The landscape of solar energy in Ontario continues to shift toward smaller and intermediate-scale projects. The rise in the number of projects is mostly due to two phenomena: the start of the Feed-In Tariff (FIT) program and the rise of renewable energy cooperatives.
The FIT program began in 2009 as part of the Green Energy Act. FIT allows private developers to create renewable energy facilities and sell the power produced at a fixed (and partially subsidized) price over a specific contract term. Homeowners can also participate through the microFIT program covering facilities of less than 10 kW.
Facilities greater than 500 kW are no longer eligible for the FIT program, and are facing increasing bureaucratic hurdles—thus the door is open for intermediate-scale solar facilities to play an increasing role in Ontario’s renewable energy picture.
Solar energy continues to be the more heavily subsidized of the FIT programs, with currently guaranteed prices to suppliers ranging from 31.6 cents per kilowatt-hr (kWh) to 38.4 cents per kWh based on power generating capacity. Non-rooftop solar operations yield for 27.5-28.9 cents per kWh. Compare this to wind power, which is only guaranteed at 12.8 cents per kWh, and one can see why solar is an attractive option at intermediate scale.
At the beginning of 2015 the FIT program selected 99 MW of new solar power projects to supply the grid and receive payments. One-third of the power is set to come from 76 non-rooftop solar projects, while the remainder will be supplied through 254 rooftop projects. According to PV-Tech, 181 of the collective FIT projects comprising 49 MW of power generation have some form of community participation.
Enter the cooperatives, which provide a symbiotic relationship in the market. People who want to promote solar energy but do not have the land or the correct sun profile to install solar energy in their own homes have a place to invest, and developers have an alternate path of financing and maintaining their projects.
Renewable energy cooperatives date back into the 1990s, with one of the earliest being the TREC Renewable Energy Co-op (1998). However, provisions in the Green Energy Act made it far easier to create and invest in renewable energy co-ops. The response was predictably positive. The Ontario Co-operative Association currently lists 82 members under the category of renewable energy co-ops, with an increasing number of these at least partially based in solar power.
Solar cooperatives typically raise their project revenue through issuing bonds to investors, who in turn receive returns at defined intervals. Bonds can be redeemed at maturity or re-invested. Investment terms for solar cooperatives typically offer reasonable returns with relatively low risk, especially given the current bond market.
For example, SolarShare (a component of the TREC Co-operative) offers bonds at a minimum of $1,000 with no maximum for a 5% return. Other cooperatives offer a range of minimum investment, rates of return, and relative risk. Anyone interested in solar energy investment has plenty of options to study and choose from, whether local or based elsewhere in the province.
Solar energy is certainly still prevalent in the utility-scale plans. Of the 42 qualified applicants for the Large Scale Renewable (LRP) request for quotes, only 9 had no solar component in their plans, and 14 were entirely solar-based. Still, smaller cooperatives seem to be gaining momentum, which can only be a good thing for renewable energy. Local ownership instills local pride, creates local jobs, and leads to an overall greater acceptance of solar energy (and other renewables) as the best path for future energy requirements.