Tag Archives: feed-in tariff

Ontario solar installations to surpass 600 MW in 2012: iSuppi

Ontario’s solar market is boomin’ baby.

California-based market research firm iSuppli came out with a report today that forecasts rapid growth of solar PV installations in Ontario, though warns of a bottleneck in production during the first half of 2011 as developers struggle to meet stricter local content requirements. In 2009 Ontari0 had 69 MW of installed PV, but iSuppli said that will grow by 272.5 per cent to 257 MW in 2010. Stricter rules requiring 60 per cent local content will kick in next year, however, and that will create a supply crunch that slows down growth until the last quarter of 2011 when local manufacturing catches up with demand. As a result, we’ll see growth of 75.5 per cent in 2011 as installations climb to 451 MW. In 2012 we’ll see that number climb past 600 MW.

Mike Sheppard, a PV analyst with iSuppli and author of the report, says companies that have set up local manufacturing in Ontario will benefit the most during the 2011 crunch. According to an iSuppli press brief, “Firms like Canadian Solar, SMA, Fronius and Silfab are stepping in to meet the demand for local solar components, building module and inverter manufacturing facilities in Ontario.”

Sheppard acknowledged that Ontario’s decision to shut down all coal plants by 2014 and its introduction of a Green Energy Act and feed-in-tariff program are driving the explosive growth in PV. He called Ontario’s FIT program “North America’s first comprehensive guaranteed pricing structure for electricity production from renewable fuels sources including solar PV, bio-energy waterpower and wind.” The program, according to iSuppli, “could have a major influence throughout North America.”

This is a positive evaluation, but I don’t think it’s as positive as it could be. As I outlined earlier, module manufacturers alone are setting up local production facilities with a combined annual capacity of more than 1,000 MW. Not all will be built, but iSuppli seems to think that actual installations will be limited to between 150 and 200 MW a year. If that ends up the case, we could end up having some major oversupply issues in Ontario by the end of 2011. But given the huge volume of FIT applications being received by the Ontario Power Authority and amounting to potentially several thousand megawatts, I’m wondering if iSuppli is low-balling its forecast.

Ontario goverment, power authority try to make good on controversial tariff reduction proposed for ground-mount PV solar projects

The Ontario government and its energy planner, the Ontario Power Authority, sparked a big firestorm after announcing last month that they wanted to reduce the feed-in-tariff rate for small ground-mount solar PV projects to 58.8 cents per kilowatt-hour from a very rich 80.2 cents. The move caught many off-guard, and while there was a lot of grunting about the reduced rate, most were unhappy with the sudden and arbitrary nature of the announcement, which undermined the business plans of many companies that were participating in the program in good faith. Bottom line: it undermined confidence in the entire program, even though from a megawatts perspective it only dealt with a tiny portion of green power.

After a brief consultation period it seems the government and Ontario Power Authority took the industry’s complaints to heart, even though my own sources told me just recently that the government was being pig-headed and planned to stick with its proposal. In the end, they caved in to pressure — a very smart face-saving move, I might add. The price reduction will still take place, but it will be reduced to 64.2 cents, not 58.8 cents, and it won’t apply to anyone who applied to the program before July 2, 2010, meaning the OPA plans to honour the original 80.2 cents for those who meet that cutoff. This decision is a big gesture, because the plan under the original proposal was to only honour the 80.2 cents for those minority of projects that had already received a contract or conditional offer. That means the more than 10,000 applications that were going to be tossed out (with project proponents forced to reapply under the new rate) will now be honoured at the 80.2 cent rate so long as they applied before July 2.

There’s a small catch, however. Commercial aggregators will no longer be allowed to participate in the microFIT program, but will still be able to participate in the larger FIT (10 kilowatts and up) program. The government didn’t like the idea of aggregators merely leasing rooftops and then building and owning the systems, saying it defied the spirit of the program, which was to get households, farmers, communities, First Nations, etc… to participate directly on their own. I have to say, I *completely* agree with them there.

The OPA also announced it will be establishing a new advisory panel that will provide advice on program evolution, including the two-year FIT review process. The advisory panel will be made up of industry, academic and other stakeholders. I should point out that an attempt will be made to accommodate commercial aggregators of smaller projects, but it will be done outside of the microFIT program using a different set of rules to be established partly by the new advisory panel.

“The OPA has received almost 19,000 microFIT applications since the program was launched less than a year ago. More than 6,100 conditional offers have been sent to applicants and almost 800 microFIT projects are now feeding clean energy into Ontario’s grid,” according to the agency’s release today. “The OPA is working to respond quickly to microFIT applicants. Most ground-mounted applications that have been submitted will be processed by the end of September.”

Kudos to the government and OPA for putting meaning back into the word “consultation.” Showing a willingness to listen and change direction restores confidence in the process and the program, and the fact an advisory body has been set up to avoid future surprises can only help.

