microfit lawyer

How many 20 year contracts worth hundreds of thousands of dollars do you sign without talking to a lawyer. The FIT and MicroFIT contracts are no different. Don’t be persuaded by the fact that these are standard form contract… so are mortgages.

Consulting the right lawyer before entering into these contracts or beginning these projects will give you the knowledge and security you need to make a successful investment in this very profitable renewable energy program. From buying the right technology and equipment to ensuring you know all your contractual rights and obligations, the right FIT or MicroFIT lawyer can be a solid, unbias advisor in what is turning out to be a very competitive and aggressive renewable energy market.

There are examples of MicroFIT applicants starting projects and incurring significant costs before they even have their contract in hand. There are even fears now that if a Conservative government were elected in November, they could claw back some or all of the contracts leaving project owners with litigation as their only recourse.

If you’re looking to set up a FIT and MicroFIT project, or if you’re concerned about the legal issues and risks associated with the FIT or MicroFIT contracts, call the MicroFIT lawyer.

Call Graystone Environmental for solid, informed and knowledgeable advice and consult on your renewable energy project.

US climate regulation set to heat up in 2011

With pressure mounting on Canadian climate action, 2011 should shed some light on the future of climate regulation in Canada. First, the recent action by the US has resulted in calls for Canada to follow suit. Also, we have the pressures on provincial climate (and green energy) policies. With the Western Climate Initiative (WCI) set to launch in 2012, provinces will developing regulatory requirements for the WCI’s cap and trade system, but with an election in Ontario that could send that province’s green plans into reverse and limited participation in the U.S., the liquidity (read effectiveness) of the WCI system looks shaky at best.

Focusing on the U.S. action…

On January 2, 2011, the Prevention of Significant Deterioration (PSD) requirements (under s.160 of the Clean Air Act) began applying to GHG emissions. These requirements result in source-specific emission limits for the biggest new and modified sources. Emission limits are based on what is achievable given the best available control technology (BACT) for the source. So new and modified sources need to build using clean technology and operate under an emissions limit associated with that technology.  The fun here, comes from the numerous and ongoing litigation, a Congressional vendetta, and Texas, who has refused to incorporate new GHG requirements in their PSD regulations.

On December 23, 2010, the EPA announced that in addition to the PSD requirements for new and modified GHG sources, there will also be national ‘sector-based’ performance standards – New Source Performance Standards (NSPS) – (under s.111 of the CAA) for GHG emissions from new (and modified) electricity generators and petroleum refineries. These standards are a question mark right now in terms of how they will be set out and what, if any, work standards or techniques will accompany the NSPS. In terms of stringency, the NSPS acts as a ‘floor’ for any PSD BACT-based standard – meaning the PSD emission limits will not be any less-strict than the NSPS.  The final standards are due by the end of 2012.

Also of interest here is that action under s.111 by the EPA for new sources, requires States to address existing sources in these sectors. To help fulfill that requirement, the EPA will release guidance for States. This specific requirement for States to regulate existing sources in a sector for which an NSPS has been set, has a narrow application (only for pollutants that don’t have a National Ambient Air Quality Standard (NAAQS) and aren’t addressed as a hazardous air pollutant (HAP)) and has rarely, if at all, been used… this is for all intents and purposes, new ground. Some even say that the NSPS provisions give just enough room to for the EPA to start an emissions trading system. EPA guidelines are due at the same time as the NSPS but won’t likely be required any earlier than 2015.

What is interesting here as well, is how this move to address GHGs using NSPS provisions came about. Various States and environmental groups were in the course of litigation with the EPA to force them to include GHGs in new/existing NSPS. As part of two settlement agreements to end the litigation, the EPA agreed to include GHGs in NSPSs for electricity generators and petroleum refineries. Read the settlement agreements here.

