The Province of Ontario has launched the first feed-in tariff or FIT Program in North America. This landmark program is the cornerstone of the Province’s strategy to establish reliable sources of renewable energy for electricity generation. The FIT Program includes sources of renewable energy such as wind; waterpower; renewable biomass; bio-gas; landfill gas; and solar. The program is divided into two different categories; the FIT Program, designed for projects greater than 10kW and the microFIT Program, designed for projects less than 10kW. This article highlights the program’s key distinguishing features, and offers a high-level perspective on its significance for commercial businesses in the Province.

The FIT Program is designed to provide a reasonable return on investment for businesses producing renewable energy. Businesses in Ontario planning to implement a renewable energy generating solution may now be eligible to receive a price per kWh that will be, in some cases, double what it was prior to the implementation of this program. Before the FIT Program, businesses that invested in an eligible solar energy project received approximately 42 cents per kWh ¹. With the FIT Program, this incentive jumps to 80 cents per kWh (for a Solar PV). For example, for a 10 kW system, 1000 kWh of solar energy produced would provide $800 per 1000 kWh under the FIT contract. Under the previous program, 1000 kWh would provide only $420 per 1000 kWh, or $380 less than with the FIT Program.

The FIT Program requires that businesses use a percentage of domestic content (labour and resources from Ontario). The domestic content requirements vary depending on the type of renewable energy project implemented (e.g. wind power or solar projects) and range from 25% to 60%. This is in keeping with the key economic goals of the program, namely to develop a renewable energy industry in Ontario, to create ‘green’ sector jobs, and to support economic growth and diversification.

With limited wind and solar companies in Ontario, the program will encourage new companies to enter the renewable space and for existing companies to grow their businesses.

While much remains to be accomplished and the overall success of the Green Energy Act and the FIT Program remains uncertain, it is clear that the impact of climate change, the need for secure energy supplies, and our current economic challenges have prompted real action on the part of government. We believe this program has the potential to meet its goals and to offer business economically viable opportunities to create and sustain a renewable energy industry in the province.

Click here for a detailed flow chart outlining the steps of the program.

For more information, contact Energy Advantage® at 1.800.354.1266 or visit our website at www.energyadvantage.com.

1 “Ontario Power Authority.”Program Flow Chart. Ontario Power Authority, 30 September 2009, http://www.powerauthority.on.ca/Page.asp?PageID=122&ContentID=4045