The Ontario government released a two year review of the FIT program on March 22, 2012. To date, the program has contracted 4,600 MW of generation – enough to power 1.8 million homes a year. That’s almost 40% of all the houses in Ontario. Its estimated that the program has created over 2,000 direct manufacturing jobs with close to 30 solar and wind manufacturers operating or soon to be operating facilities in Ontario.

The review is undertaken pursuant to s.10.1(a) of the FIT rules and s.7(a) of the MicroFIT rules. The impact of this review is different for FIT and MicroFIT projects. Under the MicroFIT program rules, the review will not effect existing contracts or applications where a conditional contract has been issued. Under the FIT program rules, any ‘significant program amendments’ (the review’s price changes constitute a ‘significant program amendment’) that apply to applications submitted before the amendment is made will allow those applications the option to withdraw the application from the ‘Production Line’, decline to execute the offered FIT contract, or withdraw from the program all together. These options have to be taken within 30 days of the amendment. For amendments that are not ‘significant’ but represent a ‘material adverse effect’, an applicant may request to withdraw from the program.

The review in based around 6 strategic recommendations and 17 technical recommendations.

Key Strategic Recommendations

– Procurement of 10,700 MW of non-hydro renewable energy by 2015 (this would include the 4,600 MW already secured through the FIT program)

– Allocate 50MW of remaining 6,100 MW to hydro projects

– Review FIT prices annually

– Include solar PV (<500kW) in Environmental Activity and Sector Registry for self-screening as opposed to a full assessment under the Renewable Energy Approvals regulation

– Cut the commercial operation milestone for rooftop solar in half, from 36 months to 18 months

– Prioritize FIT applications based on points gained through Aboriginal, community/municipal involvement, project readiness and through some certain water/bioenergy projects

– Prohibit ground-mount solar (over 10kW) on prime agricultural land with class 1,2, or 3 soils or with organic or mixed soils

– Prohibit any size ground-mount solar in and around residential areas

– Decrease FIT pricing and set the price for a particular contract at the time of the contract offer as opposed to the time of the application:

(For Solar PV)

<10kW:  rooftop from 80.2 to 54.9 cents/kWh, ground mount from 64.2 to 44.5 cents/kWh

<100kW: rooftop from 71.3 to 54.8 cents/kWh

<500kW: rooftop from 63.5 to 53.9 cents/kWh, ground mount from 44.3 to 38.8 cents/kWh

>500kW rooftop from 53.9 to 48.7 cents/kWh

<5MW ground mount from 44.3 to 35 cents/kWh

Key Technical Recommendations

– Allow for existing contracts to withdraw from program and have security fees returned (this will help free up program space and infrastructure capacity)

– FIT projects would need to earn at least one point under the new points system to be eligible for a contract

– Under the MicroFIT program, issue an ‘application approval notice’ as opposed to a conditional contract

– Escalate a portion of the FIT price with inflation over time (but this is not applicable to solar)

– Maintain Hydo One’s technical limit for connection of micro-generation (7% rule), read a recent technical review of the issue here

– Projects with only minor transmission improvements should receive priority for contract offers

– End the ‘economic connection test

If you’re concerned how the FIT program changes affect you, get professional advice at www.envconsult.ca.

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