A solar plan overheats - Macleans.ca
 

A solar plan overheats

Ontario admits that its much-hyped energy project was broken and would have cost taxpayers $1 billion


 

DENIS BALIBOUSE/REUTERS

In Ontario, a plan to subsidize homeowners’ solar panels has been too popular. Earlier this month, admitting participation has “vastly surpassed expectations,” the Ontario Power Authority cut the price it pays for power generated from ground-based solar panels. Through the microFIT Program, it had been offering 80.2 cents per kilowatt hour over a 20-year period—about 20 times the going rate for power. Now, under a proposed adjustment, ground-mounted projects of 10 kilowatts or less would get 58.8 cents per kilowatt hour.

High rates were offered to get homeowners on board. But to no one’s surprise (but the government’s, it seems), businesses leapt at the chance, too, leasing farmland and “stacking up 10-kilowatt ground-based arrays every couple acres,” says Joshua Pearce, assistant professor of mechanical and materials engineering at Queen’s University. Farmers who installed solar systems on their fields in some cases earned a tidy profit. Since the program was announced, the cost of solar panels “dropped radically,” falling at least 40 per cent in the past year, Pearce adds, making it even more attractive to speculators.

Since October, the program has received 16,000 applications—the vast majority for ground-based arrays, which “swamped the program,” said Brad Duguid, energy and infrastructure minister. At the current rate, he said, the program would have cost taxpayers more than $1 billion over the next 20 years. Among those most penalized by the about-face will be the farmers who invested tens of thousands in solar systems, expecting to receive the advertised rates of the original plan. (Those who’ve already received a contract offer from the OPA for a ground-based system will be eligible for the original rate, as will all rooftop projects.)

Observers say the plan has been badly bungled. Pearce blames the province for moving too slowly, noting that even the current amendment is now undergoing a 30-day public consultation period before being enacted. If Ontario intends to be a major player in the solar power industry, it will need to give companies assurances it can change with the times, he notes—not shut them down just as the industry is set to boom.


 

A solar plan overheats

  1. Recently the OPA announced a proposed rate change for ground-mounted solar systems that will affect nearly 70% of all microFIT applicants. As if a rate change was not bad enough, the applicants who in good faith applied for contracts as far back as January are going to be retroactively affected by the change should it be adopted. The OPA's proposed rate change has already sent ripples of uncertainty and disappointment through the industry, with the real damage yet to be done. This rate change has the potential to cripple the industry before it has even gotten off the ground. The OPA has described this up and down rollercoaster as “the growing pains of a new industry”. For those who have invested their life savings in projects or built businesses based on the program this is much more than “growing pains”, these are crippling and quite possibly bankrupting blows.

    We are now in the midst of a '30-day comment period' before this change is considered final. Together we must act quickly and decisively with a unified effort to contact everyone who may be affected by this change. We also encourage everyone to contact your local MPP's and inform them of the serious damage this proposed rate change will have, and how it will impact the economic growth and stability in their riding. (http://www.ontariotenants.ca/government/mpp.phtml). We encourage you to make your voice heard by joining the call to action and filling out the petition located through the following link
    http://www.microfitaction.com.

  2. Joshua Pierce was either misquoted or he doesn't know what he's talking about. The microFIT rules are clear. One solar project (not to exceed 10 kW) per deed. The article and indeed the OPA makes it sound like people are making a killing by throwing up solar panels like they were a licience to print money. You are only allowed one system per property and the return is in the area of 11%. Any investor knows that this is hardly the gravy train everyone seems to be saying it is. The real important point here is that the government changed the rules overnight with no warning and no process. That should frighten everyone involved in the Ontario energy sector!__Drew MacGillivray__drewm@endlessenergy.ca

  3. It is interesting that the solar program which might cost $1B over 20 years was "unsustainable" (curious I thought that solar energy was considered a sustainable resource) since paid to small operators. Mean time, the province caries on with the wind turbine plans to install some 6000 MW of wind, and pay the big developers (not small operators this time) like T Boone Pickens or Samsung of Korea about $1B each year, as excess costs of wind versus other generation (and that is for land based turbines, water based are even more excessive.) Biggest trouble is that this expensive generation is not available when you need it – it works best at night, and very poorly in the daytime in hot weather. Supposed to shut down coal, right? Yesterday at noon, all 1085 MW of wind generators now tracked were producing 30 MW in Ontario, while coal generators were producing 3500 MW. A week ago, wind was producing less than 10 MW while coal was producing 5000 MW. If you think that the solar plan was overheated, wait until you see the costs the wind plan will produce – all while putting turbines where they are causing a real problem for rural developers. The overheat will be the tempers of the customers of power … like employers, who will be forced to lay off staff and move where power costs are less.

