The microFIT program is a component of Ontario’s Feed-in Tariff (FIT) program designed to help incorporate renewal energy in residential areas and smaller non-industrial applications such as schools. FIT targets non-utility scale projects of more than 10 kilowatts (kW) while microFit handles projects of 10 kW or less. The microFIT program allows non-utility generators of solar power and other renewal sources to sell their energy back to Ontario under guaranteed contract terms for a set duration (generally 20-year contracts).
As a microFIT participant, your power generation and consumption are looked at as two separate streams and are appropriately metered separately. You are paid by the utility company at a flat rate for all the electricity you generate and feed into the grid, regardless of whether you use it or not. In turn, you pay your electricity bill as any regular customer would.
The program has been heavily subsidized, with payments to solar power generators being far greater the average electric bill (typically around 8-10 cents per kilowatt-hour (kWh). At the program launch, microFIT participants were paid a whopping 80.2 cents per kWh for their solar-generated power, in part to stimulate interest and in part to overcome the significant costs of solar panels and their installation.
Prices are reviewed and adjusted regularly according to market conditions. After a rapid adjustment to 54.9 cents in 2012, the price has dropped for rooftop installations at a slower pace and is currently at 38.4 cents per kWh for contracts throughout 2015. Increased competition in the market and the removal of the domestic content rule dropped the price of solar installations (still in the $20K-$40K range) and spurred the subsequent drop in power buyback prices.
If you are interested, there are many vendors of solar panels available to assist you. Do some initial research on vendor websites to investigate your options, and ask your local utility company if they have any vendor recommendations. A proven record of smooth connections to the power grid is a bonus.
If you meet eligibility requirements and have a suitable location for panel installation (generally a south-facing roof with a 45° angle), you can apply for the microFIT program. Start by registering at the IESO (Independent Electricity System Operator) website. You will then receive a “my microFIT” home page to submit your application.
If your application is accepted, within 30 days you will receive an offer to connect to the grid via your local distributor. IESO will review the details and give you approval to start your actual project. Keep in mind that you will likely need building permits and other side issues requiring external approval. You must install your system and get safety certification within 180 days of application approval. Seehttp://microfit.powerauthority.on.ca/sites/default/files/microFIT_%20Program_Overview_version_3-2.pdf for a process outline and program overview in PDF format.
How has the program worked so far? It seems to be generating decent reviews as well as clean power. Returns on investment appear to be solid but not spectacular. The original 80.2 cents was proposed to realize an approximate 12% return on investment, and price adjustments try to maintain that ROI. A search through various blogs and websites suggest actual users are expecting more like a 5%-7% return – not unreasonable but not outstanding for a long-term investment, either. Paybacks are usually estimated to be in the 9-15 year range.
You should not look at MicroFIT as purely a moneymaking vehicle – although if a project is set up correctly it should turn a reasonable profit. You should invest in solar because you are a believer in clean energy and want to do your part to promote clean energy while recouping a reasonable return on your investment – and microFIT allows you to do just that.