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By Tyler Hamilton

Ontario’s new Energy Minister Chris Bentley has much to learn over the coming weeks about the province’s complex energy file, and hopefully with that learning will come some genuine listening.

It’s tempting to think that the Liberal win earlier this month was a vote of confidence in the government’s green energy strategy, warts and all.

But one could just as easily argue that the outcome of the election would have been very different if PC party leader Tim Hudak hadn’t taken such an extremely negative position against the Green Energy Act, the feed-in tariff (FIT) program and associated initiatives.

Voters, by and large, are supportive – and many quite proud – of Ontario’s green energy vision. They see that it’s the direction we must take. They also see economic opportunity by heading in that direction, if done properly. For this reason, it appears most voters weren’t prepared to let Hudak hit stop and press the rewind button.

At the same time, the fact that the Liberals only squeaked ahead in the popular vote seems a clear message that the approach behind the vision needs some fixing – and fast.

For one, the ball has been dropped on energy conservation. We know that the cost of programs that help us reduce energy consumption is much less than building new power supply. We know that investment in energy efficiency has a much faster payback, represents a permanent reduction in carbon emissions, and is a significant job creator.

We also know that widespread support for energy conservation is the best way to help ratepayers cope with rising electricity rates. After all, who cares if the rate goes up if the monthly bill stays the same?

Yes, the smart grid will help us take control of our energy use, and smart meters can encourage us to shift when we use electricity. All of this helps, but it doesn’t encourage us to use less electricity. It’s not true conservation. And trust me, we waste a lot of energy. There’s much to conserve.

The Liberals have also paid a lot of lip-service to helping seniors and those on fixed-income cope with rising energy bills, but what’s lacking is meaningful action. The Clean Energy Benefit temporarily slapped on everyone’s bills is not an answer, nor is an end-of-year tax credit on a bill that’s paid monthly.

Another fix is needed with the FIT program itself. The rate structure is terribly out of date, and the Ontario Power Authority is already late in launching its two-year review of rates paid out for solar, wind, small hydro and biomass projects.

The rates under the FIT program were first announced in early 2009 and designed to assure a “reasonable” return on investment – about 11 or 12 per cent—for developers. The problem is that technology costs shift over time, sometimes dramatically. Solar is a case in point.

A recent report from the U.S. Department of Energy’s Lawrence Berkeley National Laboratory concluded that the average pre-incentive cost of residential and commercial solar PV systems fell 17 per cent last year and a further 11 per cent in the first half of 2011.

“Solar cell prices around the world have gone down significantly,” Paco Caudet, general manager of solar module maker Siliken Canada, told me this summer. “We have brought down costs over the last five months alone by almost 30 per cent.”

You hear the same story over at Celestica, which is manufacturing solar panels and inverters in Ontario for other companies looking to comply with local content rules.

Mike Andrade, the company’s senior vice-president, echoed Caudet’s view. He said the original solar FIT rates were based on a price for panels and inverters that is now 30 to 40 per cent lower. “Developers can make a fine return on investment at a much lower FIT rate than we have now,” he said.

Yet we continue to wait for rate adjustments. In retrospect, the two-year review was a mistake. Rate structure reviews should be done annually so the program can more quickly adapt to a changing marketplace.

We might also want to ask: should developers of multi-megawatt solar projects and large wind farms be booted out of the FIT program entirely?

After all, the program was created so community cooperatives, small businesses, farmers and homeowners could participate more easily in an electricity system previously dominated by the big developers, who were the only ones with the resources to take part in a competitive bidding process.

The level of community participation hoped for just hasn’t happened under the FIT, and this may explain why the McGuinty government had such a poor showing in rural Ontario ridings. People in many of these ridings are feeling like big projects are being imposed on them and that they have little say in the process.

European studies show that there is less resistance to projects when those in the community feel they have part ownership and a voice that will be heard. The FIT needs to move in that direction.

Not to say we still won’t need the big projects. But developers of these should be required to bid against each other so that Ontario ratepayers are assured the best deal.

And that, in a nutshell, is the problem we have so far: a great green vision, but not necessarily the best deal.

