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Ontario softens planned rate cut for solar farms

Ontario farmers planning to get in on that province’s microFIT program for ground-mounted solar power installations can expect a lower rate than their early-bird neighbours, but not as low as first proposed.

And commercial aggregator companies that had been leasing farmers’ land or rooftops for solar panels or other renewable energy projects will no longer be able to take part in the program, the provincial power regulator says.

Wrapping up its 30-day consultation period, the Ontario Power Authority (OPA) on Friday finalized the price it will pay for power from ground-mounted solar installations through microFIT, at 64.2 cents per kilowatt-hour (kWh).

OPA will accept new microFIT applications at the new rate beginning Aug. 20.

The new rate is still well down from 80.2 cents/kWh, which OPA said Friday it will continue to pay to those who submitted their microFIT applications before July 2, regardless of whether they had a contract or conditional offer from OPA by that date.

However, it’s up from the 58.8 cents/kWh OPA had proposed July 2 when it launched its consultations.

The new price category is effective immediately for eligible projects with applications submitted after noon on July 2.

Ground-mounted solar microFIT projects with contracts signed and conditional offers received before July 2 will continue to be eligible for the original 80.2-cent rate.

Applicants who beat the July 2 deadline now have until May 31, 2011, to install and request a connection for their projects before “higher domestic content requirements” are required, OPA added Friday.

“Protecting ratepayers”

The new 64.2-cent rate “strikes the right balance between providing a reasonable rate of return to electricity generators and protecting ratepayers from higher than necessary electricity prices,” OPA said in a release Friday.

Also, OPA said, the final price “incorporates a wider variation of cost inputs and project configurations, including higher operating and maintenance costs for ground-mounted tracking systems.”

According to a feature on microFIT in the June/July issue of Country Guide, the higher 80.2-cent rate, locked in for 20 years, is 10 times more than the province currently pays for electricity from its hydro, nuclear, coal and natural gas generating stations.

Program participants who were able to lock in at 80.2 cents can expect an estimated rate of return of 11 per cent on their investment, the Guide noted.

OPA’s announcement last month that it would pay a lower rate per kilowatt hour drew criticism from several corners, including the Ontario Federation of Agriculture (OFA).

“Honouring the price offered to the applicants who have already made significant investments can be the only accepted outcome,” OFA director Paul Wettlaufer wrote in a recent commentary.

“Original purpose”

Among other changes to microFIT based on its consultations, OPA announced Friday it will now bar commercial aggregators from taking part in the program. Aggregators are businesses that lease land or rooftops from individuals for multiple renewable energy projects.

“This will ensure that the microFIT program is focused on its original purpose — encouraging homeowners, farmers, farm co-operatives, First Nations, small businesses and institutions such as schools, to own and develop small renewable projects,” OPA said Friday.

OPA also said it will set up a microFIT program advisory panel of stakeholders, industry representatives and academics, to advise on the program’s “evolution.” The panel will be asked to make “expedited” recommendations on contracting provisions for aggregators.

Almost 19,000 microFIT applications have been submitted since the program was launched less than a year ago, OPA said Friday. Of those, over 6,100 conditional offers have been sent to applicants and almost 800 projects are now feeding power to Ontario’s grid.

Most ground-mounted applications that have been submitted will be processed by the end of September, OPA said.

OPA said it will host a webinar on Aug. 18 from 2 to 4 p.m. ET to answer questions about the finalized price, the advisory panel and other program details.

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