I must say, that the OPA has shown me today that they are really committed to the FIT program that was launched October 2009. If you have read my last number of blog entries, you will know what I thought about their proposal, and it wasn't pretty. The announcement today, while not as good as hoped, was better than I expected. The ideal situation was that the OPA would have left things as they were until October 2011, the planned review date. The worst case scenario was that the OPA would have implemented what they proposed.  One choice would have seen the OPA loose, the other, the public.

The OPA instead implemented a fairer 3rd solution. There is good news and not so good news. First if you were proactive and applied for a microFIT ground mounted contract before July 2nd, you will get the old rates of 80.2 ¢ /kW. All ground mount applications on or after July 2nd, will get the new rate which is 64.2 ¢ /kW. This rate is 5.9 ¢ /kW more than expected, so it helps provide a more reasonable return on a ground mount investment.

Additionally, the OPA has extended the current microFIT domestic content requirements to May 31, 2011 for ground mounted projects, siting the delay in processing applications that the review process caused.

Who lost out, were companies that were intending to lease property to install ground mount microFIT installations on. I had heard rumors of 1 or 2 companies that had submitted between 1,000 and 4,000 applications. This was an obvious case of building FIT sized projects at microFIT rates, and was also rumored to be the reason for the rate change and review in the first place. Now essentially, you need to be the property owner to apply for a microFIT project.

After facing the possibility of the original OPA new rate category, I must say that their decision takes individuals and businesses concerns more to heart than I expected. I think that it is great that people that took initiative and had applied for contracts before the proposal, are able to complete their projects under the terms that they started it on. I am sorry that many people that chose to sit on the fence, lost out on the opportunity that the original rate offered, but feel that they can still do well, at the new rate. 

In my mind, this is happy ending for people that seized the opportunity when they realized it.

One last thing to keep in mind going forward. I expect that rates will continue to drop, as production of solar equipment in Ontario grows and prices come down. You can choose to wait until the next review date, currently scheduled for October 2011 as far as I know, or you can decide to act and take advantage of the 64.2 ¢ /kW rate that is available now.

There is no cost to apply, and you have 12 months from the time you receive your offer to install your system. This gives you some flexibility to shop for a bargain, but without applying and getting an offer, you are subject to any change that may happen to the program (as this new rate category proves).

For complete details on the new rate category decision, visit the OPA website here...

If you would like help on completing a microFIT application, contact me, I am happy to help.

I had to take a break from thinking about the OPA actions regarding the proposed rate change for ground mounted PV solar. The ripples I am feeling and the discussions within the industry are completely negative. This is poised to impact the program, as well as the economy of Ontario.

I urge every reader to take 3 minutes and sign an online petition to be presented to the OPA on July 26th. While they are not responding to individual emails sent to them, I know as they have not responded to a few I sent, hopefully they will recognize a petition with hundreds, or thousands of signatures.

If you are being affected, or know someone that would be affected, or someone that is not going to participate in the microFIT program because of this action, encourage them to sign the petition.

We have an opportunity to impact this decision, if we work together:

http://www.microfitaction.com/

This is really hard to write, because back on June 4th I blogged about how the industry should empathize with the OPA's situation having thousands of applications to process, and how we should be appreciative of the opportunity they offered us.

Over the last few days, I have really done an about face, because I now understand that the delays were not due to application volume, they were due to the OPA planning to screw the applicants of the microFIT program. I was blindly supporting the OPA based on a trust that they were really interested in the Green energy program that they were promoting succeed. Today I understand that this is not the case.

So to all those that saw through the veil of crap that the OPA was feeding us, I say that I am sorry for having believed the propaganda. You were right to call the OPA on this, and I was fooled.

Shame on me.

Today another manufacturer told me of $55 million in sales lost to the OPA change in microFIT ground mounted pricing. This is just a sign of news I expect to hear more about from within the industry as time goes on.

Unfortunately I don't believe that the OPA understands the severity nor the full implications of their proposed rate change. If this goes through, the OPA and the Ministry of Energy and Infrastructure will loose all credibility within the solar industry.

Many people in the industry assumed that rates would change when the planned 2 year review took place, but for the OPA to decide to change the rate, because people are expected to (in their estimation) earn too much from ground mount installations says, we'll lower your rates, whenever we want, without consideration for your plans.

