Tag Archives: feed-in-tariff program

Liberals re-elected in Ontario: Green Energy Act and feed-in-tariff program live on

Happy to report that the re-election of the Ontario Liberal government last night means the province’s landmark Green Energy Act, which gave birth to the continent’s first comprehensive Euro-style feed-in-tariff program, has survived its first major challenge. The opposition Progressive Conservative party vowed to scrap the FIT program if elected and neuter the green energy legislation that has brought billions of dollars of investment to Ontario, thousands of jobs, and a new economic pathway for a province that needs to reinvent itself for the 21st century.

The election outcome means the admittedly far-from-perfect FIT will remain and the legislation protected, at least for a few years — enough time for these ambitious initiatives to prove their worth to Ontarians. In many ways, the fact Premier Dalton McGuinty’s Liberals were left 1 seat short of a majority government is a good thing, as it forces the government to consider and take seriously some legitimate concerns with how the FIT has rolled out and the lack of attention paid to energy conservation initiatives. The New Democratic Party of Ontario, which won 17 seats, are generally supportive of both the GEA and the FIT, but the fact they hold the balance of power could — and should — nudge the Liberal government to improve its approach.

1. The NDP has been rightly critical of the Liberals for their lack of attention to energy conservation programs, so perhaps now they can light a fire under the Liberals, which have done some important things on conservation but recently have only paid lip-service to it, despite the fact it’s the best and most permanent way — from both a cost and environmental perspective — to create jobs and reduce the province’s dependence on fossil fuels.

2. Expect the NDP to also force the government’s hand on the nuclear file — specifically plans to build two new reactors at the Darlington Nuclear Generating Station. Can we afford it? Does it make sense? Would the money be better spent on deep energy conservation efforts and programs to help low-income Ontarians deal with the energy transition taking place in this province?

3. The NDP’s idea of putting all the power back in the hands of a re-constituted Ontario Hydro is flawed beyond belief, but certainly one can envision a new role for Ontario Power Generation. Why not let OPG develop renewables such as wind, particularly in the far north, in a way that still respects the need for independent power developers and the partly competitive market we currently have? It won’t be easy, but certainly the question should be asked. Letting OPG put some flesh in the game could also change the dialogue with the Power Workers’ Union, which has bashed the McGuinty green energy plan partly — if not mostly — because it threatens the jobs of its unionized workers at coal and nuclear plants.

4. I would hope the Liberals, backed by the NDP, also put pressure on Hydro One, which many believe has purposely dragged its feet when it comes to upgrading transmission and distribution to accommodate green energy projects, in hopes the PCs would win the election last night. Sorry folks — your wish didn’t come true. Time to deliver on what your shareholder has asked you to do. And if Hydro One can’t do it, perhaps the government should consider the idea of permitting merchant lines in Ontario, allowing private-sector transmission developers to enter the game to fill a vacuum left behind by our public utility.

5. Finally, the NDP did seem to emphasize a need to listen to the concerns of municipalities more closely. The Liberals were too dismissive of local concerns when the GEA and FIT were launched, declaring they would have no tolerance for NIMBYism. Well, obviously that wasn’t an issue when it came to natural gas power plant protests, so the Libs have exposed themselves as hypocritical on this file. Some of those protesting wind farms in rural Ontario are extreme, and they will never be pleased. But many have more legitimate and addressable concerns that need to be heard and, when possible and reasonable, acted on. The government needs to show more goodwill in this area, otherwise it will never get the rural buy-in that it desperately needs for Ontario’s green-energy future to remain bright.

Anyway, these are just some of my initial thoughts. Please consider this an open thread. I’m interested in hearing other views out there.


How to create (and destroy) a solar PV export industry, Ontario-style

Been away on vacation and largely unplugged, so apologies for the content dead zone for the past week. Just to get things started again, here is my Clean Break column from last week’s Toronto Star. It takes a look at both the real potential of creating a solar PV export market in Ontario and the many reasons it will now be an uphill struggle. See below:


Tyler Hamilton

Here’s a question I get asked all the time: Can solar modules made in Ontario compete in a global marketplace?

Many have their doubts, and those doubts are grounded in reality. The solar photovoltaic modules coming off Ontario assembly lines today are probably not going to find many customers in Europe or the United States.

The key word being “today.”

But give it two or three years. That’s the answer I get from manufacturers that have set up shop in this province, lured by a generous renewable energy purchase program that pays top dollar for electricity produced from solar panels.

We can get our costs down, they say — just give us the breathing room to do it.

