Solar Power Price Cut Generates Objections (Jul 07, 2010)

More than 10,000 solar applications in Ontario are on hold as the province dramatically drops the price it’ll offer people who sell power from their small, ground-mounted solar panels.

Without the price drop — to 58.8 cents a kilowatt-hour from the current 80.2 cents — Ontario taxpayers would have been on the hook for more than $1 billion more over 20 years, Energy and Infrastructure Minister Brad Duguid said Tuesday. “(It) would have been irresponsible for us to have let it continue.”

But some in the industry say it’s unfair to change the rate after people have submitted proposals for a contract though the Ontario Power Authority (OPA).

“We have a whole lot of unhappy customers right now,” said Bruce Knight, president of London-based Ontario Solar Farms, which designs, sells and installs ground-mounted solar installations.

He said the company has provided about 50 quotes to people who want a contract or are awaiting word on applications they’ve submitted. Many have spent money to ready their applications.

The planned price change — announced to applicants in an e-mail July 2, jammed between the Canada Day holiday and a weekend — came as a surprise because the province had said it would review its terms and policies in September 2011.

But Duguid said the OPA has been swamped by applications and had to do something sooner than that.

Knight said the province shouldn’t be changing its offering price even for applications already in the pipeline.

“It’s not the way normal business operates,” he said.

The solar industry has become super-heated since Ontario announced it would heavily subsidize green energy sources — wind, solar and bio-mass — under a program called a feed-in-tariff (FIT) that also mandates Ontario-sourced parts and technology.

The micro-FIT program, for farmers, businesses and homeowners feeding 10 kilowatts or less into the power grid, has become the most popular.

Micro-FIT producers who already have a 20-year contract at the 80.2-cent rate will continue to receive the original price, the OPA says.

The price for solar installations producing more than 10 kilowatts won’t change, at 44.3 cents a kilowatt hour.

Duguid said owners’ costs for small, ground-mounted solar installations have proved to be lower than expected, so that their annual rate of return is about 25% — a rate that is “way out of whack,” and for which consumers would otherwise ultimately bear significant cost.

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