On Tuesday the Ontario Power Authority (OPA) expanded the Feed-In-Tariff (FIT) Program to allow formal participation of Commercial Aggregators. In so doing, the OPA has added another FIT rate class.
More importantly, this move makes the microFIT program and its benefits more accessible to Ontario homeowners.
When asked for comment on the change, Bernie Li, VP Finance and Co-Founder of PURE Energies, observed,
The CFIT program will raise the visibility of the renewable energy movement in Ontario to the global players. Aggregators will help provide the scale needed to attract the attention of the international vendors, who will open up divisions and subsidiaries in Ontario, thereby creating jobs and building a sustainable industry.”
The greater accessibility is in contrast to other recent FIT Program provisions and proposed amendments that create more red tape, such as the recently proposed Amendment to require Local Utility pre-approval before submitting a microFIT project application.
Red Tape is Expensive
Speaking exactly to the negative impact of this kind of red-tape requirement, last month, the leading US Residential Solar PV provider SunRun Home provided a comprehensive whitepaper on “The Impact of Local Permitting on the Cost of Solar Power”. SunRun observed that “Local permitting and inspection add $0.50 per watt, or $2,516 per residential install.” Moreover, “the total installed cost of residential solar is falling more slowly because of inefficient local permitting and inspection processes.”
While Ontario’s Green Energy Act is intended to create jobs, new jobs from adding more red tape are not what anyone had in mind. Thus steps and initiative that streamline installations and make the industry more efficient, such as the new CFIT Program, are good news and a positive OPA initiative.
The OPA’s new CFIT Program Draft is available for review on the OPA Web Site.
The CFIT rates are lower than the microFIT, reflecting the opportunity to aggregate economy of scale benefits across multiple installations. The proposed CFIT rate structure echoes the FIT rates for the next larger project size.
Ontario FIT Solar PV Tariff Rates
|microFIT (≤ 10 kW)||80.2 ¢/kWh||64.2 ¢/kWh|
|CFIT||71.3 ¢/kWh||44.3 ¢/kWh|
|FIT 10-250 kW||71.3 ¢/kWh||44.3 ¢/kWh|
According to the official OPA News Release, “This program stream is intended for commercial entities with one or more micro-generation projects, those who are not eligible participants for the microFIT Program, and those who wish to take advantage of secured lender provisions not found in the microFIT contract.”
Aggregators Initially Barred
In a surprise announcement this past August, reported by d-bits, the OPA had specifically singled out Commercial Aggregators and restricted them from further FIT and microFIT program activity.
Commercial Aggregators do just that. They contract, design, install and finance residential solar installations for many households. Companies such as PURE Energies provide a no-cost, turnkey solution for homeowners wanting the benefits of solar on their home. Even with Feed-In-Tariff support, solar systems are still expensive and home equity financing can be difficult in a post-mortgage crisis world.
By aggregating contracts with many households, the Aggregator can leverage their knowledge base and their relationships with financial institutions to deliver a high-quality packaged solution without a financing burden on the homeowner.
With the OPA’s decision last August to restrict their participation, the Ontario PV industry was handed another restriction just as it was gaining traction. Toronto is a world finance hub, but the August move reduced the opportunity for Bay Street’s participation in the new industry.
Tuesday’s announcement is good news for Ontario residents, good news for the Ontario economy and good news for the growing Ontario Solar PV industry.