Canada: FIT 2.0: The New Final Feed-In Tariff Contract, Program Rules And Related Documents Have Been Released

Last Updated: August 21 2012
Article by Jenny Pho

After a thorough review of the Feed-in Tariff (FIT) program and a period of consultation with industry stakeholders, the Ontario Power Authority (OPA) released the final FIT 2.0 Contract and Program Rules, as well as all ancillary documents and schedules (available here). The final version reflects changes based on the feedback received from the industry on the draft Program Rules and related documents which were published on April 6, 2012.

The application window for Small FIT Projects (projects with proposed capacity of 500kW or less) is expected to open on October 1, 2012 and close on November 30, 2012. The OPA anticipates it will award a total of 200MW worth of Small FIT Project contracts for this application period. The timing of the application window for larger FIT Projects will be announced once details are finalized.

The following is a summary of some of the key changes to the FIT Program from version 1.0:

Note: All terms and abbreviations below have meanings as defined in version 2.0 of the FIT  Program definitions available on the FIT Program website.

  • Prices for solar and wind generated power have been reduced. See the current price schedule here.  FIT prices will be reviewed on an annual basis, with new prices published in November, taking effect on January 1 of the following year
  • FIT Project Applications will only be accepted during specific periods of time ("application windows"), rather than on an ongoing basis (see above for more details on the upcoming Small FIT Project application window)
  • Application Security is now required for all Applications
  • Applications will be prioritized according to the number of priority points they receive on the basis of community participation, Aboriginal participation, participation or hosting by a public university, college, school, hospital or long-term care home, municipal support, Aboriginal support, project readiness and electricity system benefit. Read more about the prioritization process on our blog here
  • Contract Capacity Set-Aside Projects (i.e. ones with over 50% Aboriginal or community co-op participation) will be prioritized ahead of all other projects
  • Solar rooftop projects must be commercially operational no later than 18 months from the date of the FIT contract. Applicants who have a portfolio of rooftop projects of more than 15 MW in the aggregate in the same application window may choose to group these projects to extend the Milestone Date for Commercial Operation for each of the projects in the portfolio to 36 months from the date of the FIT contracts.
  • Ground-mounted solar projects may not be located on residential property or on land abutting residential property unless the primary use of the land is agricultural and residential use is permitted as ancillary to the agricultural use.
  • A ground-mounted solar project may be located on a commercial or industrial property, as long as it is not the main, primary or only use of that property.
  • Ground-mounted solar projects are not permitted on soil classified by the Canada Land Inventory (CLI) as Class 1, Class 2, or Class 3 except in cases where the Class 1, 2 or 3 soil is on airport lands, a closed landfill or a military installation property. Read more about the new soil and land protection features of the FIT Program here

The following is a broad overview of the FIT 2.0 Application process:

1.    Application Requirements

Each FIT application must include:

  • Complete Application Checklist
  • Application Fee – A certified cheque or bank draft for a sum that is the greater of (i) $0.50 per kW of proposed project capacity, up to a maximum of $5,000.00 and (ii) $500.00. (Note: the Application Fee is inclusive of HST and is non-refundable, regardless of whether the Application is accepted by the OPA.)
  • Application Security – Security in an amount which is the greater of $1,000.00 and $20.00 per kW of proposed project capacity for Solar (PV) projects or $10.00 per kW of proposed project capacity for all other projects. (Note: for Applications with respect to an Aboriginal Participation Project or a Community Participation Project, where the applicable Participation Level is greater than 50% as of the date of the Application, the applicable security is $5.00 per kW of proposed project capacity, regardless of the renewable energy type.)
  • Authorization Letter in the prescribed form – The letter authorizes the LDC and the IESO to provide the OPA with all information it requires for the purpose of evaluating the Application.
  • For Projects located in whole or in part on provincial Crown lands – The Application must include (i) as part of the electronic Application, a geographical description of the Crown lands in question and Waterpower Site Number(s) (if applicable) or, if Waterpower Site Number(s) are not available, the GPS coordinates of the site; and (ii) as part of the hard copy Application, a copy of the Crown Land Site Report that must have been submitted to the MNR prior to the submission of the hard copy of the Application.
  • Completed Prescribed Form regarding Site Access Rights – Evidence that the Applicant has Site Access Rights with respect to all lands on which the Site is located.
  • For Waterpower Projects – A copy of the applicable MNR Waterpower Declaration that has been submitted to the MNR prior to submission of the hard copy of the Application

2.    Application Evaluation Stages

Once it has been submitted, an Application will be evaluated by the OPA in four stages:

1)  Application Completeness Requirements – Each Application will pass or fail depending on whether it meets the completeness  requirements set out in the FIT 2.0 Rules

2)  Eligibility Requirements – Each Application will pass or fail depending on whether it meets the eligibility requirements set out in the FIT 2.0 Rules

3)  Ranking by Prioritization and Time Stamp – Each Application which passes Stage 2 will be evaluated to determine whether it qualifies as a Capacity Set-Aside Project as defined in Section 6 of the FIT 2.0 Rules and awarded a point score in accordance with the prioritization process described in Section 6 (Read our blog post regarding the priority points system here). Applications will then be ranked by their Capacity Set-Aside Project status, Priority Points and Time Stamp.

4)  Connection Availability and Procurement Targets – Applications will, in order of the rank determined at Stage 3, be assessed under the TAT and DAT, as applicable, and an Offer Notice will be issued.

3.    Pre-Existing Applications and Re-Submission Requirement

Applications dated prior to April 5, 2012 for which no Offer Notice has been issued (Pre-Existing Application) will be subject to the FIT 2.0 Rules. Unless such a Pre-Existing Application is re-submitted during the first available Application Period for either Small or Large FIT Projects, as applicable, the Pre-Existing Application will be terminated.

Re-Submitted Applications will be deemed to have the Time Stamp of the original Pre-Existing Application for the purpose of ranking.

4.    Application Ranking

A Project described in an Application will be eligible to be designated as a Contract Capacity Set-Aside Project (if applied for). In addition, Applications may be eligible for priority points in accordance with the priority points ranking system.

Applications will be ranked according to the following factors:

1)  Contract Capacity Set-Aside Projects

(A)  Applications for Projects designated as Contract Capacity Set-Aside Projects will be ranked higher than all other Applications

(B)  Contract Capacity Set-Aside Projects with more priority points will be ranked higher than ones with fewer priority points

(C)  If Contract Capacity Set-Aside Project Applications have the same number of priority points, the Application with the earlier Time Stamp will be ranked higher than the Application with the later Time Stamp

2)  Other Projects

(A)  Applications with more priority points will be ranked higher than Applications with fewer priority points

(B)  If two or more Applications have the same number of priority points, the Application(s) with the earlier Time Stamp will be ranked higher than the Application(s) with the later Time Stamp

5.    Contract Pricing

The price applicable with respect to a FIT Contract will be the price as posted on the date of publication of the Offer List which contains the Application corresponding to the FIT Contract in question.

Where the Contract Price and Price Adder (if applicable) set out in the Offer Notice is less than the Contract Price and Price Adder (if applicable) in effect as of the date of the Application, the Applicant may, with notice to the OPA, choose not to enter into a FIT Contract, in which case the OPA will return the Application Security.

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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