On June 12, 2013, Ontario's Energy Minister Bob Chiarelli
issued a Directive to the Ontario Power Authority (OPA) regarding
amendments to the province's Feed-in Tariff (FIT) program. This
follows the public announcements made by Minister Chiarelli at the
CanSIA Solar Ontario Conference in Niagara Falls last month. (See:
Ontario's Minister of Energy Announces Changes to Feed-in
This most recent Directive lays out a number of important
changes to the FIT program, including:
Setting annual capacity targets for Small FIT development at
150 megawatts and for microFIT at 50 megawatts for each of the next
Replacing the Large FIT program with a new competitive
procurement process that requires developers to work with
municipalities and Aboriginal communities to identify appropriate
locations and planning requirements;
Providing support for local participation in Small FIT projects
by means of incentives to municipalities and public sector
entities, including transit services, schools and hospitals.
At Gowlings, we regularly receive questions about the ongoing
changes to the Ontario FIT program; the impact of the recent World
Trade Organization (WTO) decision on the FIT program's domestic
content requirements; and the issues raised by local stakeholders
which must be addressed by project developers, municipal
governments, local distributors, financiers, investors and
prospective project acquirers. This article provides a brief
overview of the Directive, and the anticipated consequences and
opportunities for industry participants. Now that the Directive has
been issued, the next step is for the OPA to receive and implement
its contents — a process likely to take several weeks, but
which we understand, is well underway.
The OPA will continue to procure renewable energy capacity under
the microFIT program (projects of 10 kilowatts or less). Once the
OPA issues its revised pricing schedule, up to an additional 30
megawatts will be made available for the remainder of 2013.
Beginning in 2014, annual procurement targets for microFIT will be
set at 50 megawatts. If the full annual target is not allocated in
a given year, the remaining capacity will be added to the following
year's microFIT target.
The OPA will also continue to procure renewable energy capacity
under the Small FIT program (projects with a capacity of 500
kilowatts or less), but will amend the program to support local
participation. Changes to the program will provide municipalities
and public sector entities with special incentives including the
provision of priority points during the application process,
capacity set-asides and a price adder for eligible projects.
Applications will be given priority based on the number of priority
points they are awarded. Projects with identical points will be
prioritized by time stamp. Projects without at least one priority
point will not be offered FIT contracts. In addition,
municipalities and public sector entities will have access to
funding for development and design costs associated with their
Small FIT projects.
The next application window for Small FIT projects is expected
be the fall of 2013, for procurement of up to 70 megawatts of
renewable energy. Beginning in 2014, annual procurement targets for
Small FIT will be set at 150 megawatts. If the full annual target
is not allocated in a given year, the remaining capacity will be
added to the following year's Small FIT target. In addition,
the OPA will reserve 15 megawatts of capacity for a pilot program
for rooftop solar projects on un-constructed buildings that will
launch with the fall 2013 Small FIT window.
The Large FIT program will be replaced with a new competitive
procurement process requiring developers to work with
municipalities and Aboriginal communities to identify appropriate
locations and siting requirements for future renewable energy
projects. The OPA will consult with stakeholders and Aboriginal
communities as it develops the new process. It is required to
report back to the Minister of Energy with interim recommendations
on September 1, 2013. A further Minister's direction will be
issued at a later date to authorize the commencement and content of
the competitive procurement process.
Any Large FIT applications submitted prior to June 12, 2013 for
which a contract offer has not been made will be discontinued. Any
fees and securities paid in relation to discontinued applications
will be returned.
The Ministry will comply with the recent WTO ruling which held
the FIT program's domestic content requirements violate
Canada's trade obligations. The Ministry plans to pursue the
legislative steps necessary to address this situation. Further
direction on this matter will be issued to the OPA on a later
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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