Canada: Ontario’s Feed-In Tariff Program: Results From The Public Consultation Phase

Last Updated: July 19 2012
Article by Sven Walker

Following the Feed-in Tariff (FIT) two year review report, which was issued on March 22, 2012, Ontario's Minister of Energy expressed the Government's commitment to implementing the recommendations laid out in the report. To that end, the Ontario Power Authority (OPA) tabled draft rules and contract documents for public consultations and comments. The recommendations and suggestions gathered through this process have given rise to a new Policy Directive from the Minister of Energy, making the following changes and clarifications to the FIT Program, as of July 11, 2012.

FIT Applications Prioritization

Going forward, FIT applications will be prioritized based on the number of points they accumulate across several categories. The OPA will not offer a FIT contract to a project if the project does not have at least 1 prioritization point. Below is a summary of the prioritization categories and the number of points associated with each of them.

Prioritization Table

Points Based on Applicant Type

 

Applicant Type

Points

A project in which a local community has a minimum of 15% equity interest held by a co-op with:

  • in the case of large FIT projects, 50 or more property owners, who live in the municipality where the project is located; or
  • in the case of small FIT projects, 35 or more property owners, who live in the municipality where the project is located.

3

A project in which an Aboriginal community has a minimum 15% equity interest

3

A project in which publicly-funded schools, public colleges, public universities, hospitals and publicly-owned long-term care homes have a minimum of 15% equity interest or are the project host.

2

All other projects

0

Additional Points Available

Category

Points

Local Municipal Council Support Resolution

2

Aboriginal Community Support Resolution

2

Project Readiness (Maxium 2 points)

  • Applicants for solar ground-mounted, wind, bioenergy and waterpower projects on Aboriginal Reserve, Federal land or private land have sufficient space for the project and a firm lease or option to lease or purchase the land or own the land
  • Applicants for solar rooftop projects either own the host building or have a firm lease or option to lease space as necessary

2

Projects that applied on or before July 4, 2011

1

Projects that applied on or after July 5, 2011

0.5

System Benefit (water and bioenergy)

1

Projects with the same number of points will be prioritized on the basis of the projects' timestamps.

Community and Aboriginal Participation

With this new Policy Directive, the Government has reaffirmed its commitment to encouraging greater Aboriginal and community participation in the FIT Program.

Special Priority

Within any FIT application window, the OPA will prioritize over any other applications, the applications of projects which have:

  • An Aboriginal equity interest of 50% or more;
  • Community equity interest of 50% or more held by a co-operative in which at least 50 members are local property owners.

Such applications will be offered contracts before any other projects in the same application window.

Prohibited Changes in Community and Aboriginal Participation

There can be no changes to facilities which have received priority because of community or Aboriginal participation if the changes would lead to either:

1)      a drop in community or Aboriginal equity interest below 50%; or

2)      a drop in the number of local property owners members of the co-operative in a community project below 50.

If a change with such an effect does occur during the term of a FIT contract, this will be a default under the contract and will constitute grounds for the termination of the contract.

            Correcting Prohibited Changes

In accordance with the Policy Directive, the OPA will provide FIT Suppliers an opportunity to correct the effects of a prohibited change such as the ones outlined above. These "cure periods" will be 6 months long and will be available as follows:

Type of Default

How to Cure the Default

A drop in community or Aboriginal equity participation below 50%

  • Obtain equity participation from an entity that is from the same category of entity as the one it is replacing;
  • Have the new entity hold an equity interest greater than 50%.

A change in co-operative membership leading to default under (1) or (2) above

  • Report the change in membership to the OPA within 12 months of the change occurring;
  • Restore number of co-operative members to a level for which the project would have been awarded the same or greater number of priority points than it was originally awarded.

The number of local property owners members of the co-operative falls below 50.

  • Report the change in membership to the OPA within 12 months of the change occurring;
  • Restore the number of local property owners members of the co-operative to at least 50.

A drop in community or Aboriginal equity participation below 15%

  • Obtain equity participation from an entity that is from the same category of entity as the one it is replacing;
  • The supplier would have been awarded the same or greater number of priority points, if the new entity had held equity interest in the project at the time the priority points were originally awarded. 

