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.

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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/

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Just listening to Neil Young on the radio as I contemplate writing this, and I am amazed at the appropriateness of the verse. Yesterday I spoke with a module (solar panel) supplier that was telling me they now only have 1MW of panels available for the balance of the year. This is just 100 - 10kW systems for Ontario.

The reason? Germany just reopened their FIT program, and the world is now scrambling to ship product there. Ontario has lost its position in the industry, and we will be feeling the impact of this before the end of the year.

To review Ontario's position:

1. No one can plan any projects in Ontario as the OPA could change the rates or program at anytime.
2. The OPA will lower their rates at anytime should they determine that the individuals or companies that are planning on investing tens of thousand or millions of dollars in Ontario are earning too much, regardless of how they determine this.
3. Solar installer companies have laid-off employees because of the OPA's delay in processing applications. These same companies will be reluctant to ramp up staff again, and will most likely spread out installations as applications are approved. This will result in less installations before the end of the year, even if the OPA releases many of them.
4. Ontario made product is not very plentiful, and international companies will not be looking to inventory product here that basically we be unsaleable after December 2010.
5. Manufactures have pulled back from setting up in Ontario. If the OPA lowers a rate in one area, that impacts their orders, why would they expect that every other rate is not in jeopardy? Why invest in production facilities, when the program's continuation is in question, as the OPA has suggested with the rate reduction.
6. Ontario made product will be more expensive than internationally made products (we do not have the volume to get costs down). This will kill ground mount microFIT projects in 2011 and I suspect it will make many FIT sized projects not economically attractive. I expect that many of these projects will die as well.

I heard at a local Switch meeting, just after the FIT program was launched, that the best thing the OPA could now do was to not mess with the program they setup. Too bad for us they weren't at the meeting.

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I heard that part of the reason the OPA decided to reduce the rate on ground mounted solar was that some companies had applied for thousands of microFIT contracts along rural roads where the existing hydro infrastructure could not accept the capacity. This would mean large costs to upgrade the system.

I can appreciate that the OPA wanted to streamline the application process, so they left the LDCs (local hydro distribution companies) out of the application loop. If they now include them, they can simply restrict application approvals, based on system capacity. This would limit what individuals and companies apply for. Reducing the rate to all applicants is simply unfair.

I have a rural customer that wanted to put 10kW on their property, but could only put 5kW on their roof, so they thought to put the additional 5kW on the ground. Now that the reduced rate is proposed, half of their production will be at 26% less, and that portion will cost more to install. So what do you think they did? Yes there is going to be another 5kW less green energy produced in Ontario. This on its own is not significant, but combined with everyone else that feels the same, the impact to the program will be substantial.

The current rate reduction solution to whatever the full reasons to propose it should be reconsidered to address the actual cause.

I also have a problem with the argument that the profits earned at the old rate are excessive and could compromise the program. I think the OPA needs to start looking at the real cost of our current energy production methods verses green energy produced by whatever means we can.

If the OPA had to pay to clean up 100% of the pollution created every time we turn on a coal fired power plant, what would the cost of our electricity be? What if theye were responsible for the polution created on the electricty we buy outside of the province as well? If the OPA had to pay the full cost of totally eliminating the nuclear waste that is produced by our nuclear plants, or if the full cost of building the nuclear plant (including R&D or whatever other hidden costs are paid by taxpayers) was calculated into our electricity costs, what would we be paying for power?

The cost that the OPA pays us for the green energy we produce covers all of this. There is no pollution to cleanup, no hidden costs that we pay through taxes, it is just the cost that the OPA determined they could pay participants in the program, for the clean energy they produced.

The rate reduction is not the solution, so fix it properly and lets get producing green energy.

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I wish I could have attended the OPA web/teleconference sessions about the proposed new rate category for ground mounted solar. I hear I missed hours of complaints by former microFIT supporters.

I did my part however and sent emails to my MPP, the minister and the OPA. I wish that I felt better knowing I have done this, but I am concerned that my comments will fall on deaf ears.

I wish the OPA and the Minister could hear what I hear everyday as I am talking with potential customers. I am unable to provide reassurance to my clients concerns about the program, because I honestly do not have any confidence in it myself anymore. The OPA has shown that it has no interest in what the public thinks, as they make a decision and implement it, then ask what we think.

I think we need a new government, or at the very least, we need to bring back the Minister that started the ball rolling, so that he can fix it, before it is too late. Regrettably I think that  Brad Duguid needs to resign and George Smitherman should be brought back to add his credibility to try and save the program.

This may save Ontario, but even this is a long shot....

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The Star reports the same propaganda that the OPA issues, stating that ground mounted solar costs less than rooftop mounted. I really wish that someone reporting this information would take the time to actually investigate the story before they print it.

Ground mounted solar costs less only when the owner chooses to build the system themselves, which happens in about 5% of the projects. The rest of the installs use a sales and installation company, using manufactured and engineered components, which is a more expensive method of installation.

I think that the reason the OPA decided to change the rates is that they really did not think that the public would embrace the idea of creating "green energy". There is no reason that a kW generated on a rooftop should be paid any more than one paid on the ground, unless they had not expected that as many people and businesses would take up the cause as has happened. Most rooftops will not support a 10kW sized system, so that fact that rural property owners (many of them farmers I would assume) decided to participate, resulted in more kW being produced at the microFIT rate than the OPA planned, hence the change in rate.

It is really unfortunate that the truth about the program is revealed. The OPA does not want individual and small business participation in the FIT program. The question is, why did they bother to implement it in the first place? The OPA manages so much power in this province, why are they being so petty as to attack farmers and rural property owners over a few cents a kW.

Let the Toronto Star know they have their facts wrong here: http://www.thestar.com/business/article/831294--province-blocks-solar-generation-loophole

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Many emails from customers and prospective ones, along with concerned visitors has prompted me to add commenting to my blog. Share your thoughts and what you are doing to let the ministry and the OPA know what you think of the proposed rate change.

Here are some things you can do:

• John Gerretsen is the Kingston & Islands MPP. If you are in his area, let him know what you think. If you are outside of his area, send a message to your own MPP: http://www.johngerretsen.onmpp.ca/
• You can now post your thoughts and comments on my blog, available at the bottom of every page. There are hundreds of people that are reading this website, let them know how you feel as well.
• Send an email to the OPA and attend their discussion sessions as indicated in the email they sent you.: http://microfit.powerauthority.on.ca/contact-us.php
• Email the Minister of Energy & Infrastructure - Brad Duguid who oversees all of this: Ministry - Contact Us

This is wrong, so let's let them know how we feel.

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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.

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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.

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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.

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