Ontario, Canada is poised to introduce new electricity pricing to encourage the development of renewable energy from a diverse range of producers including homeowners, community-based groups and larger scale commercial generators.
The province is considering introducing a feed-in tariff (FIT)–a guaranteed pricing structure to incentivize clean energy production. The FIT would establish prices for energy generated from on-shore and off-shore wind, hydroelectric, solar, biogas, biomass and landfill gas.
The proposed Green Energy Act (GEA), if passed, could establish Ontario as a leader in renewable energy, drive green investment in the province and create thousands of green jobs. Additional changes proposed under the GEA would also make it easier and faster for projects to get connected to the grid. Other countries–particularly Germany, Spain and Denmark–have successfully used FITs to encourage the development of renewable energy projects.
In the U.S., FITs are also being considered in several states. The city of Gainesville, Florida recently approved a solar feed-in tariff, and California is reportedly considering a FIT for renewable energy projects up to 20 megawatts (MW) in size.
Proposed pricing under the Ontario program differs based on project size and type of renewable energy technology. They cover capital, operating and maintenance costs and were set to allow for a reasonable rate of return on investment over an approximate 20-year period. They also provide special categories for community based projects.
Solar micro-generation, 10 kilowatts and under, will enjoy the highest tariff of about 80 Canadian cents per kilowatt hour (kWh). This compares to $0.32 per kWh during the first two years of the program in Gainesville.
Ontario’s proposed prices and program guidelines will form the basis of an eight-week consultation process with renewable energy stakeholders beginning this week.
"Ontario has made great progress in procuring renewables, becoming Canada’s leading province for wind power," added Colin Andersen, CEO of the Ontario Power Authority. "This proposed FIT program would build on our success and ensure that more contracts turn into projects sooner."
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