TD Bank says “us too” on green energy financing

Just a week after CIBC said it was forming an investment team at the bank to explore all aspect of green energy and clean technology financing, TD Bank is saying: us, too!

Now, I predicted the CIBC announcement would encourage other major Canadian banks to follow, but TD’s effort is rather half-hearted. The company put out a press release yesterday pointing out that its lending businesses are financing a number of green energy projects approved under Ontario’s feed-in-tariff program. “Small business owners, schools, retailers, agricultural businesses, solar panel manufacturers and installers, utilities, and others are encouraged to talk to TD about their financing requirements for solar power and other renewable energy systems,” the bank said in a statement.

TD is focusing here on the microFIT — that is, projects under 10 kilowatts — so this is an appeal to small business specifically. There’s no indication yet whether TD is prepared to tackle financing for larger projects in a coordinated, targeted fashion. And even with this release, all the company is saying is “come talk to us, we’ll listen.” The first sign this is a half-hearted effort is that TD offers up a quote from its chief environmental officer, Karen Clarke-Whistler. A senior executive, yes, but a person you’d expect to weigh in. What I’d like to see is the president, chief operating officer, etc… somebody at the very top that’s signalling the bank’s commitment to this area. I’d also like to see a sign that TD is preparing to develop a group or team or whatever that’s focused on the opporunities — both small and large.

TD is going to have to do better than this.

Ontario approves a motherload of green energy projects: 2,500 MW of capacity

The Ontario Power Authority, which designed and is in charge of administering the province’s feed-in-tariff program, announced micro and small/medium sized FIT contracts earlier this year totalling 112 megawatts. Today, it issued the big one: the awarding of 184 contracts for projects larger than 500 kilowatts. In total, and assuming all projects get developed, this works out to 2,421 MW of green-energy capacity.

Ground-mounted solar represented 76 of the projects and amount to more than 600 megawatts. Northland Power, a company normally associated with building natural gas plants, has 13 solar projects totalling 130 MW. Onshore wind projects number 47 and waterpower projects number 46. The Ontario government called this the “single-largest green energy initiative of its kind in Canada,” while environmental and pro-green industry groups called the contract approvals historic. No doubt, criticism will follow from the usual suspects who continue to crap on any green-energy programs.

Significantly, 264 MW worth of projects have been identified as “community power”: projects developed, owned and operated by Ontario landowners and groups comprised of First Nations and energy co-ops — in other words, not by corporations.

The province said this latest round of projects will create 20,000 direct and indirect jobs, though I’ve always found it a mystery how they come to those numbers and take them with a grain of salt. It also estimated it will result in $9 billion in private investment, a figure that’s boosted by local content requirements.

The big surprise: a contract was issued for a 300 megawatt offshore wind project in Lake Ontario, near Kingston’s Wolfe Island. It’s sure to be a controverial project, but it represents the first time *in the world* that a power-purchase contract has been granted to an offshore wind project in the Great Lakes. It’s also the largest single approved project under this entire FIT round. Click here for a breakdown of the 184 projects.

The company behind the Wolfe Island Shoals Windfarm is a company called Windstream Energy. Don’t know much about them, but they’ve got their work cut out. They would have had to put up more than $3 million in security deposits to participate in the FIT, so I’m assuming they’ve got lots of wind data and have done the necessary studies (bird, bat, etc…) to move the project forward. But even so, they’re going to face the wrath of an angry Wolfe Island residents association, which is having a hard enough time accepting the onshore turbines there. “If they’re directly in front of Wolfe Island it’s going to be a firestorm,” said one industry observer. Got that right.

More to come later…

Ontario’s coming carbonomics controversy

I had a feature this weekend in the Toronto Star about the cap-and-trade system coming to Ontario and the likelihood an offsets market will be created a year or more before the 2012 launch of the program. The government here is working hard to align our own provincial system with the Western Climate Initiative, in which it is a member, as well as the Waxman-Markey bill under consideration in the United States (which will likely set the North American standard). The idea of allowing a carbon offsets market to emerge in advance of the cap-and-trade launch is a smart one, as it gives industry a way to prepare and it stimulates offset project development before the final cap-and-trade rules go into effect.

But here’s the problem: A good portion of offset projects are also electricity generation projects, such as wind, solar, biogas and hydroelectric. But in Ontario, if you want to sell your electricity to the power authority you sign a 20-year deal under a new feed-in tariff program. The tariffs are generous, but most developers are also hoping to keep the carbon credits they would qualify for so they can be sold as offsets.

Unfortunately for them, the Ontario Power Authority’s contract for power purchases stipulates that it — and by “it” I mean the Ontario government, which is ultimately the Ontario ratepayer — gets to keep all environmental attributes. This raises a number of issues: Continue reading Ontario’s coming carbonomics controversy