  4. It is interesting that the solar program which might cost $1B over 20 years was "unsustainable" (isn't solar energy considered a sustainable) since paid to small operators. Mean time, the province carries on with plans to install some 6000 MW of wind turbines, and pay the big developers (not small operators this time) like T Boone Pickens or Samsung of Korea about $1B each year, in excess payments for wind above what other generation would cost (for land based turbines, water based are even more excessive.) Trouble is that this expensive generation is not available when you need it – it works best at night, and very poorly in the daytime in hot weather. Supposed to shut down coal, right? Yesterday at noon, all 1085 MW of wind generators now tracked were producing 30 MW in Ontario, while coal generators were producing 3500 MW. A week ago, wind was producing less than 10 MW while coal was producing 5000 MW. If you think that the solar plan was overheated, wait until you see the costs the wind plan will produce – all while putting turbines where they are causing a real problem for rural citizens. The overheat will be the tempers of the customers of power … like employers, who will be forced to lay off staff and move where power costs are less.

  5. Mr MacGillivray states that "this should frighten everyone in the Ontario energy sector" – well I am retired from the Ont Energy Sector and believe me Mr McGuinty and his posse of clowns have had me frightened for a long time.Only naive and gullible fools would consider solar or wind power worthy of the billions of taxpayers dollars they are wasting on it .
    Mr Cohen seems to think the general public who are being "soaked " for this stupidity should be upset that those proposing to suck money from their pockets will not get quite as much as they thought .Actually if one was to do some homework and basic math the ones who do not get a contract should count themselves lucky –
    Mr Palmer obviously has done his homework and is well in touch with the reality of this huge expensive mess McGuinty
    has imposed upon the citzens of Ontario

  6. The rate cut provoked a massive political response from farmers, homeowners and solar entrepreneurs. Last Friday, August 13, the McGinty government reversed its position and offered the rate originally promised to the nearly 10,000 solar projects which had applied for but not received contracts before the rate change was announced. They also announced an advisory panel to provide more transparency in future rate changes. In the end, the Green Party was the only political party which consistently supported community-based solar energy. The Tories are officially opposed to MicroFIT, while the NDP was silent. It's time for Green MPPs at Queen's Park!

  7. This article presents a number of fallacies resulting in negativity about a program that is beneficial overall. Mr Balibouse suggests our current cost of electricity is about $0.04 which is not true. Current costs from Ontario Hydro amount to almost $0.14 per kWhr when delivery and debt charges are included. It also suggests the OPA is shelling out $0.802 for every kWhr produced in the FIT program: again not true. The microFIT program only offers that large tariff for the projects of 10kW or less, but that is 1-2% of the total wattage planned in the overall FIT program. The real tariff paid out to those investing in the large renewable energy projects is $0.44 per kWhr, and that is the rate that applies to 95% of the projects in process. When you consider the overall costs in the pre-FIT 'grid' from big-capital development and transmission line losses, a price of $0.44 isn't outlandish at all.

    Despite the mismanagement of the program in some areas the FIT program is a bold and beneficial program overall, and shouldn't be misportrayed by Denis Balibouse as 'broken' when he hasn't done his homework. What he is right about is the impact on farmers, in particular, who invested in good faith and were hurt by the tariff turnaround for pole mounted systems. Returning the earlier applicants to the $0.802 tariff is the right thing to do.

  8. Many high profile business leaders have signaled
    their support for clean energy including former Premiers Mike Harris and Erne
    Eves. (http://bit.ly/r0NUfZ)

     

    And now, the Pembina Institute, an independent
    organization, has released a study which says the wind, solar and biogas power
    producers under Ontario’s feed-in tariff program are being blamed unfairly for
    rising power prices.

     

    The alternatives are no cheaper. The FIT program
    would never add more than 1.5 per cent, or about $2 a month, to the typical
    consumer hydro bill, the study says.

     

    Read it here: http://bit.ly/r0NUfZ