So in addition to the current and no doubt forthcoming PSD litigation and the new chapter of the decades-old Texas v. EPA battle, there will be lots of discussion around NSPS and layered over all of this will be a congressional attempt to block any EPA action. For Canadian emitters, the key here is the fact that the US is poised regulate GHGs from new, modified and existing sources using middle to low stringency performance (read intensity) standards, primarily based on energy efficiency improvements rather than ‘step-change’ technology improvements. There might even be a push for emissions trading, making the US picture eerily similar to Canada’s 2007 Turning the Corner plan.  Now this is all tempered with a new Republican-led Congress in the US that is bent on stopping (or at least delaying) the EPA from acting on climate change regulations so stay tuned for more updates as things progress.

US takes another step towards climate change regulation (UPDATED)

Yesterday the US EPA released its much anticipated guidance on determining the ‘best available control technologies’ (BACT) for reducing greenhouse gas emissions, read it here.

The guidance is part of an attempt by the EPA to regulate GHG emissions from stationary sources under the existing provisions of the Clean Air Act (CAA). Specifically, the EPA interprets the CAA as requiring the inclusion of GHG emissions in the requirements under the Prevention of Significant Deterioration (PSD) program. The PSD program requires new and modified sources to be built using BACT. A new or modified source applies to the State and shows that it is built using BACT. The State then issues a construction permit allowing the source or modification to be built. The permit contains an emissions limit that the source must operate under once built.

The guidance released yesterday is two part: (1) general guidance on determining if a source is covered and how to determine BACT for that source; and, (2) source category specific guidance on GHG emissions control technologies. The sector specific guidance was released for 7 sectors: Coal-fired Electricity Generation; Industrial, Commercial, Institutional Boilers; Pulp and Paper; Iron and Steel; Cement; Petroleum Refineries; and, Nitric Acid Plants.

The guidance helps permitting authorities (States) and regulated sources to determine BACT. In the first instances, BACT determinations may be difficult and will be likely settled in court. There is a good chance that if the PSD GHG requirements become a reality (which is not certain in any way given the lawsuits currently filed), there still won’t be a source operating under a PSD GHG emisssions limit until well into 2012 if not later. While the guidance does list out and discusses a variety of emission control technologies, the focus by far is on energy efficiency… and rightfully so, there are few if any add-on technologies that reduce GHG emissions (with perhaps a hopeful placeholder for carbon capture and storage) the BACT is not supposed to be cutting edge experimental tech – its supposed to be proven in practice and applicable to the specific source. This, combined with the fact that PSD only applies to new and modified sources, does not bode well for achieving the US’s 2020 target for a 17% reduction in emissions from 2005 levels.

This is the latest in a long-running  series of steps that the EPA has taken towards regulating GHGs under the existing provisions of the CAA.  Here is a quick history…

April 2007 – The US Supreme Court determined that GHGs are ‘air pollutants’ as defined in the CAA and order the EPA to determine whether or not GHG emissions from new motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare, or whether the science is too uncertain to make a reasoned decision. (Massachusetts v. EPA)

July 2008 – The EPA released its Advanced Notice of Proposed Rulemaking on regulating GHGs under the CAA outlining possible courses of action and seeking public comment.

December 2008 – The EPA Administrator issued a memo that interprets how and when the PSD requirements for GHG emissions are triggered (aka Trigger/Timing Rule) — EPA interprets the PSD provisions as requiring the inclusion of GHGs in the program as soon as other CAA requirements for GHG emissions (i.e. regulations on GHG emissions from vehicles) come into force. The final memo was confirmed earlier in 2010.

December 2009 – The EPA issued 2 findings: (1) that GHGs threaten the public health and welfare of current and future generations; and, (2) that GHG emissions from new motor vehicles and new motor vehicle engines contribute to the greenhouse gas pollution which threatens public health and welfare. These findings are a statutory requirement for the EPA to regulate emissions from mobile sources under s.202 of the CAA.

