Toronto, ON, Canada — (METERING.COM) — March 13, 2009 – Ontario is set to introduce a feed-in tariff to encourage the development of renewable energy from a diverse range of producers including homeowners, community-based groups and larger scale commercial generators.
A first for North America, the feed-in tariff will establish prices for energy generated from a range of renewable sources, including shore-based and offshore wind, hydroelectric, solar, biogas, biomass, and landfill gas.
Proposed feed-in tariffs range from just over 10 cents (8 US cents) for large biogas and landfill gas projects up to more than 80 cents (62 US cents) for small rooftop solar photovoltaics (PV), with the aim of kickstarting the solar PV industry in Ontario. If the proposed feed-in tariff program were to lead to 100,000 residential solar rooftop installations, this would amount to one percent of the province’s supply mix.
“The proposed feed-in tariff program would help spark new investment in renewable energy generation and create a new generation of green jobs,” said George Smitherman, Deputy Premier and Minister of Energy and Infrastructure. “It would give communities and homeowners the power and tools they need to participate in the energy business in the new green economy.”
The proposed feed-in tariffs were developed based on experience in Ontario and in other jurisdictions. They cover capital, operating and maintenance costs and allow for a reasonable rate of return on investment over an approximate 20-year period. They also provide special categories for community based projects.
Based on current costs these tariffs provide a payback period for a typical renewable installation of 10 to 12 years.
The feed-in tariff forms part of the proposed Green Energy Act (GEA), which if passed, is intended to establish Ontario as a leader in renewable energy and drive green investment and job creation in the province (see New “green” legislation for jobs, renewables, conservation and smart grid proposed in Ontario). Additional changes proposed under the GEA would also make it easier and faster for projects to get connected to the grid.
The OPA will begin an eight week consultation on the proposed design of a FIT program, including eligibility criteria and proposed pricing, next week.
If the Green Energy Act is passed, the OPA would expect to be in a position to quickly implement the FIT program around mid-year.
In 2008, 25 percent of Ontario’s electricity generation came from renewable energy sources. Investments in new renewable energy projects already in place or under construction in Ontario total about $4 billion.