Ontario to remove domestic content requirement from FIT program31. May 2013 | Trade cases, Investor news, Global PV markets, Markets & Trends | By: Max Hall
Following the failure of an appeal to the World Trade Organization (WTO) decision against the domestic content requirement of its renewable energy FIT scheme, the Ontario Energy Department has announced plans to remove the offending provision.
Canadian national newspaper the Globe and Mail has reported that the province will remove the stipulation that solar and wind installations must be at least 50 to 60% manufactured in the province to qualify for the premium FIT rate.
The report quotes Energy Minister Bob Chiarelli conceding that the FIT scheme will be modified after the WTO this month threw out a Canadian appeal against its December ruling.
It is expected that the FIT scheme will be modfied early in 2014. Japan had complained to the WTO about the domestic content requirement in September 2010, complaining that it breached world trade rules by being unfairly biased against non-Ontarian manufacturers. The EU later added its own complaint in August 2011.
The WTO panel upheld the complaints in December and dismissed an appeal against the ruling, by Canada, on May 6.
Andrew Hill Highland Solar from Toronto, Ontario
Friday, 31.05.2013 17:37
The massive irony is that the vast majority of the solar component brands being sold in Ontario are overseas companies: Most of the panels are contract manufactured here by the 'Big Players" that have decided to be in our sandbox, mostly from Asia, and the inverters are 'final assembled' here to meet content, again mostly by overseas companies from Europe and the USA.
Is 'domestic content' protectionist? Not to the extent that a punitive import duty is; particularly when you take into account that the profits on the products assembled here were headed out of the country anyway!
Will this affect our handful of "Home-Grown" panel manufacturers? Likely to some extent, yes; but the aforementioned punitive duties (in the USA and Europe) will go some of the way to allowing a more competitive footing for them in other markets.
Will a drop in Feed-in-Tariff rates and the lifting of domestic content requirements result in any more uptake or much lower component pricing? No where near as much as some might think...with the other changes to the large-scale side of our programme here, and the costs of logistics, we will not likely see too much of a change in our market pricing or activity until at least summer 2014.
"Stay Calm and Carry On" as they used to say in London during The Blitz...it has been a rather rough ride in the "Wild West" that has been the Feed-in-Tariff marketplace in Ontario for the last 3+ years...but at least the horse is slowing down and becoming a little bit more predictable now.
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