Canada: Ontario Minister Of Energy Announces Changes To FIT Program Rules; Will Comply With WTO Ruling On Domestic Content

On May 30th, 2013, Ontario Energy Minister Bob Chiarelli announced the much anticipated changes the current Liberal government is making to Ontario's Feed-in-Tariff (FIT) program. Speaking at CanSIA Solar Ontario Conference, Chiarelli confirmed that they will replace the controversial approval process for Large FIT projects (+ 500KW) with a new competitive procurement process and provide municipalities with a greater role in locating projects in their communities.

In addition, the Minister announced OPA procurement targets for the next 4 years and the introduction of a roof top solar pilot program for unconstructed buildings.

The Minister is expected to issue a directive to the OPA memorializing these changes and programs in the coming days.

The Minister also affirmed the Ontario government's commitment to complying with the WTO ruling regarding the FIT program's domestic content requirements. (see our previous post). No details on the method of compliance were shared and it is not yet known whether compliance would have any impact on existing FIT contracts.

The following is a summary of the announced changes to the FIT program:

New Competitive Procurement Process for Large FIT projects:

  • Ministry will replace FIT program for projects over 500KW with a new competitive procurement process. This is not expected to impact existing contracts, but would apply to current FIT applications.;
  • Developers of prospective projects will be required to work with and seek the cooperation of municipalities before the Ontario Power Authority ('OPA') will approve contracts. It is not yet clear how the developer's obligation to cooperate with the municipality would relate to the municipality's involvement in the project. However, no veto over projects will be extended to municipalities, which suggests the OPA would have some power to offer a contract even if a municipality refuses to cooperate with the developer.
  • The OPA will approve Large FIT contracts partly on the basis of regional need, location to transmission grid and community participation.

Greater Role for Municipalities:

  • Projects led by, or in partnership with, municipalities will receive priority points on a similar basis as First Nations and communities receive priority under the FIT 2.0 regime.;
  • Smaller and mid-size municipalities will receive 'soft funding' from the Ministry in association with designing and developing community-based renewable energy plans
  • A portion of the annual procurement will be set aside for municipalities, universities, schools and hospitals.
  • Property tax on lands siting wind turbines will be increased by a yet unspecified rate.

OPA and Ministry of Energy Procurement Targets:

  • 900 MW total procurement target for 4 year period between 2014 and 2018.;
  • Commitment to a procure 50 MW of microFIT and 150 MW of Small FIT each year between 2014 and 2018.;
  • Additional 90 MW window will be opening fall 2013, comprised of 70 MW Small FIT and 20 MW microFIT; and.
  • Rates will be reviewed on a yearly basis, beginning in the summer of (2013).

Pilot rooftop solar program

  • The OPA plans to award a select number of FIT contracts for rooftop solar projects on unconstructed buildings in the summer of (2013). The current rules require projects to be on existing buildings. The intention of this pilot is to encourage construction of buildings with roof surfaces capable of supporting solar panel installations.

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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