'Contents under pressure' as Ontario LCAB and Intertek partner on FIT.2 audits02. May 2012 | Applications & Installations, Global PV markets, Industry & Suppliers, Markets & Trends | By: Cheryl Kaften
Haste makes waste – unless, of course, it makes your company among the first to be audited and certified as a preferred vendor under the domestic content provision of the Ontario Power Authority’s updated Feed-in tariff (FIT.2) program.
The World Trade Organization (WTO) in Geneva has not yet ruled on whether the Canadian province is breaching international convention by stipulating that new solar and wind facilities must be built with a certain amount of domestically manufactured components (60 percent for solar). However, renewable energy vendors worldwide already are hurrying to confer with Ontario’s Local Content Assurance Bureau (LCAB) on the advisability of moving operations to Canada and on the guidelines for meeting domestic content requirements.
In fact, so many manufacturers, suppliers, professional services firms and individuals have consulted with the LCAB about meeting the new prerequisites of the Contributor to Ontario Renewable Energy (CORE) program that the small, five-person bureau has formed a partnership agreement with an outside standards organization, Intertek, to provide its domestic content auditing and inspection services.
"Solar and wind manufacturers from across the globe have contacted us about setting up facilities in Ontario," Etienne LeCompte, managing director of LCAB, told pv magazine. "Most are from the United States, Germany, and China; but we truly have heard from everywhere. Because we are doing such extensive consulting work with international clients, we want to avoid even the appearance of a conflict of interest. Therefore, we are putting up a [Chinese] wall between consulting and auditing by bringing in a very reputable organization, Intertek, to do the CORE Certification."
To date, LeCompte estimates that LCAB has provided CORE certification to about 20 companies. The CORE program is the only Ontario domestic content program that is backed by a rigorous, on-site verification and review process. Intertek’s expertise with special inspections in the Canadian market for renewable energy products will help to provide even faster turnaround time for audits and inspections.
Domestic content audit
Speaking to pv magazine on May 1, Sunny Rai, regional vice president, Renewable Energy, Intertek, commented, "We have been working together with LCAB for a few months to establish this relationship. As part of our training in the CORE Certification process, we recently performed an audit jointly with LCAB at an applicant’s worksite. We are pleased to have been chosen for this partnership and we believe we can provide value to the process. Our local expertise will support the growing demand for domestic content verification services in Ontario and we expect to see these types of programs expanding into markets around the world."
Rai said that a complete domestic content audit can take anywhere from a few days to a few weeks. "It depends on the size of the manufacturer and the number of components," he explained. "If it’s a racking manufacturer with one or two components, that investigation might take less than a week. However, if we are asked to audit an integrator’s facility, with a full supply chain of components, it may take weeks to visit and certify each of the suppliers."
The CORE program provides verification services for all 42 categories across all four of the current FIT Domestic Content Grids. Members of the CORE program have satisfied the strict standards established by LCAB. The CORE program standards are designed to meet or exceed the domestic content requirements established by the OPA under the FIT.2 scheme.
LeCompte remarked, "LCAB’s clients have a variety of auditing needs; including safety and performance testing, and domestic content verification. Through LCAB’s partnership with Intertek, Intertek becomes a solution for all of our clients’ auditing and certification needs, and we are pleased that our partnership with Intertek will help our clients meet these needs efficiently."
hB Solar Canada, with headquarters in Ontario and offices in the United States, was among the first local firms to apply for an audit. The company was awarded CORE Certification last July for the production of its Scirocco flat photovoltaic roof systems. The CORE certification required a detailed onsite review of hb Solar’s supply-chain, sub-contractor operations, and production facilities in order to verify a wide variety of aspects of hb Solar’s production practices, capacity, documentation, and techniques
Ingo Wolfert, managing director of hb Solar said, "With the CORE certification, the Local Content Assurance Bureau has developed a process that I believe will become the gold standard for domestic content certification in our solar industry. It is a comprehensive audit that provides much-needed transparency about domestic content compliance for customers and, ultimately, provides assurance to the taxpayers that the Ontario economy gets maximum benefit from our Feed-in Tariff program."
Wolfert believes that the domestic content requirements of FIT.2 are not only fair, but that they "level the playing field," he said in an interview with pv magazine. "I am a trade economist, and I do not believe that these requirements are counterproductive to fair trade. Domestic content doesn’t stifle competition; it just mandates that everyone must meet the same standards."
Rai commented, "I believe that, in the future, the program will level the playing field. Right now, renewable energy players worldwide are scrambling to understand what is expected of them. Down the road, after the confusion is eliminated and the certifications are completed, vendors all will have made the effort to meet certain, basic expectations—and the playing field will, indeed, be leveled."
As for the WTO case – which will decide whether Ontario’s domestic content provision constitutes fair trade, or discriminates against global trade partners by giving preferential treatment to local providers – parties to the action (Canada, the European Union, and Japan) were instructed to submit written rebuttals to the Dispute Settlement Board by the end of April. The DSB will then schedule a second oral hearing. The International Centre for Trade and Sustainable Development, which observed the first hearing, predicts that Canada will bring new arguments at the second one. A ruling on the case is not expected until late October 2012.
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