Ontario: A complicated new frontier for PV

First came the announcement, then came optimism, then came the announcements, then came the reality checks and finally, the changes to Ontario’s wildly anticipated feed-in tariff; not to kill it off, but to control it and, hopefully, help develop a sustainable market.

Historically, Canada has been a market for remote (habitation, industrial and consumer power) applications with relatively low cumulative installations of around 57 MWp - as of 2008. In 2009, demand in Ontario was 60 MWp.

In 2008, 57% of Canada’s demand was for grid-connected PV, and this increased to 91% in 2009.

Though the Ontario FiT was anticipated with frenzied enthusiasm, the program was beset with problems before it began, and solving those problems has proven complex for the Ontario Power Authority (OPA). Months later, optimism remains high, but insufficient transmission has controlled growth of multi-megawatt systems, while the over-subscribed microFiT program is experiencing a rapid degression of its tariff rate.

The OPA was created in 2004, has an AA credit rating and reports to the Ontario Legislative Assembly through the minister of energy and infrastructure. OPA acts as the buy side for the four entities that were created when the heavily indebted Ontario Hydro was broken into four entities.

The most supply potential in Ontario for renewables is in the northern part of Ontario, while the demand is in the southern part of the province. Unfortunately, there is currently insufficient transmission to achieve Ontario’s plans to ramp down the use of coal and nuclear in Ontario - and ramp up the use of renewables. Over the next 20-years Ontario plans to replace 20-gigawatts of its current coal/nuclear production. Transmission expansion (supply = north, distribution = south), will move forward, but before it does, case by case transmission analyses must be undergone, and solar projects (specifically, multi-megawatt projects) will not move forward until transmission is in place.

For large projects, the generator must pay for the line and the upgrade. On the distribution side, the generator pays for the line, but other costs ripple through the entire system (the ratepayers). Projects must pass the transmission availability test (TAT), the distribution availability test (DAT), and the economic connection test (ECT).

Projects that pass the economic availability test will move to the FiT production line and wait until the required upgrade (or build) has received the necessary approvals, and the OPA is reasonably certain that the upgrades will be completed in time for the project to meet other milestones. Projects not passing the economic connection test will wait in the FiT reserve, which may prove to be a sort of project limbo.

Projects falling into the FiT reserve category may withdraw the application, forfeit the time stamp, and receive a refund of the application security. Projects >10-kWp have a requirement for 50% domestic content if put into commission before 1 January 1 2011, and after this date the requirement increases to 60% domestic content. As Canada has not historically had significant cell and thin film technology manufacturing, this requirement may be met by modules assembled in Canada, with cells produced elsewhere. 

Table 1 provides the parameters for the TAT, the DAT and the economic availability test.

TABLE 1  PARAMETERS FOR OPA TRANSMISSION AVAILABILITY, DISTRIBUTION AVAILABILITY & ECONOMIC CONNECTION TESTS*

A project’s date of planned commercial operation is extremely important to its place on the FiT queue. Applications with a specific, accelerated date for commercial operation have priority with all others awarded FiT according to a lottery. OPA plans to complete the first ECT sometime during Q1 2011.

TABLE 2 ONTARIO POWER AUTHORITY FEED IN TARIFF*

*Information current as of report publication

1. In July 2010, the OPA the OPA and the provincial Ministry of Energy and Infrastructure announced that rates for ground-mounted solar projects under the micro feed-in-tariff program (microFIT) would be reduced to $0.588 cents CAD/kWh to be implemented in August 2010.

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