I am not sure how FIT sized projects can assure their investors that they they will earn a reasonable return, when the OPA could change their rate at anytime. I also don't know how microFIT project developers could make plans to proceed, when the rate may change again tomorrow.

Every project takes time and money to develop, and now no one can proceed on a project because there is no assurance that any rate will be available before they get their contract offer. We cannot make plans, discuss income projections with banks and financiers, because everything we plan could change tomorrow. No longer is the fact that we have applied any assurance that we can make plans, we will need to wait and see what the rate will be when we finally see the OPA offer.

And what if the OPA would say, go ahead, make your plans, everything is good to go. Who will believe them after a rate change? The fact that they did not even say that all the applications in the system would qualify at the rate they applied at, no they said that only those they had approved would get that rate. This is further unsettling news. The fact that, our applications have been we held up for 3-4 months, is just our tough luck, all we can expect is today's rate, or tomorrow's rate or whatever rate we decide to offer when we finally get around to processing your application.

Oh, and another thing. When the OPA states that we will process your application in 30 days, that's just crap too, because we will really process your application whenever we want, so that it suits their plans. And don't forget, that the rate you apply at, really has no relevance on what rate you will get. We just make them up so that we can lure you, and international manufacturers into our province. The OPA obviously has no consideration for anyone's plans, just their own.

I have tried to teach my children as they grow up, to understand what an important thing trust is. We begin relationships trusting one another, but when one person breaks the trust, it takes a very long time before the other party begins to trust again. While the OPA stated that they could change the program at anytime, no one could have guessed that they would lower a rate because we would be making too much money, doing what they said. To me, this is a trust broken, and I am sure that many others that were making plans on developing microFIT projects based on trust in the continuance of the program during the first 2 years, feel betrayed as well.

I urge you to share these feelings with your MP. I don't think that the government should feel that their betraying our trust is something we will let happen without an issue.

Faster than the solar industry is built in Ontario, it begins to fall apart.

Today we lost over a million dollars in business because yesterday, the OPA proposed a rate reduction for ground mounted microFIT projects. This was no small drop, this was not an expected drop during their 2 year program review, this was over 26% out of the blue!

The claim is that in keeping with the spirit of the program, they needed to reduce the rate for the program to be sustainable. Translated this means that because you and I have worked hard over the last 9 months to bring the cost of solar down so that we can make a decent return on the second largest investment most will make during their lifetime (besides buying a house) that we would be earning too much. Because of our efforts, the OPA is reducing our potential income by 26% percent!

The ripple effects throughout the Ontario solar industry are expected to be huge. How can a manufacturer consider investing in setting up a manufacturing facility in Ontario, when they cannot even rely on the government to continue a program on the time-line they have laid out? How can a manufacturer plan to be in any long term business, that will really benefit Ontario, when the OPA along with the support of Ministry of Energy and Infrastructure have chosen to change the program in its infancy.

They will not. There will be no long term benefit to the people of Ontario. What will happen is that a few mobile manufacturing facilities will setup in the province to suck out as much business as they can, then when the program has been totally devastated by the OPA and the Ministry of Energy and Infrastructure, they will leave. 

What we will have done is paid foreign companies for the products that we buy, and we will pay foreign companies for the green energy that they supply us for the next 20 years. Colin Anderson of the OPA and Brad Duguid the minister in charge of Energy and Infrastructure should rethink their proposal. Tell them what you think!

Hopefully it's not too late to salvage the industry, but I have my reservations.

Today the OPA announced a new rate of 58.8¢/kW for ground mounted microFIT installations citing the success of the program (lots of applications), with the majority of them being ground mounted as the reason. They go on to say that for the program to be sustainable, the new rate for lesser costing ground mount projects be reduced, but that it will still offer future project owners to recover cost and earn a reasonable return over the long term. In addition they cite that the program was designed on the principal of a reasonable rate of return.

They go on to say that the Ministry of Energy and Infrastructure supports this decision because it ensures that the microFIT Program is meeting its program goals and is providing proper value to generators and ratepayers. The OPA believes it is in the best long-term, sustainable interests of the program, generators and ratepayers that a proposed new price category be created now so the program can realize the value it was intended to deliver.

What crap!

First of all, the program is not a success, unless the purpose of the program was to collect a few applications. Maybe as the OPA chose not to impose any fee to apply, their purpose was only to collect applications, if so then the program has been a moderate success. I would not say that in a province with over 12 million people living in it, having only 16,000 applications would constitute a success. To put it in perspective, this is akin to the city of Cobourg applying for microFIT applications, not Toronto, Ottawa, Hamilton, Windsor, Thuinder Bay, etc.

