Uneven progress on renewable energy


The biggest story you probably didn’t pay much attention to this week was Ontario’s plan to let homeowners, farmers, companies—anybody really—sell renewable energy onto the provincial power grid. This development makes me wonder why the federal government isn’t getting behind the international push to carve out a much bigger place for renewables in the energy marketplace.

Install a solar system on your roof and, under the Ontario government’s proposal, you’ll get 80 cents per kilowatt hour for any electricity you can’t use, which is far more than the going rate for, say, nuclear or conventional hydro power. Farmers will be offered a premium too, though it’s not quite as lucrative, for power from manure, as will entrepreneurs who sell wind-farm electricity.

Is there any doubt this is the way to go, as Europe has shown and the U.S. is learning? In the Washington, Congress is looking at a proposal to give Washington the authority to make sure renewable energy can be sold onto major power grids, even if states don’t want to play ball. President Barack Obama will need that sort of clout to make good on this pledge to double renewable electricity by 2012.

While Ontario’s move might amount to a policy turning point, Ottawa’s passivity on this major policy front remains a puzzle. Finance Minister Jim Flaherty’s January budget failed, for example, to put any new money into Ottawa’s already oversubscribed program to subsidize new renewable power sources.

That means if you have a wind or solar project in mind, you’re out of luck. Earlier entrants into the renewable energy business are in line ahead of you for a taste of the $1.48-billion federal ecoEnergy for Renewable Power fund. There’s no more money going into the program as the renewable sector expands.

And this isn’t a case of the Conservatives letting a Liberal scheme they can’t claim ownership of shrivel: Harper unveiled this program with justifiable pride back in early 2007. Yet the Tories seem to have lost enthusiasm for it.

In Washington, it’s quite another story. Obama’s stimulus package allocates $76 billion for renewable energy and energy efficiency. The U.S. government already offers a tax credit of 30 per cent of the cost of installing new solar panels, wind turbines, and other renewable energy systems.

There’s nothing like it in Canada. For instance, the federal ecoENERGY Retrofit program, which sensibly pays grants to property owners who boost the energy efficiency of their homes, doesn’t cover home solar or wind generating systems. Surely if investing in a more efficient furnace or better ceiling insulation deserves a grant, so does buying the gear to generate your own clean power.


Uneven progress on renewable energy

  1. I’m pretty sure that 80 cents per kWh is the most generous subsidy in the world for rooftop solar PV – kudos to the Ontario government for finally getting serious about backing alternative energy in a meaningful way.

    • As early as the mid 1980s, people were lobbying the Ontario government to launch alternative source projects (co-generation comes to mind) but no dice. I can’t tell you the reason, but I suspect it was resistance from the then powerful Ontario Hydro bureaucracy. Why people resist meaningful progress that benefits their communities and embrace meaningless posturing that wastes precious time and treasure will forever remain a mystery for me.

  2. Yup – but the thought of Jim Prentice asking George Smitherman for advice on Energy and Infrastructure is the equivalent of say – Bernard Landry asking Michael Sabia about pur laine!

  3. This is a definite improvement on the Ontario government’s Standard Offer Contract, already a very generous subsidy for home solar electric installations, which bought all electricity you generated for about 42 cents per kwh. (You would have a double meter installed, and you get payed 42 cents for every kwh you generate, while you only paid about 8 cents for every kwh you consumed).

    John, your post suggests you only get 80 cents for what you don’t use – I suspect the government, being somewhat enlightened on matters of renewable energy (although still, sadly, addicted to nuclear in a big way) actually is going to do the two-meter solution for this version just as they did for the original Standard Offer Contract – it just makes the most sense.

    By the way, for anyone considering doing this, two warnings: first, make sure you deal with a reputable company and get plenty of references. There are often problems with solar installers getting all the necessary permits. Never pay them more than a small deposit until all the permits are signed and the inspections complete. I’ve heard of installations that were left unapproved for months because the homeowner paid and the installer hadn’t gotten all the inspection approvals.

    Second, be prepared to wait for the 80 cent per kwh deal. I know at least one person who tried for the Standard Offer Contract and was still waiting a year later to hear back from the government. It seems none of the bureaucrats quite knew how to handle the rebate application. Hopefully by now with more people doing this, they have figured this out.

  4. This made me happy: ” Install a solar system on your roof…”

  5. if we want to make a change, we have to invest our own money. i work in oil related industry(the energy sector), and these are the companies that should be lobbied into devoting a certain percentage of income towards sustainable development; but they aren’t. so i choose to spend my mortgage(which everyone has), on renewable sources and techniques such as solar PV and wind for electricity, composting sewage(which is easier, cleaner and cheaper than septic), and rainwater collection because Mother Nature is a pretty damn good purifier. We don’t have time to wait for the gov’t to make it finacially viable, along with corporations, they are the ones who put us in the situation of global warming and economical meltdown in the first place. Monetary compensation isn’t a reason to wait to make renewable enrgies our primary source, its an excuse. the amount spent on mortgages, if only invested into sustainable dwellings, could change the way we exist, and most of all, reduce the amount we have to work. Leave the constitutional red tape behind, you won’t only save yourself, you’ll save the world.

  6. I hope the current generation of solar panels is cheaper than they were when I last looked – leading up to Y2K when I thought it would be advisable to have some backup….

  7. Of course – doesn’t matter how cheap and economical – Randy Hillier still won’t let them on HIS land!

  8. I’m not sure direct subsidy/tax credit is the way to go on household renewables (apart from the initial pilot projects where I believe the $1.48-billion went – note: pilot projects)

    One has to keep in mind that the $0.80 per kw-hr is NET energy provided to the grid (what you deliver to the grid less what you consume from the grid). So, if you are still consuming an average of $1,000 kw-h per month in your home with the solar panels connected, you are only avoiding (saving) the $0.15 per kw-h Ontario Hydro etc charges you.

    New construction in Canada may make sense from the homeowner’s perspective- as the retrofit costs would be low ( just part of the electrical work – but broader in scope) – but I have my doubts that many homeowners will pay off their solar installations even with the $0.80 per kw-h NET subsidy. Most first movers on this will be doing it based upon green ideology, or have lots of money (fashionable to be green) – in which case a direct subsidy would be wasted. Maybe later if the costs of manufacture/installation don’t drop appreciably.

    The economics are quite different in Germany, however, when the avoidance costs are in the order of $0.40-$0.45 per kw-hr. Then it would make sense to go for a bigger installation and sell some back to the grid. They have also laws in place to phase out nukes which don’t exist in Ontario- and have limited other energy sources (gas from Putin?) so there are some other factors in play there.

  9. I give up on this website for a while. Too many lost comments of late.

  10. "President Barack Obama will need that sort of clout to make good on this pledge to double renewable electricity by 2012." I'm waiting for that to happen.

    "30 per cent of the cost of installing new solar panels" That awesome. I still need the source, so I could get tax credit.

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