There’s much room for improvement, but first the government has to recognize the need.

Tyler Hamilton, author of Mad Like Tesla, writes weekly about green energy and clean technologies.

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.

The following post comes from Tom Rand (PEng, PhD), director of VCi Green Funds and author of Kick the Fossil Fuel Habit.

Have we built an economy that’s running rapidly toward ecological collapse? Yep. Has any major party wholeheartedly embraced the sorts of carbon reductions required to avoid that collapse? Um, nope. Does the economy require a wholesale reconfiguration in order to be able to embrace long-term sustainability? You betcha! Does the Green Party have at its core the sort of restructuring that might work? Yep.

But I’m not voting Green in the Ontario election. Why?  Because there is too much at stake in the potential loss of the nascent Green Energy and Economy Act (GEA). The GEA is the single most progressive, forward-thinking piece of environmental legislation in North America. At this point in history, it just doesn’t get any better. It’s the real deal. If we lose it, Ontario will lose our first, real concrete step toward competing in the emerging low-carbon global economy.

But even worse, if Ontario blinks at this juncture, many American States that are closely watching will back off their budding legislative efforts to build their part of the low-carbon economy. The large financial institutions, which have finally emerged as participating players on the project-finance side (it’s banks that drive all large infrastructure projects, including renewables) will back away. It will take a decade to get the momentum back.

If Ontario loses the GEA, there will be heard all over corporate North America a collective “I told you so!”. The political risk associated with any really progressive climate legislation, whether it’s Green, Blue, Orange or Red in origin, will become the main hurdle to engaging the corporate partners that we need on side to move our infrastructure forward. The little bit of momentum the economically engaged environmental movement has in Canada –  the stuff that’s way past the feel-good stage — will subside. Worse, the GEA will become a lesson in what NOT to try.

Greens, your time will come, but this is not it.

For Ontario voters, pick your battles, and use your arrows wisely. It’s hard to compromise, believe me I know. Idealism is always easier, because you can always tell yourself you’re right and the world is wrong. But that’s just not good enough right now.

Results matter. Support the party that built the GEA, as they’re the only ones in a position to protect it. For Greens, the party-building can continue after the Oct. 6 election, and I’ll be there to help.

Beyond the propoganda of the nuclear industry, I haven’t seen a single credible study that calculates the cost of (new) nuclear to ratepayers below 13 cents per kilowatt-hour. Indeed, there are many reports that suggest nuke power is above 20 cents per kilowatt-hour, particularly when you choose to not hide the hidden costs and subsidies. This makes wind power, landfill gas systems, waterpower and even some large biogas systems competitive with nuclear on a kilowatt-hour basis. And, of course, under the FIT we’re not held hostage to delays or cost overruns like we have been in the past with nuclear. You pay for what you get under the FIT. No risk, no large single points of failure, no risk of meltdown, no worries about handling future radioactive waste, and very high price transparency.

Now, Hudak would have Ontario voters believe that the rate we pay today is what we should expect to pay for future generation. I don’t believe this is a naive belief on Hudak’s part; I believe it’s to intentionally mislead. Fact is, there isn’t a single form of clean (or dirty) generation that can be built new today that isn’t more expensive than the 6 or 7 cents per kilowatt-hour that Hudak (and most media, for that matter) recklessly bandies about. Now, could we get wind generation cheaper through a competitive process? Yeah, we could maybe carve a couple of cents off the FIT rate. But the FIT was intentionally designed to lower barriers to market access — to open up the market beyond the big, deep-pocketed corporate giants who can afford the upfront millions required to respond to a request for proposals (RFP) and, after participating in such a process, can afford to walk away empty handed. The province created the FIT to encourage community participation, and to stimulate the kind of growth that would attract manufacturing and jobs — and it has, despite a few spineless moments and missteps from the Liberal government.

