To the OPA ”

I have some feedback and suggestions on the Domestic content rules. I have also written into my MPP and cc’d the Energy ministry .

The current Domestic Content rules as stated are a real impediment to a successful launch of this program and creation of Green Jobs in Ontario. I will focus my feedback on the microFIT for Solar PV.

A) Initial requirement to meet 40% Domestic Content.

Issues
1) There is presently only 46% content available to achieve the 40% based on the current available sources of PV modules and Inverters. The 9% for mounting systems is even an issue if they are part of the Solar Panel package

Solutions
1) Make items 4 and 5 add up to 40 % for the initial requirement so that projects are not limited by the currently available sources of materials. This will give time for more Ontario based sources to come online. Part of my rational is that the government’s stated intention is to create “Green Jobs” and most of the jobs will be created in the installation and overhead part of the supply chain. The rules should not serve to artificially limit the investment or end customer sales.

B) Requirement to meet 60%. Domestic content by Jan 2011

Issues
1) There is not enough time available for companies to meet Ontario Domestics content.. New factories would need to come online with-in the next 12 months to ensure adequate supply.
2) When sources are limited, it will reduce competition and invariably increase prices of components.
3) The definition of item #1 (Solar PV Modules) is too narrow and I believe not achievable within the stated time frame. This could lead to a gap in the program whereby projects coming online in 2011 could not meet the domestic content rules.

Solutions
1) Extend deadlines by 12 months or more to meet 60%, or
2) Redefine “Designated Activity #1″ . It is not realistic for Ontario to expect that solar cell production can come on line in 12 months. This requires a huge capital investment and planning time. More realistic is to request that Solar Panels, rather than the Solar Cells be assembled in Ontario. To this end there is already precedents in the industry where Solar panel manufactures have set-up shop in the regions that are consuming the panels. There has also been in the industry, outsourcing of the Solar Panel assembly by the OEM’s to Contract Manufactures. Ontario has several contract manufactures with facilities in the province of Ontario that could start-up production with-in 12 months. This would bring much needed work to this industry.
3) The qualifying percentages for “Designated Activity #1″ can be revised so that a portion is given to assembly and a portion to the solar cell content.

Joe Ragno, P. Eng