A total of 872 MW of new renewable energy will be generating power within one to three years in Ontario, from 40 newly-approved renewable projects, according to Energy minister Brad Duguid. Under Ontario’s Feed-in tariff (FIT), above-market prices are paid under long-term contracts for power generated by renewable energy projects.
Ontario offers a generous 44.3 cents a kilowatt-hour for solar and 13.5 cents a kilowatt hour for wind power. The investment will have a negligible effect on individual bills, adding $23 a year (less than $2 a month) for a household using the Ontario average of 800 kilowatt hours a month, according to Bruce Sharp of Aegent Energy Advisors which also advises utilities, cities and businesses on buying power.
The 872 megawatts is comprised of 35 solar projects, generating a total of 257 MW of power, four wind projects, for a combined 615 MW, and one small 0.5 MW hydroelectric project, the first hydro project to be approved in decades.
The generous rates offered have encouraged many more applications than could be connected to the grid, 372 total, of which only 40 could be connected. About 1,000 farmers and others involved in small solar generation projects, far more than the government expected to apply, had to be turned away, after investing money, because it was not possible to connect so many to the power grid. The remaining applications are now under review to see if grid extensions are warranted.
Ontario is becoming a clean energy investment hub because of the design of its Feed-in Tariff policy. Until recently, there have been few companies set up in Ontario to manufacture solar and wind turbine parts – like inverters, panels, racking systems, nacelles, blades and gearing mechanisms. With the pay-for-power policy, that is changing.
To be eligible for the Feed-in Tariff, a set quota of equipment has to be manufactured in the province. This is to encourage the growth of home-grown renewable start-ups, and local solar installation companies have indeed sprung up to meet the demand.
Also, in the 16 months since the policy was enacted, a slew of international companies have announced plans to establish manufacturing plants in the state, in order to qualify, even the South Korean solar panel maker Samsung.
Ontario says that the policy has led to $3 billion in private sector investment in the province. While conservative critics carp about the prices offered as too generous, the results would seem to speak for themselves. Adding just $2 a month to average bills, the cost/benefit ratio seems pretty skewed to the positive.