Ontario’s energy ministry reviews feed-in tariff program

Toronto, Ontario, Canada, April 2, 2012 — Ontario’s Ministry of Energy released the results of the scheduled two-year review of Ontario‘s feed-in tariff program.

The regular review is intended to ensure the continued success and sustainability of the FIT program by examining key issues such as FIT prices and improving renewable energy approval processes.

Ontario’s FIT program was first launched in 2009 to encourage the development of renewable energy by providing standard program rules, standard long-term contracts and standard pricing and by streamlining the approvals process.

The FIT program is also intended to help Ontario eliminate coal-fired generation by 2014 — one of the single largest climate change initiatives in Canada. To date, the province has offered FIT contracts for 4,800 MW.

As expected, the review recommends some key changes to the FIT program, including:

FIT prices will be reduced by at least 20 percent for solar (on average) and about 15 percent for wind. The FIT price schedule will be adjusted annually to reflect then current costs (any price changes would not affect executed FIT contracts); prioritize projects with municipal support and projects with local or Aboriginal equity participation by:

1.     Establishing a points system (otherwise project readiness must be demonstrated),

2.     Setting aside a minimum of 10 percent of FIT contract capacity for projects with greater than 50 percent community and Aboriginal equity participation and

3.     Creating more stringent limitations on assignment and change of control to maintain continued participation; increased land use restrictions to prohibit solar ground-mount projects in or surrounding residential areas or on prime agricultural lands; streamlining regulatory approval processes by up to five months by requiring Ministry comments prior to applications and reducing review times for archaeological reports and endangered species permit applications;

4.     To encourage timely project completion, reducing commercial operation milestone for rooftop solar PV from three years to 18 months

5.     Transition process for all existing FIT applications; program withdrawal available for existing contracts (security fees to be returned); and procurement of 10,700 MW of non-hydro renewable energy generation by 2015.

The review results have been formally adopted by the Ministry of Energy and the Ontario Power Authority is now in the process of completing draft program rules and contracts to implement the recommendations. The OPA has indicated that these drafts will be posted on the FIT and microFIT websites shortly for review and comment.

The FIT program review does not affect existing FIT contracts. This means that the OPA’s existing rules and contract apply to FIT contract holders (whether or not they have reached commercial operation). Existing FIT applicants who have not entered into a contract with the OPA will be subject to the new rules and pricing.

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