016 conditional offers and 3,055 contracts had been executed.
A microFIT project is 10 kilowatts or less. A FIT project is greater than 10 kilowatts. Here are the rates Ontario Power Authority offered as of Aug. 13, 2010:

• 80.2 cents a kWh for rooftop microFIT projects;
• 71.3 cents per kWh for roof projects from 10 to 250 kW;
• 63.5 cents per kWh for rooftop projects 250 to 500 kW;
• 53.9 cents per kWh for rooftop projects greater than 500 kW.

Ground-mounted microFIT projects earn 64.2 cents per kWh; larger ground-mounted ones earn 44.3 cents per kWh. Contracts are for 20 years. BF