A drop in education/health equity participation below 15% or loss of an education/health host 1

  • Obtain equity participation from an entity such that the supplier would have been awarded the same or greater number of priority points, if the new entity had held equity interest in the project at the time the priority points were originally awarded; or
  • Obtain a new host such that the supplier would have been awarded the same or greater number of priority points, if the new entity had held equity interest in the project at the time the priority points were originally awarded.

Changes to Community Partnership Program Eligibility Requirements

The OPA will amend the eligibility requirements for the Community Partnership Program to bring them in line with the Minister's Policy Directive of April 5, 2012.

In addition, the OPA will set aside up to $1 million annually for the purpose of education and capacity building. Of these funds, $100,000 will be dedicated to the Association of Municipalities of Ontario for the purpose of education and outreach.

Protections for Agricultural Lands

In accordance with the Minister's Policy Directive, the OPA will not award FIT contracts and shall not relocate existing projects for ground-mounted solar photovoltaic generation facilities greater than 10 kW where the facilities would be located on a site containing:

  • Land with Class 1, 2 and 3 soils, as described on the Canada Land Inventory Agricultural Capability Maps published by the Ontario Ministry of Agriculture, Food and Rural Affairs and Agriculture and Agri-Food Canada;
  • Land with a mix of Class 1,2 or 3 and other soils, unless the facility is located on the non-Class 1,2 or 3 soils
  • Land comprised of organic order soils as it appears on the Canada Land Inventory  Agricultural Capability Maps published by the Ontario Ministry of Agriculture, Food and Rural Affairs and Agriculture and Agri-Food Canada;
  • Specialty Crop Areas, as defined by the Provincial Policy Statement.

An exception to these rules is that a facility may be located on land with Class 1, 2 or 3 soils if the site is located on an airport, a closed landfill, a contaminated site, an industrial site zoned for industrial use, a federal military installation, or land containing Class 3 soils only, if the land was owned by a municipality at the time the FIT application was made.

Land Use Rules

Ground-mounted facilities greater than 10 kW will not be relocated where the proposed new location property is:

  • Zoned to permit residential use or borders on a property zoned to permit residential use;
  • Zoned for commercial or industrial use but no such use is occurring;
  • Zoned for commercial or industrial use  where the solar facility would be the main or primary purpose for which the property is used

A working group will be established to consider the interests of stakeholders an provide recommendations with respect to placing ground-mounted installations on rural lands.

Transmission and Distribution

No FIT contract will be awarded if the proposed project is located 50 km or more from the project's proposed point of connecting to the existing transmission or distribution grid.

Offer to Connect Timelines for microFIT Projects

Applicants under the microFIT program will be required to seek an Offer to Conenct within 30 days of being notified by the OPA that their application is complete. Following this, the applicant will have 90 days to receive and accept an Offer to Connect.

Changes to the FIT Contract

No New Termination Clauses

The termination clauses in the current FIT 1.0 contract will carry over into the FIT 2.0 contract but no new termination clauses will be created.

Voluntary Withdrawal Period Extended

The voluntary withdrawal period for existing FIT contract holders is being extended to September 30, 2012.

Rooftop Solar Facilities

The milestone date for commercial operation for rooftop solar facilities remains at 18 months after the contract date.

For projects which meet the following requirements, the milestone date will be 36 months from the contract date:

  • the project contains a portfolio of rooftop facilities of at least 15 MW;
  • the applications in the portfolio are submitted in the same application window;
  • the applications  have the same applicant legal name; and
  • the contracts must be awarded and executed during the same contract award period.

Pilot Program for Rooftop Solar Without Existing Building Constructed

The OPA will be launching a new pilot program where applicants will apply for small rooftop FIT contracts for buildings that have not yet been constructed. The pilot will be implemented by the end of 2012. In 2013, the OPA can reserve up to 15 MW of the total small FIT contract capacity for this pilot program.

 Footnote

1 This provision applies only to projects which had been awarded priority points for having an education/health equity participation level of at least 15%.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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