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.

Having drawn widespread comparisons to a gold rush, Ontario’s welcoming market for solar photovoltaic (PV) investments under its year-old Feed-In Tariff (FIT) program has prompted a race among solar developers to secure commercial rooftops across the province. The FIT program is widely regarded as providing the most lucrative incentive to generate electricity in the world. The Government of Ontario has committed to paying up to 80.2 cents per kilowatt-hour (kWh) for electricity generated by solar rooftop systems under guaranteed 20-year power purchase agreements. This compares quite favorably to the price of electricity sold to the end-user, which can dip as low as 5.3 cents per kWh during off-peak hours.

Simultaneously, cities across Ontario are incorporating infill development as a significant part of their smart urban growth programs. It’s almost certain these two green trends will eventually experience an increased degree of friction as they continue to rollout across the province’s urban landscapes. In fact, the issue has already attracted media attention in non-PV contexts:

• in Toronto, a local restaurateur found his home severely shaded by a neighbouring infill project that was eventually resolved with the developer’s offer to install a solar-thermal unit that would replace 50-60% of the annual energy used to heat hot water in the home; and
• an Ottawa homeowner who employed a solar “architect” to incorporate passive solar heating for the home is now under threat from a nearby five-storey condo development .

Although the former situation resulted in a happy ending, both stories are cautionary tales for aspiring solar electricity generators, adopters of solar water heaters, and anyone else considering more passive solar heating options. As homeowners, businesses and communities are increasingly drawn to these technologies, protecting one’s sunlight will transform from a mere aesthetic concern to an important economic one.

Solar access has been defined as “the ability to have uninterrupted direct rays of sunlight fall onto one’s property.” A “right to light” would be a legally enforceable right to access a natural and unobstructed flow of solar light. There is currently no “right to light” for Canadian property owners.

Typical legal advice to more commercially oriented rooftop solar generators includes ensuring that their solar lease incorporates covenants from the landlord that it will not take or permit any action which would block or otherwise interfere with light reaching the solar PV array. In addition, a solar lease will also need to address the tenant’s right to terminate if at some point something happens which impairs the availability of sunlight or otherwise prevents the tenant from operating its facility. However, these provisions do not address the root cause of the problem – a lack of an effective and predictable solar access policy framework in Ontario.

Canadian courts have not been eager to recognize a right to light. The Ontario Court of Appeal tackled the issue in the 1978 case Earl Putnam Organization Ltd. v MacDonald. A property owner sued its neighbour for constructing an opaque fence directly in front of a window. The plaintiff argued that the fence interrupted the building’s right to light.

In tossing out the Putnam’s case, the Court of Appeal affirmed that “at common law, there is no natural right to lateral light.” Thus, the court confirmed that property owners enjoy an unrestrained right to build on their land even if their construction will cause shading on neighbouring properties. It has been left up to local politicians and planners to ensure that owners and tenants will not be left in the dark by the encroachment of nearby property developments.

Fortunately, legal developments have occurred that may provide a small ray of hope to future adopters of solar energy. One such tale involves two solar enthusiasts who nearly had a significant solar investment rendered useless by a condo project at King and Spadina in Toronto. Their case was heard by the Ontario Municipal Board (“OMB”), which had to decide whether a developer’s proposed 14-storey condo would be allowed to cast a shadow on their solar array. The OMB cited the extra two hours of shading on the PV panels for an additional four months as having an adverse impact on the community. It was unequivocal in its disapproval stating, “[a]fter all is said and done this proposal is simply too big; it is too massive; it flies in the face of the … [Toronto Official] Plan; its impacts on surrounding properties are too great.”

Municipal zoning by-laws and development agreements are, in fact, attuned to the impact of shadows on neighbouring properties and go some way to ensuring that light, view and privacy can be enjoyed by members of the community. As in the situation above, this approach has resulted in right-to-light issues generally coming before a Committee of Adjustment or the OMB on an application to vary the strict provisions of a zoning by-law.

However, solar proponents considering significant financial investments and 20-year commitments may not be reassured by the “protection” offered by the current regime in Ontario. One option would be for provincial and municipal policymakers to look south and review the panoply of solar access laws that have proliferated in the United States. A number of U.S. jurisdictions have taken it upon themselves to ensure that their property owners can rely on their access to light in order to recoup investments made in solar energy technologies. Until then, it is at least worthwhile reviewing an Official Municipal Plan and local zoning bylaws to determine if your potential solar generator could be left in the dark.

Robert J. Wakulat is an independent green energy and business lawyer residing in Toronto. Visit his blog at wakulat.blogspot.com for his views on various legal issues related to green energy.

I remember it was just a few years ago when it was a big deal to see 1 megawatt of solar installed across ALL of Ontario, let alone single projects.

Highlights:

• 80.2 cents per kilowatt-hour for rooftop solar.
• 19 cents for offshore wind of any size (first jurisdiction in N.A. to set price)
• 13.5 cents for onshore wind of any size
• 14.7 for biogas under 5 MW.
• 44.3 cents for 10-MW-plus solar, sliding to 71.3 cents as projects scale down to 10 kilowatts.

The government will commence eight-week consultation process and expects to have the prices in effect this summer. More to come….

