The OPA and Ontario Government have released their new Feed-in Tariff (FIT) rate proposals! If these go through and get finalized (which seems likely), this is excellent news for two reasons – there was quite a bit of uncertainty and several businesses were holding their breath until the new rules were released, and the FIT rates are really good. There’s stuff in there for wind, bio-gas and other renewables, but this is a solar blog, so let’s look at the solar details.
First off, a few terms and a little back ground for people who need it.
Feed-in Tariff (FIT) – A FIT is the price that the government buys power for the grid for special cases. In this case, it means that if you generate power from renewables – solar, wind etc – the OPA will buy the power from you at a higher rate than the cost of electricity. The reason for FITs is that electricity from renewables still costs more than from coal or natural gas. With a FIT, it creates an incentive to generate power using solar energy, and it creates an incentive to sell that power onto the grid. (So you get energy efficiency AND renewable energy, because people want to max out the power they put onto the gird.) Germany and Spain have both implemented FIT programs for solar, which is the main reason those two companies dominate the solar energy industry.
kilowatt (kW) – 1000 watts. This is amount of power that electricity pricing is usually based on.
megawatt (MW) – 1,000 kilowatts or 1,000,000 watts.
kilowatt hour (kWh) – A measure of electrical generation or use. If a clothes dryer used 1000 watts, it would use 1 kWh per hour. (So a 100 watt light bulb uses 0.1 kWh per hour.)
kilowatt hours per kilowatt (kWh/kW) – This is the one that gives me a head ache. Assume you have 1 kW of solar panels, the kWh/kW is the amount of power that you can expect them to generate in a given amount of time – so you can talk about kWh/kW/year or /month or /day etc. In Ontario over the course of a year, you can expect to get between 1100 and 1200 kWh/kW. So, if you went out and bought a 200 watt solar panel, you would need 5 to generate 1 kW of power. If you installed them in Toronto, they would generate roughly 1100-1300 kW, depending on where in Ontario you were. Natural Resources Canada has some cool interactive maps that give you more details, and he’s a zoomed in map of the kWh/kW/year for Ontario. (The small dark patches around Ottawa and Toronto are glitches, but there’s excellent sun in Southern Ontario, especially down near Windsor, and East of Brighton.)
So, FIT Rates. The old rates were 42 ¢/kWh, the new Solar FIT rates for Ontario:
- Less than 10 kW – 80.2 ¢/kWh
- 10 – 100 kW – 71.2 ¢/kWh
- 100-500 kW – 63.5 ¢/kWh
- Greater than 500 kW – 53.9 ¢/kWh
- Less than 10 MW – 44.2 ¢/kWh
The best part is that you’re guaranteed those rates for 20 years.
So what this mean for the average person in Ontario? Well, the OPA gives a good example in their “Backgrounder” document (link to pdf).
For example, a homeowner in Ontario would be looking at a residential scale Solar PV project of about 3 kilowatts, which costs around $30,000. This would provide enough electricity to meet one third of their consumption and would generate about $7 per day. This payment would result in approximately $2,500 in revenue per year for the homeowner, resulting in about a 12year payback. In addition, the government is expected to introduce plans to provide low cost financing for residential renewable projects, including solar thermal, solar PV and ground source heat pumps.
The prices of solar panels are falling and new lower cost technologies – such as our Sun Stream Windows – are coming onto the market. Right now, with this new system, you’re looking at roughly 12 years to pay back the costs, but that’s going to fall, and fall faster because of this program.
For Morgan Solar, our solar windows are going to do extremely well under this program – I’m assuming that their rooftop prices count for wall mounting too, usually rooftop and “Building Integrated” are taken to mean the same thing, but a south facing wall is almost as good for most solar, and better for the Sun Stream. Also, the Sun Simba HCPV system is designed for huge solar farms and raising the rates (and ending the uncertainty) helps us there too. The increase of 2.2 ¢/kWh means a 10 MW solar farm will generate well over $300,000 per year in additional revenue. Basically, this is good news for everyone.
Tyler Hamilton has blogged about the new FIT program, and he’s got an article in the Toronto Star today too. Here’s the OPA’s press release, and here is the OPA FIT Home page. If you really want to go into the nitty-gritty background on this, start here.
So, all in all, excellent news. This will definitely lead to a boom for renewable energy in Ontario and definitely create renewable energy jobs in Ontario. These are the first FIT rates proposed anywhere in North America that are on par with the rates in Germany and Spain. Those countries dominate the solar industry and the FIT rates there are a huge reason why. From what it looks like, Ontario is going to follow suit, and the best part is, these new FIT Rates are only part of what the government has planned. There’s a good article about this on Cleantech.com, “Ontario casts green shadow on U.S.“, which was written before these proposed rates were released.