The Canadian province of Ontario is about to offer a greatly expanded feed-in tariff (FIT) providing major benefits to homeowners, investors and the solar industry. The sweeping proposal would include a wide range of stakeholders, including homeowners, community groups and large commercial energy producers. Although Ontario has had a form of FITs for two years, they were capped at 10 megawatts. Under the new rates, the cap will be increased for most technologies, making the province a North American leader in renewable energy sources.
The objectives of the FIT are to increase the renewable energy supply, which would help reduce emissions; provide a simpler method to procure green energy generation; create new green industries and jobs; and provide incentives to invest in renewable energy technologies.
The Green Energy Act would combine long-term contracts with stable, competitive prices, establishing fixed prices for all types of renewable energy, including wind (on- and off-shore), hydroelectric, solar, biogas, biomass and gas from landfills. Provincial energy officials expect the FIT to attract investors while creating green jobs. Estimates range as high as 50,000 new jobs created in the first three years.
The proposed FIT prices cover capital, operating and maintenance costs and allow for a reasonable rate of return on investment over an approximate 20-year period. Some estimates show an even shorter pay-back period. The estimated prices are:
- 12.2 cents per kilowatt hour (kWh) for any size biomass project.
- 14.7 cents per kWh for biogas projects less than 5 megawatts in size and 10.4 cents for those above 5 megawatts.
- 12.9 cents for hydropower projects of less than 50 megawatts and 13.4 cents for community-based projects of less than 2 megawatts.
- 11.1 cents for landfill gas projects of less than 5 megawatts and 10.3 cents for those greater than 10.3 cents.
- Solar photovoltaic projects range from 44.3 cents to 80.2 cents, depending upon a number of variables.On-shore wind power projects would receive 13.5 cents per kWh, while off-shore project would receive 19 cents.
Based on its early experience, leaders in Ontario offer these lessons about FITs:
Use reasonable caps. The earlier small-scale FIT was more popular than expected and quickly maxed out.
Monitor the process. Make sure energy companies are able to meet established milestones along the way.
Create a smart grid. Re-engineer transmission networks to accommodate smart meters and intermittent energy flows.
Developers, homeowners or small businesses interested in participating can log on to a dedicated website that will be launched on Sept. 30. The site will provide step-by-step instructions and other materials.
