Looking on the bright side of new microFIT rate;

The Niagara Falls Review: MATTHEW VAN DONGEN AND JULIE GRECO - August 23, 2010

It was a move that could have eclipsed a ground-breaking solar energy program in Ontario.

Launched in Oct. 2009, the Ontario micro Feed-in Tariff program, a cornerstone of the province's Green Energy Act, changed the playing field for sustainable energy generation in the province. By offering 80.2 cents per kilowatt hour for energy fed into the power grid by small-scale solar generators, solar energy wasn't just for big boys anymore. This initiative was targeted specifically to small projects -- homeowners, farmers, small businesses and institutions -- which plan to develop renewable energy generation projects of 10 kilowatts or less.

With new financial incentives to invest in renewable energy, it didn't take long for Ontarians to see the light. Applications flooded in -- about 16,000 during the first nine months.

Then came a dark spell.

On July 2, The Ontario Power Authority proposed a new price of 58.8 cents per kilowatt hour for ground-mounted solar project -- a 27% decrease to the rate that had already been promised for a 20-year period.

The change was said to address many issues. For one, the system was backlogged, having vastly surpassed expectations, and the majority of the applications were for ground-mounted solar projects. Another reason cited was the lower cost of installing the ground-mounted system. And the proposed reduction would also help ensure Ontario families would receive good value for their energy, they said.

For many stakeholders, the high price it offered and the 20-year guarantee were, for many, were the very foundations for the program's success.

"It's all about the way it was handled. It was so abrupt," said Deborah Doncaster, executive director of the Community Power Fund. "The program is stimulating jobs, and it's the most successful implementation of microFIT globally, but it needs to stay around for a while."

Kris Stevens, executive director of Ontario Sustainable Energy Association, also noted the issue of price was overshadowed by the process.

"People have to trust the system because they have to evaluate, 'Can I do the project or not,' " he said.

"If you want people to reinvest in Ontario, put savings into the project, or take out their RRSPs and investments to put into the project, there has to be stability in the market."

The OPA listened.

The Ministry of Energy and Infrastructure announced its changes on Aug. 13. A new microFIT rate for small, ground-mount installations was set at 64.2 cents per kilowatt-hour. Existing applications for these projects would be granted the original price of 80.2 cents. Companies wouldn't be permitted to aggregate projects on different properties at the higher rate.

Tony Iavrone, spokesperson for Horizon Utilities, said that while many customers were disappointed with the price change, he didn't expect it to have a significant impact on the success of the program. So far, he said, there has been a great response in Niagara, with 23 project applications in St. Catharines alone.

"There's a lot of interest in this area, people are interested in going green," he said.

St. Catharines and Niagara, he said, are advantageously positioned. Our rural areas and industrial rooftops are great environments to harvest solar power, he said.

While the new price left many disappointed, at least the OPA's decision to honour the original rate for applications submitted before the rate change didn't leave anyone in the lurch.

And the new transparency of the advisory panel just might restore confidence in the system.

"With industry players now invited to participate, it means, in the future, there will be no more shocks,' said Stevens.