That was the whole point of the province’s feed-in tariff (FIT) program. It was designed to provide above-market incentives for the first few years, after which rates would fall, owing to declining technology costs and manufacturing efficiencies that come from volume production.

Knowing the party won’t last, many Ontario manufacturers would ostensibly work to drive down their costs to where they could sell product in the United States and Europe at a globally competitive price-point.

All of that, however, was based on some assumptions. First, most manufacturers assumed a certain demand. Second, they assumed the Ontario grid could accommodate that demand. And third, they expected the program would survive long enough to follow through on their business plans.

The demand part happened. Ontario’s FIT program has resulted in contract offers for more than 1,300 megawatts of solar, exceeding most market forecasts. For example, Spanish solar-module manufacturer Siliken established a plant in Windsor based on the expectation that there would be a need for 400 megawatts of solar panels annually in Ontario.

But things fall apart after that. The program has been in effect for nearly two years, and so far only 10 megawatts worth of large projects have been built and injecting electrons into the grid, according to the latest figures from the Ontario Power Authority.

This may be a bit confusing. The province boasts the largest solar PV facility in the world in Sarnia, rated at 80 megawatts. How could we have built only 10 megawatts?

It turns out most of the solar development in Ontario over the past two years is the result of an earlier initiative, one that didn’t have domestic content rules. In other words, no manufacturers had to lay roots in Ontario to tap into market demand. That’s why panels for the Sarnia project came from U.S.-based First Solar and were made in Michigan.

The newer FIT program does require some domestic content, which is why we now have 18 solar manufacturers in Ontario. To their frustration, they see big demand for their product but their customers can’t get approval to connect their projects to the grid. No connection means no purchase order.

Manufacturers, for good reason, blame Hydro One for dragging its feet. In the meantime, assembly lines have been shut down and employees have been laid off until projects start flowing. Not the kind of environment in which product costs can be reduced and efficiencies gained.

“We came here thinking we could use the local market to support us while we brought our factories up and wrung efficiencies out of systems, getting us closer to competing against our brothers and sisters in China,” says Milfred Hammerbacher, president of Canadian Solar Solutions, whose parent company operates primarily out of China.

“We thought it would be achievable. But we needed two years to get to that level, and right now we’re just not getting that cushion. In a start-up operation where you have two or three of your lines not being used, there’s no way you can come close to being competitive (globally).”

Canadian Solar is committed to getting through this rough patch, as is Siliken. Many, however, are thinking seriously about packing up their bags and moving back home to their corporate parents.

It doesn’t help that Ontario Progressive Conservative Leader Tim Hudak wants to cancel the program if elected, pulling the rug from under a promising industry that’s already off balance. Thousands of jobs are at risk, as well as an export sector that — despite the spears we keep throwing at it — still has the potential to thrive if we’d let it.

“We set up in Windsor with the intention to serve the northeast of the U.S.,” says Paco Caudet, Siliken’s general manager in Canada. He just sold his flat in Spain. “I plan to stay here.”

It’s a courageous attitude. Still, why do we make it so easy for them to come, then turn around and make it so difficult for them to stay?

Tyler Hamilton, author of Mad Like Tesla, writes weekly about green energy and clean technologies. Contact him at tyler@cleanbreak.ca

Ontario feed-in tariff program: three months, 2,200 applications, and more than 8,000 megawatts

Before I start this post, I want to make one thing clear: an application alone is an expression of interest, not a finished project. With that said, it’s nonetheless encouraging to see the flood of applications come into the Ontario Power Authority’s renewable feed-in-tariff (FIT) program since its Oct. 1 launch. About 80 per cent of The applications, which if all of the projects are built amount to 8,000 megawatts, relate to amount to 80 per cent wind-energy capacity, while 16 per cent of total megawatts are for solar capacity and the rest a combination of biogas/biomass and small hydroelectric. Of the nearly 2,200 applications received, roughly 1,200 are for projects less than 10 kilowatts in size, mostly rooftop solar. Already, 700 of those applications have been approved. (See power authority backgrounder here).

This is a great start for a province that has only peaked above 27,000 megawatts in its history. And these results exclude the huge potential for large offshore wind projects in Lake Ontario and Lake Erie, as well as some larger hydroelectric and pumped storage projects. Again, it’s easy to flag these applications and shout victory, but the hard work is ahead — getting these projects built and generating power for the grid, as well as getting the transmission built to accommodate them. At the moment, there’s only enough transmission capacity to accept about 2,500 megawatts, so shovel-ready projects in capacity-spare areas are being given top priority. If, however, we can get a majority of these projects online within the next few years that will be a major accomplishment as Ontario works toward its goal of phasing out coal power by 2014.