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The Ontario Experiment: What the UK Hopes to Learn

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The Ontario Experiment: What the UK Hopes to Learn from Canada’s Solar Industry
22 APRIL 201021 VIEWSNO COMMENT

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Why would a country like Great Britain become so focused on Ontario’s solar energy industry when rival solar hotspots, Spain and Germany, are so much closer?
Part of the answer lies in Ontario’s aggressive solar incentives. The province is certainly not the first to introduce solar-friendly legislation, but few have managed to rival Ontario’s offering. In October of last year, it revised its feed-in-tariff (FIT) language to reflect some of the newer policies outlined in the Ontario Green Energy Act. And in April of this year, approximately CAD$8 billion was awarded to 184 separate renewable energy projects capable of generating 2,241MW of clean energy from biomass, wind, solar, and other sources.
Because of the size and scope of Ontario’s solar push, countries like the UK are naturally interested in how the province’s incentive programs and renewable energy projects pan out.
A New Feed-in-Tariff’s in Town

Of particular interest is Ontario’s revised FIT program, which allows residential, commercial, and utility power producers to sell electricity back into the grid at pre-determined rates. The province launched a similar program in 2006, but the actual payment schedule was deemed insufficient for encouraging widespread adoption of renewable energy technologies. The rates are much more generous under the new revisions, with smaller power producers able to sell their electricity for as much as 80.2 cents (Canadian) per kilowatt-hour and larger producers able to sell theirs at 44.3 cents per kilowatt-hour. Both of these rates are well above the market price per kilowatt-hour.
Another key revision under the 2009 feed-in-tariff program says that applications for projects up to 500KW need not include detailed impact assessments before plugging into the grid. Such assessments are cumbersome for all power producers, but this is especially true for smaller stakeholders who lack the legal and financial resources to include comprehensive assessments during project analysis.
It is not difficult to appreciate the UK’s interest, nor can one fault it for its caution. However, not everyone is waiting to see how the Ontario experiment pans out. Korea’s Samsung recently announced a CAD$7 billion deal to build 500MW of solar and 2GW of wind capacity in the province, making this the largest single investment in Ontario’s renewable energy history.
Here again, Samsung’s involvement could provide ample data for those watching on the sidelines. To qualify for some of the incentives mapped out by the Ontario Power Authority, foreign companies must adhere to strict guidelines governing the origins of their inputs. Currently, 50% of all parts and labour must be locally sourced from within the province to qualify for FIT status. By next year, the quota will jump to 60%. Samsung’s ability to navigate such restrictions could have repercussions across the industry if other solar nations decide to incorporate similar guidelines in their own legislation.