Mike Schreiner Solar MicroFIT Op-Ed
The unexpected announcement proposing to reduce the feed-in tariff rate for small ground-mounted solar projects by 27% has sparked outrage from thousands of farmers, solar energy entrepreneurs and citizens who have invested thousands of dollars in helping Ontario develop a vibrant solar industry.
The Ontario Power Authority (OPA) is expected to announce its final decision later this week, but whatever final decision is reached, the MicroFIT debacle offers important insights into the priorities and values of the current Liberal government as well as lessons for those who support a stable, fair and transparent investment climate promoting sustainability in Ontario.
Last year, the Liberal government introduced the MicroFIT program to stimulate the development of small-scale renewable energy in the province. The program offered landowners who invested in solar energy projects smaller than 10 kilowatts the opportunity to sell power back to the grid at $0.802 per kilowatt hour under a 20-year, fixed price contract. The government said the offer would remain in effect until a review in 2011, and everyone who met the contract conditions would be offered a contract.
The response showed a deep ground-swell of support with over 16,000 applications received by the start of last month and installation companies, distributors and manufactures began investing in staff and equipment to meet the demand.
Then, on the Friday of the July long weekend, Energy and Infrastructure Minister Brad Duguid made the surprise announcement that wreaked havoc in the emerging solar energy industry. The government would no longer stand by its commitment to pay $0.802 kilowatt hour for ground mounted solar projects. Worse yet, this change would be applied retroactively to the nearly 10,000 project owners who had already submitted an application but did not have a contract because of processing delays at the OPA.
The instability and uncertainty created by the unexpected cuts caused a domino effect. Betrayed and outraged project owners, mostly farmers, cancelled outstanding orders. Renewable energy entrepreneurs saw business collapse overnight, leaving them on the hook with millions of dollars invested in inventory and training. Solar manufacturers halted job-creating investments in new facilities. Sadly for some, RRSP investments and savings may be lost.
There is no dispute that the government has the right to review programs based on changes to the economy or budget resources. What farmers and solar energy entrepreneurs have demanded, with the support of the Green Party, is that the government honour it’s commitment to all those who had submitted a contract application by the start of July, and that any review of the feed-in tariff going forward should be done in an open, transparent and predictable way.
Renewable energy, including community-based renewable energy, needs to be a key pillar of Ontario’s energy strategy moving forward. A community focused energy strategy will lead to a decentralized and distributed system of power generation that will be more resilient and secure. Such an approach creates opportunities for every Ontarian to be green energy entrepreneurs generating income and creating jobs in communities across the province. To achieve this vision, the public must demand the Liberal government honour its commitments and support a transparent, open and predictable process.