Canada: A Mighty Wind Blows - OPA's FIT Program Issues Hundreds Of FIT Contracts

Although many kinks and details in the Ontario Power Authority (OPA) Feed-in-Tariff (FIT) program continue to be ironed out, more than six hundred developers of renewable energy generation facilities have been awarded FIT contracts since early March, representing approximately 2600 MW in generation capacity. The impressive uptake of the program seems to have come as a surprise to both the OPA and the provincial government, although the economics of developing renewable-energy generation projects under the FIT program was no secret among developers.

Capacity allocation exempt facilities

The OPA announced the first tranche of FIT contracts on March 10 - more than five hundred FIT contracts were offered to developers of projects with a generation capacity of less than 500 kWs. These "Capacity Allocation Exempt" (CAE) facilities represent a total of 112 MWs of generation capacity and are largely comprised of rooftop solar projects. CAE facilities are not required to provide initial application security upon the submission of an application under the FIT program, and are exempt from the OPA's distribution and transmission capacity testing. Although the OPA had originally intended to offer contracts to CAE project applications immediately after applications had been deemed complete, no further CAE facility FIT contracts will be offered until June, at the earliest.

Large-scale facilities

The OPA announced the second tranche of FIT contracts on April 8 - more than 180 FIT contracts representing almost 2500 MW of generation capacity. This is the first time that large-scale renewable energy projects have been able to access a standard offer contract program offered by the OPA. The Renewable Energy Standard Offer Program (RESOP) was replaced by the FIT program, but was limited to projects of 10 MW or less. Projects offered contracts under FIT range in size from less than 1 MW to 300 MW. Although seventy-six contracts were offered to proposed solar projects (representing 651 MW), the majority of the proposed generation capacity comes from on-shore wind projects, with forty-seven contracts offered to projects totaling more than 1229 MWs of capacity. One FIT contract was offered to a proposed offshore wind project with a proposed capacity of 300 MW. Once the contracts are finalized, project developers have a limited time to bring these projects online - three years from the date of contract for solar and wind projects.

Renewable energy - truly a sustainable resource?

The unprecedented growth of the renewable-energy generation market in Ontario over the first six months of the FIT program has many people questioning whether this rate of growth can be sustained. More than 2600 MW of capacity has been contracted for under FIT, which is double the 1300 MWs of renewable generation that has been developed in Ontario since 2003.

Generation is only one component to the growth of the electricity market in Ontario. Transmission and manufacturing are two other critical keys to ensuring these six-hundred-plus projects can be brought on to the Ontario grid. The FIT contracts granted so far have been assessed in light of the province's current transmission and distribution capacity, and will not require substantial expansion of either grid. But there remain more than 250 projects waiting for the OPA's "Economic Connection Test" (ECT), having been deemed by the OPA not economically viable under current transmission and distribution capacities. The ECT is intended to reassess the viability of proposed projects as new transmission capacity comes online. The completion of the approval process of the Hydro One Networks Inc. (HONI) Bruce-Milton transmission project represents a significant expansion of HONI's transmission grid and will add 1500 MW of transmission capacity to that region. The OPA has planned to run the first ECT in early fall 2010 and expects the Bruce-Milton transmission line will result in new FIT contracts being issued to projects affected by this development. The critical question that remains is "what next?" - HONI has been issued a directive from the provincial government to significantly build out its transmission capacity, and while the OPA and HONI have indicated that work on this expansion has begun, the timeline for the completion of any new transmission work is not clear, even for the Bruce-Milton line. Historically, obtaining all necessary approvals for transmission development projects can take years, and components of the Green Energy Act intended to streamline this process have yet to be tested.

The projects offered FIT contracts so far may not have to worry about transmission but, for the wind and solar projects, the domestic-content rules under the FIT contract continue to represent a significant hurdle to bringing these projects online. Currently, solar projects must meet a 50% domestic-content threshold and wind projects must meet a 25% domestic-content threshold; in 2011 the solar requirement is increased to 60% and in 2012 the wind requirement is increased to 50%. The 2011 and 2012 deadlines have caused many developers to fast-track development and construction plans for facilities granted FIT contracts in order to avoid the significantly more difficult domestic-content obligations. The OPA has been working with FIT program participants to try to clarify developer obligations under this aspect of the FIT contract. In March, the OPA announced that it will review and provide comments on a project's domestic content plan before the "Notice to Proceed" date, a change that will allow developers to get the OPA's feedback on certain equipment prior to entering into supply agreements. Further, the OPA has also indicated that it will provide developers with a non-binding reliance letter confirming that a project will meet the applicable domestic-content obligations under the FIT program. This is aimed at minimizing the significant barrier to financing FIT program projects that many project developers have been facing. Even with the changes to the domestic-content obligations thus far, many developers are hoping that the 2011 and 2012 deadlines will be extended.

The FIT program remains open to new applications; the OPA has received almost one thousand applications to date and more are expected. The announcement of the issuance of FIT contracts is an important step towards realizing the provincial government's goals under the Green Energy Act, but it is just that - a step. There remains considerable work to be done by developers, the OPA, local distribution companies, HONI, and the provincial government before any of the announced 2600 MW of renewable generation capacity starts powering the homes of Ontarians.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.