Toronto: With a new directive from Energy Minister Chris Bentley on July 11, the Ontario government has clarified most of the terms for the next iteration of its Feed-in Tariff (FIT) program. The final step – actually opening new application windows for each of the categories of projects – is expected within weeks.
The Minister’s directive of July 11 revised the system for awarding priority points recognizing Aboriginal participation, community participation and other factors. It also specified how the OPA should deal with applicants in the event that, after a contract is awarded, circumstances change such that the applicant no longer qualifies for the same number of priority points. (It will be considered an event of default but cure periods will be available.) New program rules and contract language were released for discussion in April and the directive will lead to a number of changes in those documents when the program is officially released.
Of great interest to many developers, the directive instructs the OPA to remove a proposed provision that would have allowed the OPA to terminate contracts at any time "for convenience.” This change “will alleviate a number of financing obstacles, and is a significant improvement from APPrO's perspective,” said APPrO Executive Director Jake Brooks.
In terms of how the application windows will be organized, there will be three categories: micro, small and large. First, the OPA will make available opportunities for up to 50 MW of microFIT and up to 200 MW of small FIT projects (which can be no larger than 500 kW). The Minister indicated that the window for submitting applications for these two categories will open as soon as the final FIT 2.0 rules and contract are posted. The application window for larger FIT projects will open at a later date, to be announced. In fact, microFIT 2.0 launched on July 12 and interested parties are encouraged to see the microFIT Program website for details
A statement from the OPA said that the FIT 2.0 program would reflect provincial policy related to protecting agricultural lands by restricting the OPA from entering into FIT contracts for ground-mounted solar PV facilities located on certain classes of land. The direction also prevents the OPA from entering into a FIT contract for non-hydroelectric projects where the proposed project is located 50 km or more from its proposed connection point on the existing transmission or distribution grid. As well, the direction extends the voluntary withdrawal period for existing FIT contract holders to September 30, 2012. The Minister also set up a requirement for microFIT applicants to seek an Offer to Connect within 30 days of the OPA confirming the application is complete.
The directive also began some completely new initiatives. It established a new category of procurement for photovoltaics that are integrated into the design of new buildings – the “Pilot Program for Rooftop Solar Projects on Un-constructed Buildings.” The program is to be running by the end of 2012 with a set aside of 15 MW of the 2013 contract capacity. In addition, a fund of up to $1million was created to help with education related to community power projects.
An article by Thomas Timmins and Kathryn Higgins of Gowlings LLP says, "Although significant panel, turbine and EPC supply opportunities still exist in respect of FIT 1.0 contracts to be fulfilled, the policy complexity and uncertainty associated with FIT 2.0 is expected to slow the pace of new market entry in the province.
The directive is available on the OPA website.
The rules and contract terms for FIT 2.0 were the subject of consultations in late 2011. Recommended terms were released by the Ministry in March 2012 and an initial directive based on those recommendations was issued on April 5. For further information see “FIT 2.0 Program Rules and Contract being finalized,” and “Summary of changes proposed for FIT 2.0,” articles from IPPSO FACTO June 2012.
In a related development a group of co-operatives have established a new umbrella organization, the Federation of Community Power Co-operatives. It is expected to assist groups develop FIT projects.