 Now, on to solar. Hudak and his legion of backers, including National Post columnist Parker Gallant (who has somehow managed to turn his column into an official soap box for the Ontario PCs — hell, he even hands over fresh quotes for Hudak’s press releases now), always point to solar prices when talking about the FIT. After all, it’s easier to anger voters by saying generally that we’re paying 80.2 cents per kilowatt-hour under the FIT and that this is 10 times more than the wholesale market rate for electricity. Wow — 10 times more! Crazy. But the comparison shouldn’t be to the wholesale market rate, and the rate itself is far from representative of the FIT program pricing. That scary 80.2 cents, which will soon be lowered, is for less than 1 per cent of FIT contracts when measured on a megawatt-hour contribution basis. Also, that money doesn’t go to big corporate conglomerates intent on vacuuming money out of Ontario. It goes to farmers and homeowners who are taking risks to become participants in the electricity system. The thousands of people taking part are literally changing the energy landscape in Ontario and they’re creating local jobs. You can see it just driving around this province. Put into perspective, the premium being paid to them is more than worth what the province is getting back. Hudak, however, would prefer to demonize them to score votes.

Now, let’s talk about the elephant in the room — big solar. Big, multimegawatt solar projects are getting 44.3 cents per kilowatt-hour. But unlike the small solar rooftop systems, these larger systems will collectively have an impact on electricty rates over the coming years. At the same time, we have to acknowledge that it is because of these large systems that a lot of manufacturing has shifted to Ontario. Still, it’s a lot of solar and a lot to pay, and this is in my view the Achilles heal of Ontario’s FIT program. If there are going to be changes to the program, the most dramatic changes have to come here, but it has to be done in a way that balances the need to nurture an emerging industry and the interests of ratepayers. The answer, in my view, is to embrace a competitive bidding process for these large-scale projects and set caps (targets?) on the amount of big solar we want in Ontario by 2015, 2020 and 2025.

But Hudak isn’t thinking or talking that way. He wants to throw the baby out with the bath water, and in doing so kill investor confidence in the Ontario market, kill green jobs and build new nuclear plants that we’ll have to start paying for 10 years before the first kilowatt-hour is generated. His approach is reckless at a time when Ontario needs surgical, not blunt force, solutions. He’s being destructive at a time when Ontarians want our politicians to be constructive.

On a final note, let’s keep in mind that we don’t have to choose nuclear over renewables or vice versa. While building new nuclear plants may be an unwise decision economically, there is plenty of job creation to come from reburishing or extending the life of Ontario’s existing nuclear fleet — even if we retire a couple of plants, such as Pickering. Indeed, OPG and Bruce Power have expressed concerns about doing these refurbishments and building new because of the limited labour pool and the logistical nightmare of taking so much on in such a tight window. So, the message here is you can continue to aggressively build green energy and capture the associated jobs while keeping folks in our nuclear industry gainfully employed for the next 10 years, simply following through on an existing refurbishment schedule. Talk of building new nukes is a distraction — there will be opportunities in both sectors, and plenty of jobs to go around. We don’t have to choose one over the other.

Just the microFIT alone — i.e. rooftop solar PV less than 10 kilowatts — has seen more than 25,000 applications approved, while larger projects that have been given the go-ahead under the FIT are expected to add more than 1,000 megawatts of solar PV to the grid over the coming two or three years. On Friday, solar PV manufacturer Canadian Solar will be holding a jobs fair in Guelph, the location of its new module manufacturing facility. The company is looking to hire process technicians, general operators, logistic staffs, engineers and others, a true sign of the type of job creation emerging from the FIT program and, behind it, Ontario’s Green Energy and Green Economy Act.

“We have a long-term commitment to this important market, and have previously announced our selection of Guelph, Ontario as the site of a 200 megawatt solar PV module plant,” said Shawn Qu, president and CEO of Canadian Solar. “This facility will be Canadian Solar’s first feed-in-tariff domestic content compliant solar manufacturing plant in Ontario, and is expected to require approximately 500 people to run at full capacity.”

The jobs fair, again, will be held Friday, February 11 at Canadian Solar’s new facility at 545 Speedvale Avenue West in Guelph (see Google Map here) between 9 a.m. and 5 p.m.

