Solar Prices Drop -- Blood Pressure Rises

The Ontario government is changing the price they will pay for solar power -- here's what they have to say....

"To help ensure the program remains sustainable the OPA has proposed a new price category for microFIT ground-mounted solar PV projects. Ground-mounted solar PV
projects of 10 kilowatts or less will be eligible to receive a proposed price of
58.8 cents per kilowatt-hour (¢/kWh). Rooftop solar PV projects, as defined in
the microFIT Rules, version 1.4, will continue to be eligible for 80.2 ¢/kWh.

The proposed new price category will better reflect the lower costs to install a ground-mounted solar PV project versus a rooftop project. It will provide a
price that enables future project owners to recover costs of the projects as
well as earn a reasonable return on their investment over the long term."

The business side of me is actually pretty angry with the move. We are getting ready to file an application - taking the cautious approach. Making sure to comb over a number of deals to make sure when we lock into 20 years -- we don't get the short end of the stick. Now - because we have taken the time to do that (which they encouraged) we are out over 20 cents. After all they said the price wouldn't change until October 2011.

That said - I couldn't figure out how they were going to pay 80 cents to begin with. Although - 58 cents is still too high.

This all makes believing what government says pretty tough to do -- doesn't it....

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Permalink Reply by Roadrunner on July 9, 2010 at 10:40pm

A little different than the Pigeon King....the government is the customer and they distribute the electricity to consumers....we will need energy and clean energy - solar makes sense in theory. Because it is so new I think big mistakes can be made...I would rather see the government take a hit for stimulating a new industry with some extra revenue to farmers than have a lot of nice farmers get whacked financially because the Ont Govt thought they were overpaying for clean energy...

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Permalink Reply by Roadrunner on July 14, 2010 at 9:34pm

Looks like OFA is going to fight this change in price....

OFA: Government Can't Rewrite the Deal.

By Paul Wettlaufer, Director, Ontario Federation of Agriculture

Faced with a 27 per cent cut in price on a contract with the Ontario Government for the production of green energy, Ontario farmers question the management of the program and the intent of the government on green energy.

When the government announced its plans to promote and use green energy, farmers lined up to produce solar energy. Then, without warning, the government announced changes to the deal already signed.

Government developed a green energy incentive for ground mount solar and quoted a reasonable price, farmers penciled it out and signed up, leading the way in Ontario's green energy revolution.

For reasons that make no sense whatsoever, the government on July 2 announced it was withdrawing its offer and substituting a lower price. Thousands of hours of research, work with banks, work with contractors, is all for naught for approx 11,000 applicants.

The price was right and now its not.

Not only is this a serious blow to farmers who were willing to make this investment but it could be the death knell for the green economy.

The Ontario Federation of Agriculture will be lobbying the province to ‘grandfather’ all applications submitted up to July 2 for the original quoted price.

Our members have made significant investments in solar infrastructure based on the deal they thought they had with the province. A 27 per cent cut in the price paid for that energy will mean an unacceptable loss.

Honoring the price offered to the applicants who have already made significant investments can be the only accepted outcome.

This is not only devastating to farmers, it jeopardizes the futures of green energy manufacturers.

Cancelled projects will mean lost investment from farmers and loss of future sales of solar equipment.

With this change Ontario will lose millions of dollars in new manufacturing opportunities; lose hundreds of manufacturing jobs; municipalities will forego

millions of dollars in tax revenue; and once again Ontario’s rural economy suffers a "gut shot".

This has shaken the confidence of rural Ontario and investors everywhere.

What's the next rug that will be pulled out from under us on the green energy file?

The designers of the deal understood the economic benefits and spinoffs in jump starting the green economy. The ones trying to tear it down need to recognize the economic damage.

We will be calling on all OFA members to contact their MPPs. We will seek their support of our plan to grandfather the originally-stated rate into all applications submitted up to July 2, 2010.

Farmers have shown good faith and leadership with their involvement in the green energy industry. Now is not a good time for the government to start rewriting the deals.

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Permalink Reply by Joe Dales on July 21, 2010 at 9:05am

Ontario Solar Network is planning a townhall meeting to discuss what can be done about the price changes etc..

Here is the link from the OntAg Events Calendar.

Joe

http://ontag.farms.com/events/ontario-solar-network-to