Ontario: On the way to implementation

02. December 2011 | Top News, Global PV markets, Industry & Suppliers | By:  Hans-Christoph Neidlein/Alan Faulcon

Despite significant financial incentives and a large project pipeline, comparatively few photovoltaic systems have been installed in Ontario thus far. The solar industry is now relying on faster approval phases, greater acceptance on the part of the banks and dynamic adjustment of the feed-in tariffs (FIT) to decline prices.

First Solar thin film Sarnia 80 MW photovoltaic project

After the RESOP Program, all of 52 photovoltaic projects worth 528 MW, including the Sarnia project, been applied for.

Anyone who intends to build a larger solar system in Ontario will need patience. On average, approval for solar parks in the megawatt (MW) range currently takes two years, according to Jon Kieran, member of the board of the Canadian Solar Industry Association (CanSIA).

And anyone who desires a bank loan will likewise have to demonstrate perseverance as many local banks are still skeptical when it comes to solar energy. "The licensing authority, the Ontario Power Authority (OPA) and our banks still have a lack of experience with photovoltaics and implementation of the feed-in tariff programs," stressed Kieran.

In accordance with the Green Energy Act, adopted in 2009, a solar system operator in Ontario receives between 44.3 Canadian cents (31.9 euro cents) and 80.2 Canadian cents (59.1 euro cents) per kilowatt (kW) hour.

According to information provided by the Ministry of Economic Development and Innovation, a total of 9,190 applications were submitted from October 2009 to October 2011 for subsidizing photovoltaic systems larger than 10 kW, with an overall output of 8,266 MW, within the scope of the FIT.

The FIT contract was in fact granted in 2,443 cases (4,750 MW). But up to now, only 100 projects (25 MW) have been commissioned, while another 1,895 (4,604 MW) are under development. In the case of the MicroFIT program (for projects less than 10 kW), a total of 42,905 applications worth 397 MW were submitted in the same period. The OPA approved 24,303 (222 MW), while 8,128 smaller solar electricity plants with an overall capacity of 70 MW are in operation.

CanSIA member of the board Kieran expects to see new photovoltaic installations in Ontario this year in the amount of approximately 350 MW. However, the lion’s share will be plants that were already applied for after the Renewable Energy Standard Offer Program (RESOP), set up in 2006 and replaced by the FIT Program in 2009 – and which runs out in January 2012.

After the RESOP Program, all of 52 photovoltaic projects worth 528 MW have been applied for thus far; this includes the world’s largest solar park near Sarnia, which was put into operation last October (80 MW).

"In the case of larger plants after the FIT Program there was a virtual halt to investments this year," said Kieran. Apart from the large project pipeline of the old RESOP Program, he sees the reasons for this as consisting in the longer approval periods and reservation on the part of the banks, as well as the controversial political discussions on the future of energy policy prior to parliamentary elections in Ontario, at the beginning of October.

Acting prime minister, Dalton McGuinty, who was reelected by a close margin, anticipates continuation of the remuneration provided for by the FITs under the Green Energy Act.

Currently the tariffs are revised every two years, and in January the initial parameters are to be announced. It is expected that the tariffs will be markedly reduced, due to the worldwide decline in the costs and prices for photovoltaic systems.

"We want more stability on the market and support a realistic adjustment of the feed-in tariffs based on the reductions in cost," assured Kieran. In addition, he endorses "more dynamic and more frequent adjustment of the remuneration based on Germany as a model."

However, the local regulations on domestic content are also disputed within the Ontario solar industry. Under the requirement, a solar plant operator who applies for a FIT, must ensure that 60 percent of the plant’s components, materials and/or labor, comes from Ontario. But behind closed doors, the opinion is that this regulation results in prices that are not competitive on a global scale.

Global companies that are directly affected and do not produce in Ontario up to now, due to the relatively small size of the market, such as, for example, First Solar, express themselves more openly. "The domestic content has to go," stated Tom Kosnik, director of customer relations at First Solar in Sarnia.

The U.S. manufacturer delivered the 1.3 million thin film modules for the local solar park and developed the large-scale project together with the Canadian energy and construction company Enbridge. "For our next projects in Ontario, we will have to look around for local module suppliers. Whether or not they can actually compete in terms of prices remains to be seen," added Ian MacRobbie, general manager at Enbridge.

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philip ridge | http://www.theenergystore.ca

Friday, 02.12.2011 15:13

This article is spot on. In addition I would like to mention that the reason so few systems are connected is purely the bureaucracies of the OPA and Hydro One with partial blame on the OEB and the MEI. The reason there is a glut of panels is because the manufacturers came here to make them and cannot ship them because projects are not moving forward. The government talks about the wildly successful program, but with only 28Mw installed?? Where is the success? I would also like to mention that the OPA does not comply to its own rules. This creates a lot of uncertainty. Many businesses that started two years ago, especially Dealers, are now out of business, they could not wait for cash to start flowing, businesses need very deep pockets to stay in this market. The OPA has now backdated the price change to Sept 1 for microFIT and Dec 8 2010 for FIT. Their rules are a 90 day notice. Businesses cannot stay in business with extreme uncertaintiy and government games. The government absolutely must recognize that being in businesses means certainty for long term investment and creating a viable, well run program.
There is a total of 20000 Mw in applications, of which less than 100Mw has been connected over the past two years. In fact, there has been absolutely zero connections for ground mount solar - this is easily checked by looking at the OPA bi-weekly report.
Hydro one is stymied by OEB, OPA is a bureaucratic nightmare, every municipality has its own version of building permit and every LDC has a different application form as well as pricing from $300 to $2000 for conection costs.
If we expect 350Mw to be connected next year, then we might as well pack it all in and go home.

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