Proposed changes to Ontario’s feed-in tariff (FIT) program could leave some of the province’s farmers in the dust. On July 2, Ontario’s Minister of Energy and Infrastructure, Brad Duguid, announced that the lucrative prices the program offers for electricity generated by small, ground-mounted solar installations may be reduced from 80.2 cents per kilowatt hour to 58.8 cents.
The FIT program began accepting applications for green energy projects in May of 2009. The response was overwhelming, with the Ontario Power Authority (OPA) receiving more than 15,000 applications in less than a year and a half. Most applications were for ground-mounted solar systems less than 10 kW, which fall into the microFIT category. According to Duguid, the province has to scale back its pricing scheme in order to avoid footing the $1 billion required to cover the projects’ 25% rate of return over the next twenty years.
Rural Residents Lose Trust in the System
Agricultural land is prime real estate for green energy installations, and many farmers have installed or planned to install ground-mounted systems on their property. One such farmer is Ed Kloosterman, who, with his wife, Alma, had applied for microFIT contracts to build 10kW of solar installations on four rural properties near Peterborough. While the Kloostermans understand the province’s rationale for the price changes, Ed asserts that a lot of trouble could have been avoided if the government had more carefully worked out the economics of the arrangement beforehand.
Mark Banner, president of Diverse Green Solutions, Ltd., and vendor for solar company Omniwatt, says that while the price changes are a setback, they do not spell the end of Ontario’s solar industry. At 58.8 cents per kilowatt hour, there is still a profit to be made from the technology and the microFIT. What remains a problem, as Wendy Omvlee of the Ontario Federation of Agriculture points out, is loss of trust in the program. While Ontario’s FIT continues to offer high prices for green energy, the province will have to work to restore the faith of businesses, homeowners, and rural land owners, and to assure potential applicants that in the future, they can rely on the OPA to stand behind its offers.