OPA delays review results; rural solar installer suffers

Tuesday, February 28, 2012

by DAVE PINK

Frustration is growing in rural Ontario over the continuing delay by Ontario Power Authority in announcing the new rates that will be paid under the province’s Feed-In Tariff (FIT) and microFIT programs, says a Guelph-based installer of solar generators.

The expansion of the program that has seen solar panels installed on farms throughout Ontario was brought to a halt on Nov. 1, 2011, when the authority announced its rate review. All applications  –retroactive to Sept. 1– were immediately put on hold. And those applicants are still waiting.

Doug Prest, the owner of Solar G Climate Change Solutions, says  the authority’s delay has had a chilling effect on Ontario’s fledgling solar industry.  Up until the freeze, 60 per cent of his business was with farmers, he says.  Now, the company has almost finished work on the contracts approved before Aug. 31 and has become increasingly dependent on smaller scale installations in urban areas.

“A lot of farmers were interested in solar installations. Farmers are interested in anything that will allow their land to generate revenue, and we were focusing on them,” says Prest.

Now, until the new rates are revealed, there’s no point in even talking about solar installations.  “Because these people don’t know what the rates are going to be, they can’t go ahead. They can’t do any return on investment calculations, so we are unable to do business,” he says.

The FIT program was introduced in 2009 and the authority now pays 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. Those rates will almost certainly be cut drastically – but that’s OK, says Prest. Higher rates were needed at the inception of the program to entice property owners into the heavy investment then needed to generate solar power. But things have changed, and the technology has become much more affordable.

“We can install systems now probably at about one-third of what they cost three years ago,” he says. A rooftop system that will generate 10 kilowatts – the maximum allowed under the province’s microFIT program – will probably cost between $50,000 and $55,000. “But you can make $10,000 a year, and that’s a very good rate of return,” says Prest.

The province, he says, will be encouraging more rooftop installations atop barns and other buildings so that the solar collectors won’t use up too much productive land.

Tim Butters, a spokesperson for the OPA, says that the rate review was concluded on Dec. 14, and that the new rates would be made public very soon on the OPA’s website. In all, he says, about 11,000 solar installations have been completed in Ontario under the microFIT program.

“The solar industry took a one-two-three punch last year,” says Prest. First came a decision from Hydro One, which operates the province’s power transmission system, to limit input from private generation systems to seven per cent of the peak electrical load – a decision Prest says is hard to understand.

Hydro One technicians now determine who can and cannot feed power into the system based on where in the province the solar generator is located, confirmed Tizziana Baccega, spokesperson for Hydro One.  

“I should think the goal would be to have 100 per cent generated by renewable sources,” says Prest.

The Hydro One policy also scuttled Prest’s plans to install a solar panel on his own Fergus-area farm, where he raises chickens and turkeys.

Prest adds that last October’s Ontario election, and in particular a plan by Progressive Conservative Leader Tim Hudak to scrap some aspects of the renewable energy generation program, made the industry hold its breath.

And then came the OPA review.

“The supply chain is starting to break down,” says Prest, adding that it’s become increasingly difficult to find suppliers.

“It’s been tough, but that’s life on the leading edge,” he says. “It’s a new industry and we’re in a transition from fossil fuels to renewable energy, and when you’re going through a transition it’s always tough.”

The Ontario government has been more progressive than any other in North America, “but they haven’t got it right yet.” BF