Household solar at centre of standard offer debate
My article in today’s Toronto Star focuses on Ontario’s new standard offer program and concern that the way it has been designed so far will make it difficult for solar-equipped households to take part. The program will offer 42 cents per kilowatt hour for any small solar generator of under 10 megawatts to sell electricity into the grid. But the official overseeing the program for the Ontario Power Authority said homeowners who sign up shouldn’t expect it will be a moneymaker, pointing out it could take 20 years for the system to pay off. And that may be excluding the $800 generator licence fee and other expenses for connecting to the grid under current rules.
Ontario’s Ministry of Energy says it’s committed to removing barriers for homeowners, while groups such as the Ontario Sustainable Energy Association (OSEA) and Canadian Solar Industries Association (CanSIA) are trying to get the rules changed so that extra fees and charges reflect the size of a system. For example, homeowners installing 1 or 2 kilowatt systems shouldn’t have to pay the same fees and connection charges that would apply to other projects over 1 megawatt. There’s also considerable controversy over whether the 42 cents per kilowatt earned by homeowners should be taxed as income.
Leonard Allen, president of Solera Sustainable Energies Co., wrote me in an e-mail and said there’s no reason the power authority can’t get it right. “Long-term international experience has shown that costly and cumbersome administration can be eliminated for small systems,” he wrote. “It is simply not appropriate for the homeowner in Ontario to pay an $800 generator license fee — the same as our nuclear power plants! Nor is it necessary to have a hugely expensive megawatt scale hydrometer on a residence. Other world jurisdictions have smartened to the value of home-scale energy contribution and have implemented supportive policy.”
On another note, my article looks at early plans by OSEA to establish a solar co-op called Solarshare that would invest in major solar projects by selling shares to the public in $500 units. I think this is a great idea, because it allows people who can’t install solar on homes — i.e. apartment and condo dwellers, renters and students — to participate in a 20-year standard offer solar contract and receive dividends. The model is flexible because individuals can buy what they can afford, you get better economies of scale, and you can take your shares wherever you live. That is, if you move you don’t have to worry as much about what happens to your $25,000 solar system investment on your house. It’s a great way to expand public participation in the program.
From what I’m hearing, OSEA is struggling to figure out how to make Solarshare work financially. The problem is that, compared to standard offer programs in some European countries, the 42-cent offer in Ontario still doesn’t present a good business case. OSEA is figuring out how it could get added subsidies, say from the Toronto Atmospheric Fund, to make Solarshare work.
Richard Mash at Sunpark Energy Corp. is taking a similar approach for his planned solar park in Guelph, Ontario. But instead of shares, he’s trying to establish his park by letting people and businesses buy $25-per-solar-cell sponsorships, with the heaviest push on corporate sponsorships. People wouldn’t get a dividend but the good feeling of supporting an emission-free solar park that generates electricity for the province.
Here’s another suggestion: Companies such as Spheral Solar (Photowatt) have figured out how to add different colours and even print images on their solar panels. Why not sell corporate sponsorships on standard offer solar farms as a way to further subsidize these projects? A company’s corporate logo could be printed directly on the panel. I also have the perfect site in Toronto — a lengthy strip along the north side of the Gardiner Expressway heading into the city that currently serves as flower-bed advertising for corporations. The site is on a south-facing incline, perfect for solar.
Why not cover the whole area with solar and sell the “real estate” on the panels as corporate advertising? “It’s a great idea,” said Syl Ghirardi, president and CEO of Photowatt, in an e-mail today. He confirmed that Photowatt’s product could suit such a project. “We are thinking for advertising.”