The next question is, how many of these applications have been connected to the grid? This to me would be the true indication of success of a program. How many thousands of microFIT producers are connected up right now? I have spoken to many people in the industry and we expect that only about 30% or less of the applicants will actually connect to the grid. This would bring the number of microFIT projects down to about 4,800 given the number of applications. So although a city the size of Cobourg may have applied, less than 1 in 3 is expected to follow through. This is because the cost of solar PV is so high. So is this the success of the program that the OPA is claiming, that less than 1 in 3 people in a city the size of Cobourg connect to the grid, out of the whole province of Ontario?

And what about the cost factor cited as the reason for a lower rate for ground installation? I am not sure about other installation companies, but it costs more for a ground mount system here than a rooftop system. Our rooftop system is the least expensive system we sell, so how does the OPA come up with this information? If a generator (this is what you are referred to by the OPA if you sell power to them) builds their own racking out of say wood (that will last 20 years, ha) and screws on their own panels, and connects up their own wiring, it would cost less than a rooftop system. If this is how they determine that it costs less, than I wonder why they should penalize the hard working people of Ontario that try and do it themselves, to be able to afford a system, by lowering the rate. This lower rate translates into about $60,000 less over the 20 year contract on a 10kW ground mounted system. I would like to know how someone building a system themselves could save $60,000.

And why should the rate for a microFIT on the ground be any different than microFIT on a roof? An individual is already limited to a microFIT sized project, so why should they restrict the rate as well? Didn't they plan for this when they determined the system size and rate?

I have been receiving a number of comments from customers, prospects and manufacturers as a result of this announcement. Customers are wondering why they are being penalized for planing a ground mounted system, while manufacturers are saying that in addition to the problems caused by the OPA's inability to process applications on the time-line they stated, this lower rate will kill ground mount microFIT projects.

When I started this business, I thought that this provided Ontarians a good opportunity to participate in producing Green Energy for the province. While microFIT projects do not produce more than what 1 – 1.5 typical households consume, the fact that we could participate and earn a very conservative business income made this an appealing investment. Backed by a Government contract for 20 years, assured participants that they could recover their investment. Now they are changing the rules, even before the program reaches their own stated 2 year review.

Is the OPA trying to sabotage green energy production in Ontario? Most residential rooftops cannot accommodate a 10 kW system, which means that only ground mounted systems could produce this. Does this mean that they really don't want to produce green energy, or do they just not want to have individuals produce this? The government has been very quick to announce large scale PV and renewable energy projects, with foreign companies. This is not great, because what they are doing is selling off the opportunity for Ontarians to benefit, in exchange for green volume from foreigners. I don' t think that this spells success for Ontario.

I expect that this will also limit PV solar manufacturing moving into Ontario. With a 60% domestic content requirement coming into effect in January 2011, I was looking forward to seeing new industry open in Ontario. The fact that a majority of applications will now never be completed, should cause manufacturers to take a hard look at opening factories here. I know that if I were a manufacturer and I saw that the government thought that 16,000 applications were too many, I wouldn't open up here. There isn't enough business today, nor enough coming tomorrow to warrant it. I urge you to contact your local MP about this decision. It affects not only today's generators, but Ontario's future Green economy as well. If the majority of microFIT applications are for ground mounted systems, and the OPA killed ground mounted microFIT projects by lowering the rate, what then will continue this Green economy? If we aren't placing orders, we aren't buying parts, and we aren't making parts, so we aren't employing people to build them or install them.

Ask your MP to request that the OPA keep their rate structure for the first 2 years, then assess the number of microFIT connections, before they determine the impact that the current rate structure has. At least they can let the industry get started, before they kill it.

If you have been following my blog here, you will know that I am not a fan of fast talking sales people that are just interested in getting your business.

I am interested in making happy, long term customers. You are entering into a relationship with your solar system salesperson/installer that will last 20+ years. I have decided to start that relationship by not showing you the moon and the stars, as I realize that if I promise you all that, then don't deliver, we are going to have a bad relationship.

I provide you an income estimate, using PVWatts.org with their default settings. I only adjust for the slope of your roof and the orientation of your building (when applicable). This means that what I say you will make, is very conservative. I feel that if you can see this income as reasonable for you to proceed with purchasing a system, when you begin to get paid on your production and it is higher, then you will be another happy customer.

