Minnesota-based ILSR examined the cost of Ontario’s feed-in tariff (FIT) program and its controversial "buy local" provisions, and compared it to similar federal and state programs in the U.S. In its report, ‘Maximizing Jobs From Clean Energy: Ontario’s ‘Buy Local’ Policy‘, the institute concludes that the Canadian province is getting more bang – jobs – for its buck than U.S. programs.
To qualify for a FIT contract, developers of solar energy in Ontario must source 60 percent of their project’s value from within the province. This domestic content or "buy local" rule has spurred a fast-growing renewable energy industry in the province, says John Farrell, the report’s author, who adds that over 20 new manufacturing plants are scheduled to open in the next two years as a result of the policy.
Ontario has clout in North America, continues the report, because of its size and economic influence. If Ontario were a state, it would rank sixth in size behind Texas, fifth in population following Florida, and sixth in economic activity behind Pennsylvania.
"The buy local provision in Ontario creates a simple, comprehensive economic development strategy for renewable energy that is in stark contrast with the complexity of clean energy programs and incentives used in the United States," explains Farrell.
Furthermore, ILSR’s report estimates that Ontario’s cost per new job created is one-fourth that of jobs in five new manufacturing plants recently built in Ohio and Michigan using state and U.S. federal subsidies.
Farrell also dismisses concerns that Ontario’s "buy local" policy will be overturned by a trade challenge from the U.S., noting that there are many trade disputes between both the U.S. and Canada, and the U.S. and Europe, which remain unresolved after years of negotiations.
A critic of U.S. federal tax credits, Farrell points out in the report that FITs are a more equitable way of developing solar energy in particular. For example, he says, most families do not have sufficient tax liability to fully exploit the federal tax subsidies for a small rooftop solar system. In contrast, anyone in Ontario with a suitable roof can install a solar system.