May 2010 – The EPA released its final rule ‘tailoring’ the PSD thresholds (aka Tailoring Rule). The rule adds a second tier of thresholds to the existing thresholds set out in the CAA. This second tier is required to limit the application of PSD GHG requirements to only the largest sources.

May 2010 – The EPA finalized regulations on light duty vehicles (aka Tailpipe Rule). These regulations are the first instance of GHGs being regulated under the CAA. The EPA has interpreted the CAA as requiring the PSD program to include GHGs on the date that the light duty vehicle regulations come into force (January 2, 2011).

Again, there is no certainty that the EPA will be successful in its attempt here to regulate GHGs under the PSD program of the CAA. There are court challenges that question almost every decision that the EPA has made here, and the arguments against the EPA are strong. If a court issues a stay (halting the EPA’s action) the matter may take years to resolve… maybe Congress will have something substantive figured out by then! UPDATE: The District Court of Appeals unanimously rejected the challengers’ motion to stay… read the decision here. So barring any congressional action to block EPA authority, the EPA will introduce GHG requirements under the PSD program on January 2, 2011. But by no means is the court battle over. The case will now be heard on its merits and some think that the EPA is still in trouble… read an opinion here. Expect this case to last well into 2011 if not longer.

status of ontario’s fit and microfit programs

Well the big news since the last post is that the government conceded a bit on the ground mounted solar. Any application that was received before noon on July 2, 2010 will receive the standard 80.2 cents/kWh rate…. good news for at least some of the farmers.

The program is coming up on a year old and should soon be ready to decrease rates for rooftop projects as well. In Germany, rates of their FIT program decrease between 8-11% per year. This ‘degression’ is controlled by the growth of the solar market, which is targeted at about 15% per year. In Ontario growth has been pegged at over 250% in 2010 from 2009 (see here) so people in Ontario can likely expect a significant rate cut in the next 6 months.

The other big news is the trade complaint launched by Japan against Ontario for its FIT program. This issue here is not the subsidy for solar electricity, but the domestic content requirement for eligible solar projects. Right now, that requirement is at 40% but is set to move to 60% in January 2011. The big deal is that Japan makes solar panels. At the 60% content requirement, projects are basically forced to but panels made in Ontario… and Japan does not like this. This issue was brought up in Ontario back in June but with little attention. You can read Japan’s WTO complaint against Ontario’s feed-in-tariff program here. UPDATE: On October 1, 2010, we got word that both the U.S. and Europe have joined battle. This is shaping up to be a pretty big deal, and maybe not the greatest news for solar manufacturers in Ontario.

So if you’re thinking of getting in while the rates are high, now is the time, particularly with rooftop solar PV. First step, talk to Graystone Environmental. Knowing the technical and legal sides, you’ll get the best advice to point you in the right decision for you and your project. Graystone Environmental does not sell or install projects – you’ll get sound technical and legal advice, honest and unbiased. Services range from initial project scoping to professionally project management from conception to final contract. If you’d like to know more about the FIT program and how Graystone Environmental can help get your project ‘off the ground’, read a quick primer here.

kerry lieberman american power act

So I’ve been scraping through the latest Senate climate bill, read a copy here. I haven’t really focused yet on anything other than the emissions trading sections. Things are similar to other congressional bills insofar as coverage, targets, and compliance options. Here’s a quick summary of the things I’ve noticed.

Coverage The bill covered essentially the same entities but covers emissions differently. Instead of making fuel producers and importers being responsible for emissions from all the fuel they produce or import, the APA makes ‘refined product providers’ (RPPs) liable for all emissions for the fuel they are, at some point, responsible for except those emissions from fuel use by regulated entities. This makes more sense because regulations should aim to regulate at the point of emission where practical – if these entities already are responsible for some emissions, then it doesn’t make sense to carve some out and make others responsible for them (as the other congressional bills did). Covering RPPs will allow emissions from the millions of consumers (commercial and residential) to be brought into the system without actually covering each point of emission. One last note is that the bill wouldn’t take effect until January 2013, delaying application for manufacturing industries and natural gas distributors until 2016.

