Solar rate cut a blow to green energy

Ontario microFIT solar rate cut reduces the feed-in tariff for new ground-mounted solar PV to 58.8¢/kWh, while rooftop systems keep 80¢, sparking farmer backlash, contract concerns, ROI debate, and renewable energy policy scrutiny.

A decision by the Ontario Power Authority to change the rules surrounding solar power production is drawing opposition from the solar energy industry.

On July 2, the authority quietly announced the rate being paid to some producers would be slashed from 80.2 cents to 58.8 cents per kilowatt hour, even as industrial users face higher hydro costs across the province.

Bill Murdoch, Progressive Conservative member of the legislature for Bruce-Grey-Owen Sound, says many farmers who have invested up to $100,000 in solar technology are going to be hurt by the reduction, and some homeowners may also end up covering related costs through their hydro bills.

But Energy Minister Brad Duguid points out that those who already have contracts will continue to get the higher rate.

Mr. Duguid said that the new rate applies only to new ground-mounted systems and those planning roof-mounted installations will still get 80 cents per kilowatt hour under the microFIT program.

Mr. Duguid said microFIT would have become unsustainable if the original price structure had been maintained.

But John Verway of Copperhill Alternate Energy calls the proposed rate change counterproductive amid sector uncertainty affecting Ontario's solar industry.

“Please do not allow a misguided and miscalculated change to destroy the progress so many have made so far,” Verway said in an open letter to Premier Dalton McGuinty.

“The jobs we have created will be lost and the confidence of manufacturers wanting to establish here will be irreparably damaged,” he said.

Due to the lower installation cost of ground-mounted systems, Mr. Duguid said profit margins under the 80.2-cent payment were in the 25 to 30 per cent range.

“A profit margin in the 10 to 11 per cent range... is what the program was based on,” he said.

Mr. Duguid said he doesn't anticipate the lower rate will discourage applications to the program, even as smart meter results frustrate many consumers.

“The rate of return is actually very generous even under the new proposed tariff.”

Mr. Verway disagrees.

“Customers are calling and cancelling orders, not changing to rooftop systems,” he said.

Mr. Murdoch said the rate reduction proves the Liberal government does not care about rural Ontario.

Mr. Duguid called Mr. Murdoch's comment “irresponsible” and said the change has “nothing to do with rural Ontario versus urban Ontario.”

Mr. Verway has started an advocacy group called Farmers for microFIT to lobby government members to “honour their commitment” to those who have responded to the program, and at a solar protest meeting he pressed those concerns further.

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