The Ontario Power Authority keeps looking for ways to reduce the popularity, and therefore the cost, of its high-priced MicroFIT solar electricity program. The program was designed to guarantee renewable energy producers a profit. Since small scale solar PV is the most expensive electricity to produce, generators were guaranteed the highest price, 80.2 cents/ kilowatt hour. This is more than ten times the cost of producing conventional power, and provided an even better profit once solar cell production costs came down. Naturally, the 80.2 cent offer was wildly popular; equally naturally, it has now been cut back.
On August 13, the price for ground mounted solar electricity was slashed to 64.2 cents per kilowatt hour, which should provide new applicants with a much more modest profit. This price applies to eligible microFIT ground-mounted solar applications submitted after noon on July 2. Eligible ground-mounted solar applications submitted prior to noon on July 2, 2010, will receive the original price of 80.2 cents/kWh, whether or not they have received a contract or conditional offer. These applicants will also have until May 31, 2011, to install and request a connection for their projects before higher domestic content requirements kick in. Ground-mounted solar microFIT contracts signed and conditional offers received before July 2 will continue to be eligible for the original price of 80.2 cents/kWh until the end of their 20 year contracts.
New applicants for ground-mounted solar PV panels may be upset over the new lower price, but commercial aggregators are ones with the biggest loss. On August 13, the Ontario Power Authority excluded new projects by commercial aggregators from the microFIT program. Since the introduction of the microFIT program last year, businesses were allowed to lease land or rooftops from individuals for multiple renewable energy projects, while still benefiting from the preferential price and right to connect to the electrical grid. Aggregators who apply for ground-mounted solar projects after August 13 are temporarily suspended from both the FIT and microFIT projects. Those who applied between noon on July 2 and August 13 may remain in the microFIT program and will receive 64.2 cents/kWh. The OPA says that aggregators will still be welcome to “participate in building a clean energy economy”, but on new terms that are less expensive for the ratepayer.
Germany went through a similar process of cutting back expensive subsidies for solar energy after an excess of enthusiasm ran into hard economic times, but they didn’t change their plans as frequently or as fast.