I understand that I am loosing business because of this, and I am fine with that. I can't be everyone's go-to solar guy for the next 20 years.

Here is something that every person that is considering a solar system should consider. All solar systems are built using the same technologies. With the exception of the inverter type (micro or string) its all the same (I use the micro-inverter because it produces more). So if one company's income projections are higher than another, I would be cautious about what else they are telling you. 

PS I have some great waterfront property in Florida for sale. Remember that one? Don't become the focus of the next round of jokes. Ask a lot of questions, and watch out for those great, limited time offers!

I regularly have competitors calling me up about my prices and services, but pretending to be prospective customers. There is so much business to be done in this industry, that I do not have an issue sharing my knowledge with my competitors, so don't be afraid to identify yourself. I think that as an industry, we can improve ourselves by sharing information, which ultimately helps out our customers. This is good! This is one of the reasons why I post information about the products I offer and the suppliers I work with. They are not unique to me, but they are companies and products that I have researched and feel are a good value for my customers, and they can be for your customers as well.

Here is something to consider, if we work together, we could potentially get even better prices on the things we offer our customers! So give me a call or shoot me an email. When we are down to the last two customers left in Ontario, we can be worried about who gets their business. Until then, let's figure out how we can get our customers' the best system, at the best price, installed the best and safest way, with the best warranty and warranty service they could ever ask for.

The City of Kingston's building department's policy on rooftop PV solar systems, is a building permit is only required if the individual solar panel size being installed is larger than 5 square meters. This is good news and bad news.

The good news is there is less red tape to process before your system can be installed and operating.

The bad news is, the onus to decide if what your salesperson/installer is using is your responsibility. If you didn't read my blog yesterday about what to consider in rooftop mounts, you probably should.

As I have said before, use your best judgment. Read everything you can on the subject and don't be swayed by salespeople telling you to buy what everyone else is getting. This is a new industry, and many people that blindly trust the "experts" will be sorry down the road.

I have been shocked to find out the kind of mounting that solar panel installers and racking manufacturers are providing to home owners.

I imagine that most homeowners are relying on the solar panel sales people and installers to use a solution that will give them a long-term reliable system of attaching the panels to their roof. This is not the case, and I urge every potential solar panel owner to not take this for granted, but get very definite answers that you are comfortable with.

Your solar contract with the OPA is for 20 years, and you are looking at your system producing for this time and longer. How your system is mounted to your roof, affects the seucrity of the system and your roof. You do not want leaks or a rotting rafters, attic or ceiling, so take the time to ask these questions and feel confident in the answers you get. Don't accept the standards "This is what everyone uses" or "These are the made by the biggest company in the industry", etc. Just because everyone is getting them, or they have never had any complaints about their system (many have not been installing long enough to encounter time related issue), of the manufacturer is the biggest, doesn't mean its good for you.

Ask these questions before you sign:

1. How is the system attached to the roof? If the company is lag bolting the racking to your rafters, if the point of penetration is not properly sealed, then there is possibility that the bolts will conduct moisture into the rafters with time, causing the area surrounding the bolt to rot and weaken. After 4-8 years, if rot has set in, a good wind could rip the lag bolts out of the rafter.
2. How is the bolt entry point protected from the weather. If the answer is with caulking between the mounting hardware and the roof, then caulked over the exposed bolt head, this can be problematic. With time caulking will loose its adhesion, dry out, crack and break off. This can leave the penetration point exposed. It may take 5 - 10 years for this to happen, or could happen in 2 - 3. Caulking alone is not an effective way to keep the elements out.
3. How easy is it to remove the system to re-roof? Sometime over your 20 year contract, your roof will probably need to be redone. While more roofers will probably be able to do this themselves (to keep current with trends in rooftop changes), you still need to know upfront what the impact to you will be. If you need to have your roof redone, will the company remove the system and reinstall it so you can re-roof? Are any components not reusable? What will it cost to replace any disposable parts?

You are investing a fair bit of money into your rooftop solar system, so don't get pressured into committing to a project until you are completely satisfied with the answers you get. The size of the name in the business doesn't ensure the quality of the job you get. Rain runs down, snow piles up, use your head to think about the answers, and get what you think is the best system, not what someone tells you is.

It's what I do.