The folks who get hired — these are the faces of the future workforce in Ontario. They need to be known. Job numbers need to be personalized. The FIT/microFIT program has its problems, but evidence of job creation is the one thing that will justify and sustain Ontario’s direction. Ratepayers and taxpayers want to see evidence beyond politicians touting numbers that can’t be verified. It’s time to bring faces to numbers, and give people a true sense of what these jobs mean for those entering the workforce and those with families to support who are trying to get back into the workforce. It’s not just manufacturing, either. It’s about the installers, the electricians, the tradepeople and others finding work in the solar PV area. It’s also about the many faces who are participating in the microFIT — farmers, community co-ops, schools, homeowners, aboriginal communities. This isn’t just about foreign companies coming in to the province to feast on generous subsidies. This is about average Ontarians choosing to participate in the future of a cleaner electricity system. This is the message that needs to be heard.

NOTE: To anyone who gets a new job in this sector, let me know. I’d like to hear your story and how green energy in Ontario helped you find steady employment.

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.

Just days before the Ontario government is expected to officially launch its much-anticipated feed-in tariff program (FIT), Energy and Infrastructure Minister George Smitherman announced that the province — through crown-owned utility Hydro One — will spend $2.3 billion on 20 projects designed to expand and upgrade its transmission system. The investment is expected to take place over three years and create 20,000 “green-collar” jobs in the process. Many of the projects are aimed at expanding capacity along existing corridors to carry more power from the Far North where there remains an abundance of untapped wind and hydroelectric projects. But some of the money will also go toward constructing enabler lines for areas of the province where renewable-energy development clusters have been identified. It’s being called an historic investment in transmission, the largest single commitment in decades, and the government said it was important to make this commitment to signal to the market that Ontario is serious about accommodating development of green-energy projects. Indeed, it’s a wise investment to announce just before the launch of the FIT program, and just after announcing a $250-million loan guarantee program dedicated to aboriginal-owned renewable generation and transmission projects.

A description of each projects can be found here. The province has also supplied a map showing where existing lines will be reinforced and where enabler lines will be built.

Well, just three months after being tabled Ontario’s Liberal government has succeeded in getting its Green Energy and Economy Act passed into law. The bill passed by a vote of 59 in favour and 13 against, and will be effective immediately after it gets Royal Assent (a rubber stamp).

This, with no exaggeration, is an historic event in North America. The new law creates a framework for giving renewable energy and conservation priority access and consideration in the design and expansion of Ontario’s electricity system. It will speed up development by streamlining regulations and approvals and will draw more players, such as municipalities, local utilities, community co-ops, and native groups, into clean-energy projects. Programs to flow from the Green Energy Act, such as a new European-style advanced feed-in tariff aimed at stimulating renewable-energy projects, will make Ontario a major attraction for investors and will set an example for other provinces and states to follow.

“The Green Energy Act will truly set us on the path to a 21st century green economy for Ontario, one that is sustainable, easy on the environment, and focused on the jobs of the future,” said Energy and Infrastructure Minister George Smitherman.

The act has received much praise domestically and abroad. Robert Pollin, co-director of the Political Economy Research Institute at the University of Massachusetts, called the legislation “excellent.” Similar kudos have come from British economist Sir Nicholas Stern and German legislator Hermann Scheer.

Stefan Gsanger, secretary general of the World Wind Energy Association, said the law represents “an historic international milestone as the act promises to be the most advanced piece of renewable energy legislation in North America.”

It’s not perfect. It has its critics. A lot is left to be proven. But at least the path has been laid and the work can get started. Time to roll up the sleeves, Ontario.

(Note: Thanks to the University of Guelph student newspaper for the above image)

Also announced recently was a new advanced feed-in tariff program that will see the province’s power authority pay between 44.3 cents and 80.2 cents for every kilowatt-hour of solar power generated by local projects. The highest tariffs goes to owners of residential rooftop solar systems, while the lowest goes to developers of multimegawatt ground-mounted systems. The prices aren’t set in stone, however. The Ontario Power Authority will spend the next few weeks holding stakeholder consultation to fine-tune the pricing.

Everbrite Solar’s announcement is just the latest sign that momentum is building in the Ontario market.

For more details read Toronto Star article here.