The race is definitely on… Ontario’s feed-in-tariff programs, titled FIT and MicroFIT, are creating a boon in the solar industry. New manufacturers of solar panels, new installers, new consultants are all coming on line to meet the growing demand created by the Province’s offer to buy electricity at 15 times the going rate. Rooftop solar is clearly the big winner here, being paid the highest premium right now out of any of the renewable energy sources covered in programs.
The trick for the Province has been a) high premiums, but also b) domestic content requirements. These requirements ensure that some or all of the work done in manufacturing or installing solar projects is done in Ontario. This is the backbone of modern environmental change…. changing our provincial economy from coal burning, mining and steel making to a renewable energy leader. These domestic content requirements are low right now, only 40%, which allows projects to meet the requirement with only some ancillary pieces of equipment/services being supplied from Ontario. But in January 2011, they bump it up to 60%… essentially meaning you will have to buy solar panels from an Ontario-based company.
Its still to be seen whether the Provincial program has enough resources (staff and money) to meet the coming demand. The first round of applications they received had 12,000 projects, but only 700 got processed. In Germany, this program was start some years ago. There, the government ramps the program up for couple years, then back down once they meet their desire renewable energy content (or once they run out of funding!).
This summer is looking like it will bring a surge in projects to the Province… the incentive is just too big. The investment is about $70k for the largest of the MicroFIT solar projects, with about a 7-9 year payoff depending on equipment and financing costs. Even with financing, the average returns are typically greater than the loan payments, making it attractive for almost anyone with the roof space and access to financing.
Rooftop solar in Ontario is literally a once in a lifetime opportunity. We haven’t seen something of this magnitude before… who knows how long it will last.
Graystone Environmental provides a one-stop shop for all things environmental, including turnkey FIT and MicroFIT projects. Find out more here.