UPDATE: Here’s an article I just filed to the Toronto Star’s Web site. It contains more info regarding the proposed tariffs. Ontario introduced basic feed-in tariffs two years ago under its standard offer program, but project size was capped at 10 megawatts. The new advanced feed-in tariff program lifts the cap (though solar is still capped at 10 megawatts). It also offers higher prices for smaller projects, such as community-based wind and solar projects or residential solar. Most groups seem happy with the pricing with the exception of large solar developers, who despite getting a 2-cent increase to 44 cents per kilowatt-hour still argue it’s not enough to make projects economical (especially if you factor in poor Canadian-U.S. exchange rate and persistently tight credit markets).

Of course it remains to be seen whether this new feed-in tariff structure, despite being generous and being first on the continent, will be enough to attract investment, development, manufacturing and jobs. Curious to hear viewpoints on this.  Michigan introduced a bill last year that proposed similar advanced tariffs but it never got passed. Hawaii has proposed less ambitious tariffs, but Ontario’s will be first to go into effect and will be the most ambitious to date.

Such pronouncements are getting rather tired.

For one, the dot-com folks brought on their own collapse. No revenues. No profits. No real market need. Crazy valuations. Irrational acquisitions. Inflated pay. Too much partying, networking, and elevator pitches and not enough work that mattered. And the dot-com collapse wasn’t spurred by a larger economic decline. In fact, one could argue it was the bleeding edge of a decline that followed. The current situation is completely different. Cleantech companies and stocks that are struggling are caught up in a much larger decline sparked by a crisis on Wall Street. Some cleantech companies are fairing better than others, same as any other industry. One could argue the oil and gas sector has taken an even larger hit. To look at cleantech in isolation and start talking about a bust is, well, is a huge stretch. 

Emerging Energy Research just made the following statement today about solar: “Unfazed by the financial crisis, utility-scale and large commercial PV development activities in the US are exploding.  And with the October 2008 passage of an 8-year Investment Tax Credit, opportunities are expected to multiply in the years ahead.”

That doesn’t sound like a full-scale bust to me.  On the issue of declining oil prices and history repeating itself, let’s remember that oil — in the grand scheme of things — still isn’t cheap at $55 a barrel compared to what industry expected just two years ago. And more and more people are saying prices will be skyrocketing back up in 2009 and beyond as demand begins to creep up again and supply constraints become apparent again. The International Energy Agency says after 2010 the situation could become quite critical and we’re going to need massive investments in clean technologies to help cope with higher oil prices. It’s also expecting an average of $100-plus oil from 2010 onward.

The death of the green movement? Not a chance. Back in the 1980s and 1990s when oil prices were ridiculously low we didn’t have governments talking seriously about carbon taxes and cap-and-trade systems. We didn’t have groups representing more than $1 trillion in institutional investments demanding that publicly traded companies reduce their carbon footprint. We didn’t have a call for green-collar jobs as a way to stimulate the North American economy, or a U.S. president that made it a cornerstone of his platform. We didn’t have China to deal with, or Chinese leaders who understand that their current path to economic growth is not sustainable. We didn’t have mature solar, wind and other green technologies becoming cost-competitive with increasingly costly conventional options. We didn’t have an appreciation within larger corporations that being green isn’t about being a treehugger, it’s about reducing costs associated with inefficiencies, increasing profits and revenues, and staying competitive. We didn’t have an understanding, let alone a mainstream appreciation of the seriousness and certainty of global warming. We also didn’t have billions of dollars in venture capital being poured into cleantech startups, or an SUV-addicted domestic auto sector on the verge of bankruptcy, or blue chip companies like Wal-Mart and General Electric embracing the greentech agenda and providing a counter-balance to the powerful fossil fuel and nuclear lobby.

That fossil fuel and nuclear lobby, by the way, sees the current economic crisis as an opportunity to poke holes in cleantech as a trend that will go away like the hoola-hoop. It’s no coincidence that a number of conservative U.S. think tanks have released reports over the past couple of weeks arguing against renewable-energy and other green technologies and highlighting the incentives and subsidies behind them, of course conveniently ignoring the problems and subsidies that underpin our existing energy infrastructure. They tried this when earlier this year the world was in a tizzy about a global food crisis, and of course ethanol was to blame. A couple of months later this speculator-driven crisis disappeared after we saw grain prices, along with oil prices, plummet. People are still starving around the world, but now that we can’t blame ethanol, it’s like it doesn’t matter. Very sad.

So, let’s get over this discussion of cleantech as a bubble and appreciate that the trends underlying this sector will not go away just because of an economic downturn. Increasingly, the view is that cleantech will be one of the things that gets us out of this economic downturn.

Good on Quebec for driving this deal through. According to REC, it spent 17 months screening more than 100 possible locations in 16 countries. It then narrowed the list to 40 sites before going through intense due diligence. Once a short list was established it engaged in final negotiations. Certain jurisdictions, like Iceland or Quebec, have an advantage over others because they are heavy on renewables — such as geothermal and hydroelectric — and aren’t subject to fuel price volatility. This means they can not only offer power for cheap, but can also offer a price that stays the same for 20 years.