Targets The bill proposes an economy-wide emission reduction target of 17% by 2020 from 2005 (same for the target for reductions from covered entities). This is lower than the Kerry-Boxer senate bill, but in-line with the President’s pre-Copenhagen announcement.

Allowance distribution The new bill has no ‘pre-distribution’ set-asides. Allocations for  covered entities haven’t dramatically changed; emission extensive and trade exposed industry getting 2% in 2013-2015 and 15% per year out past 2020, natural gas distributors will get 9%, but refiners have been given a big boost in their allocation averaging about 4% per year out past 2020. I’ll note here also that in previous bills, there was a provision that limited the EITE allocation to the percentage allocated in the bill, despite that industry may qualify for a greater number of allowances by way of the distribution methods in the bill – if industry qualified for more than what was allocated, then each entity would receive a pro-rated share of the allocation. This limit doesn’t seem to be there anymore. With this missing (which I’ll assume for now is a mistake), it leaves the EITE allocation a bit uncertain.

But the big kicker with allowance distribution is the ability for the EPA Administrator to borrow allowances from the following year to ensure an adequate supply for the current year. What this does is effectively lower the cap in that following year, having the same effect as a ‘set-aside’ – e.g. the 15% for EITE would be of a smaller cap number so their absolute allocation will be less than if the borrowing hadn’t occurred. All of this is because of the unique way the bill provides allowances for the ‘refined product providers’ (i.e. commercial and residential gasoline, diesel, heating oil suppliers). The Administrator is required to sell to the RPPs all the allowances they need to cover their emissions obligations at a set price – and the RPPs are forced to buy those allowances (i.e. a fancy fuel tax). The Administrator gets these allowances from the amount of allowances that will be available for auction. If the allowances available for auction are less than what’s needed for the RPPs, the Administrator can borrow the necessary amount of the allowances from the following year. By rough estimates, this could happen as early as 2016. This means two things, by 2017 there would be no allowances available to be auctioned to other covered entities (therefore they’ll need the 2 billion offsets the bill creates), and the absolute allocations in the following year are lowered. All this will likely drive the price higher in future years, spurring the offset market and in-house reductions.

Compliance options With alot of the same options available as in previous bills, there’s not much new in terms of compliance. The bill has a reserve of allowances similar to the Market Stability Reserve in the Kerry-Boxer bill – the new bill allocates a certain percentage of allowances under the cap in each year to be sold at a fixed price starting at $25 for 2013 vintage allowances, but no banking of these allowances is permitted. This mechanism will help keep the average overall allowance price at a reasonable level but will only provide about 70Mt of allowances (1.5% of the cap) in the first years – the full ‘price collar’ impact that some are speaking of doesn’t really happen until much later (2040 – 2050). For most other allowances banking, trading, and borrowing is permitted along the same lines as other bills… unlimited banking and trading with free borrowing 1 year into the future and borrowing at 8% upfront interest for 2-5 years into the future. However, allowances sold to RPPs cannot be banked or traded.

2020 Effective reductions The allocations provided directly to covered entities in 2020 can be expressed as a percentage of their 2005 emissions, giving us a rough idea of what level of reductions are being required from each sector by 2020 in order to meet the 17% reduction target. Here are those effective reductions… with all numbers derived from EPA 2005 emission values for covered entities. These numbers also take into account estimates for system-wide borrowing to accommodate RPP allowance needs – estimating that about 2400Mt of allowances will be needed for RPPs in 2020.

