The proposed change, announced on July 2, will help ensure the program remains sustainable and electricity ratepayers receive good value for new, clean, reliable renewable energy, the OPA says. The new price category will better reflect the lower costs to install a ground-mounted solar PV project versus a rooftop project, the OPA argues, providing a price that enables future project owners to recover costs of the projects as well as earn a reasonable return on their investment over the long term. Not surprisingly, the announcement has been met with stiff objections from a range of affected groups.
The OPA consulted with applicants about the proposed price of 58.8 cents/kWh during the 30 days following the announcement. During this time the microFIT application intake process continued.
“The OPA believes the new price category is fair, reasonable, more accurately reflects the costs associated with ground-mounted projects and maintains the long-term stability of the program,” says Colin Andersen, OPA Chief Executive Officer. “It enables the program to continue to meet its original goals and provides proper value to both generators and ratepayers.”
Under the proposed new price category, ground-mounted microFIT applicants who already have an executed contract or received a conditional contract offer from the OPA will receive the original price of 80.2 cents/kWh, consistent with the microFIT rules. All other ground-mounted microFIT projects, including those for which an application has been submitted but have not yet received a contract or conditional contract offer, are expected to receive the price following consultations on the proposed 58.8 cents/kWh. The 30-day comment period ended on August 3.
The announcement promptly generated a reaction, with rural landowners and farmers saying the new price would hit them very hard. The July 6 issue of Better Farming magazine quoted Chris Weissflog, president of EcoGen energy Inc., as saying the sudden price change will shatter confidence of a fledgling industry. The whole intention behind the demand creation and incentive programs “is to create a stable environment for business to function in,” he said.
An online petition was quickly set up, at http://www.microfitaction.com, to get the OPA to leave the rate unchanged. The petition estimates that 10,000-11,000 of the OPA’s received 16,000 applications are for ground-mounted systems.
Gord Miller, the Environmental Commissioner of Ontario, subsequently wrote that “I agree the microFIT prices should be reviewed regularly. However, the OPA waited until approximately 11,000 applications had been submitted, before announcing a cut in the tariff rate that would retroactively apply to those applications. ... The OPA has not provided enough information to determine whether the new rate is fair and appropriate. After my request for their financial analysis, the OPA, without notice, revised its published rationale for the new rate. The earlier justification talked about the ‘return on investment’ of a hypothetical project. Now it is using the term ‘return on equity,’ an important distinction.”
The OPA held a number of webinars to discuss the introduction of this proposed new price category and answer questions. It has also posted details of the proposed ground-mounted solar PV calculation and a set of related questions and answers at http://microfit.powerauthority.on.ca/Program-updates/detail-propose-rate.php.
On August 13, the OPA announced final prices for ground-mounted PV, some new terms, and the creation of a Micro-FIT Advisory Committee. Then, on August 26, the OPA posted new program documents on the microFIT website to follow the changes to the microFIT Program announced on August 13. These documents include the microFIT eligible participant schedule that identifies which types of applicants are eligible to submit an application to the microFIT Program and the requirements for them. It also includes updated program rules, contract, a summary of the program changes and instructions to microFIT Program applicants for applications submitted before 12 p.m. on July 2, 2010.
The new documents are posted at the following link on the microFIT website:
http://microfit.powerauthority.on.ca/Program-updates/program-eligibility.php
The OPA says that "these changes will ensure that the microFIT Program is focused on its original purpose of encouraging homeowners, farmers, co-operatives and institutions such as schools to own and develop small renewable energy projects."