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.

Having been in business for many years, I can't remember the last time that the government offered every homeowner in the province the opportunity to get a 20 year contract with them. This is not something that happens everyday, and I think we have lost sight of this fact.

Some people are really upset about the delays they and their clients are experiencing with the OPA. These people are obviously not used to being in business, and think that by making a lot of noise, they will somehow get what, it appears they feel is their right.

To put your issues in perspective, visit http://www.opg.com/power/ and click on the generation tab. This will show you how much power is being generated in the province (10,532 MW at the time of this writing). Compare this to the amount you will be generating, and you will see how little your contribution is, yet you are making enough noise to appear that without you, all is lost.

In business, I have worked years to land a client, yes I said years, and I didn't get a 20 year contract with that client, I simply had to do my best and hope that they were happy enough with my efforts to continue using my service. I think the whiners should all grow up, be glad at their chance to get a contract. If they get a contract, they should be grateful they do, and grateful to the government that gave them the opportunity.

Regrettably what people are missing, is they do not "deserve anything". If you read the front page of the microFIT manual, you will see where it is states that the OPA may change, modify, amend or update the Program at anytime, without notice.

So business people, pull yourself together before the government pulls the plug on the program. You think that things are looking dismal now, how would it be if the program was closed? Read the except above again and tell me where it says they need to meet your time-line, or continue to offer the program. Business is tough. Some survive the first 5 years, most don't.

In closing, just remember that you can only bite the hand that feeds you so much, before someone asks, why am I bothering to do this?

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.

Today I launched our Community Initiatives program. The first Initiative is supporting organized sports, associations and organizations. We believe in the Green Initiative, and we wanted to give back to the communities that support us, so you can select an organization to support with your purchase, and we will donate 2% of the total sales amount (less taxes) to that organization.

There is no cost to the organization to participate, they simply need to register, and you will need to select them as you choice of support, before you complete your purchase.

So tell any Ontario organization that you want to support to register on our site, so that you can choose to support them. Now you can do something good for yourself, and support a local organization at the same time.

Make sure you tell any friends, relatives, neighbors and coworkers to select your group to support, if they do not have a group of their own in mind.

It's free and it's our way of saying thanks.

PS. If you have a category for a group or association that you would like to have added, send me an email here...