Electricity: ~90% reduction (only industry allocation is to Merchant Coal and Long Term Generators)

EITE industry: ~10% reduction  (from all direct and indirect emissions)

NG Distributors: ~35% reduction

Refiners: ~20% reduction

ontario’s rush to solar

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.

ontario renewable energy industry

With the new feed-in tariffs in Ontario for electricity from renewable sources, both the manufacturing and the development sides of the industry are set to become a mainstay in our provincial economy. Particularly with solar PVs, new manufacturers are beginning to set up shop in Ontario and progressive communities are supporting these emerging businesses. With industry comes a need for skill, which breeds a natural connection with local colleges and universities. We can see this happening in both the solar PV and the wind industries. Solar PV system installers are in high demand, providing growing support for colleges to adjust their curriculum to meet the needs of the industry.

But often overlooked in the implementation of renewable energy initiatives is the administrative and policy side of the transaction. Return on investment numbers and capital costs often overshadow the actual working gears of the renewable energy movement… the contracts, the applications, the approvals. Ontario has a 19 page standard form contracts for suppliers of electricity from renewable sources, which makes it easier to enter into the contract, but without some careful reading one might glaze over the fact that any offset credits generated by the project become property of the OPA. Projects of significant size likely need municipal approvals and may require a tricky appearance before the Ontario Municipal Board. Both commercial, institutional, and residential suppliers of renewable energy need to ensure that despite the emphasis on the quick and easy, standard form, feed-in tariff benefits, there is a complex side of the renewable energy movement that requires just as much attention … if not handled properly, it could be mean a quick end to a well-intentioned project.

green your school

Our schools hold our most valuable resource, yet not much has been done to date on bringing green practices to mainstream school operations. But now, with recent Ontario government funding and some demonstration projects in the province, there is a growing need to understand how we can make our schools a healthier and more educational place for our children. 

Like all approaches to sustainability, first focus for students, teachers or administrators is getting a solid and well defined plan in place. The plan is the backbone of the initiatives that a school seeks to establish. From starting with a small initiative to a plan that addresses all areas of school life, schools need a clear vision and defined goals to ensure resources and benefits are maximized.

After a plan is developed and agreed to by a board of stakeholders (students, teachers, parents), initiatives can be rolled out as set out in the plan. Results should be monitored to give everyone involved a picture of how well an initiative is working (or not).  Its important to remember that the plan is a living document – if things are a miss, initiatives should be added, revamped,  or removed to respond  to recorded results and impacts. 

There a variety of measures that students, teachers, and officials can implement to green their school, and there are endless degrees of engagement that a school can take on. From establishing extra-curricular green courses or renewable energy projects to simple recycling and resource conservation, with the help of a well developed and well defined plan, schools can have a tailored and dynamic green strategy to help ensure a clean, healthy, and educational environment for our children’s second home.

municipal sustainability

What are northern Ontario communities (and small towns everywhere for that matter) doing to ensure they survive and flourish in the 21st century? A lot of things are done ad hoc. And not to fault municipal leaders, the situations that they sometimes find themselves in are not easy – having to place sparse funds across an increasingly broad set of responsibilities. With the recent amendments to the Ontario Municipal Act, municipal leaders find themselves thrust into the front lines of environmental protection and sustainable development. 

The issue is that these new areas of municipal focus are inherently complex and require attention and detail that most nothern municipal leaders cannot practically provide. It takes a strong and dedicated understanding of legal, technical, and policy elements to effectively address municipal environmental issues. A starting point for any municipal leader is a plan. The Green Municipal Fund will provide communities with 50% of the costs of developing a plan. And the dividends it can provide in terms of establishing sustainable municipal development are endless. A proper framework and plan for municipal sustainability can effectively organize and maximize environmental initiatives and resources, creating secure green jobs and a clean environment for our northern cities and towns.

Our communities are in such a unique position to take advantage of Ontario’s emerging green economy. For most of the 20th century, our cities and towns relied on one or two natural resource based industries to sustain the local economy. Now, more than ever, we are realizing the need for a diversified economy and sustainable jobs. The new economy can help diversify our job base while helping us clean up and revolutionize the natural resource based industries that drive our region, our province, and our country.