Under the FIT 1.0 program which was launched in September 2009 and lasted for about two years, more than ten thousands application were submitted to the OPA. These applications would add up to nearly 21 MW of renewable energy technologies in Ontario.
Of all these application only 1,700+ were granted contracts, totaling 4,500 MW of renewable energy systems. Solar PV and wind probably have the biggest share among various green technologies.
Currently nearly 400 MW of renewable energy technologies are in commercial operation within province, and the remaining 4,100 MW that is shared between 1,200 OPA contracts are in development phase.
With the launch of new FIT program (version 2.1) there will be a small spike in the capacity of renewable energy systems within Ontario. But the development phase will be shorter since the new systems must be in service within 18 months of entering the contract with the OPA.
One of the main and most debatable subjects in this regard is that solar technology (in specific photovoltaic) is still at such a stage that the cost of producing electricity from solar energy comes out to be more expensive compared to other conventional methods of power production. This means that you have to pay more money for a unit of electricity that is produced from a solar power system.
For this reason many governments around the globe provide incentives and subsidies (known as feed-in-tariff) to promote solar power. The way it works is that the government buys the electricity you produce from your solar system at a higher rate. This is the only way it becomes financially viable to install solar systems on micro scales.
The government of Ontario introduced this program in 2009 and after a review, lowered the tariff rates in 2012. This doesn’t mean that new solar system owners make less profit, but because the cost of manufacturing various components of a solar system is decreasing as the technology advances, it will cheaper and cheaper to produce electricity from solar energy. This means that the solar power will be competitive with other modes of power production in the future and eventually there will be no requirement for government subsidies.
Posted in FIT, microFIT, Solar Systems
Tagged finance, FIT, income, microfir, ontario, OPA, power, profit, solar
It is always hard to understand where to start from when you decide to invest capital on such a project. Depending on the size of the proposed system for the rooftop, there are various stages you need to take.
First of all, you should find out whether your roof is suitable for a solar system at all or not. Look at the orientation of the building, objects around your house, trees, buildings, are they shading your roof? Is there a possibility that within the next 20 years, there will be building built near your house that will cause shadings on the roof? And most important of all, will your building exist for at least the next 20 years? If the answer to these questions is a YES, then move on to the next stage.
Because of the weight of the solar array, your roof has to be examined whether it can bear the extra weight on it or not. At the beginning stages, this should be examined instinctively by yourself, or a general inspection by an expert. You could take the extra care and pay for a consultant to check the strength of your roof.
If you are going to install a large system, you must contact your LDC (local distribution company, or in other words, the utility) to check whether there is enough capacity available to add your system to the grid or not. This is usually known as pre-FIT application.
Once approved, you can move ahead to sign a contract with the OPA. The new rules set by the OPA require you to get a building permit before you become eligible to sign a contract with them.
It is recommended that from this stage on, you contact one of the many companies to handle the regulatory and design work to them. In order to find a company that can help you, submit the form here.
You could loan some money; that’s the first easy step. TD bank offers good loans for clean energy projects. You invest a small capital and get the rest as a loan. This will only extend the payback period, but nothing significant.
Or, if you have a FIT project, you could lease the system, or rather, the space. This is not allowed for microFIT projects.
When leasing, the owner of the house/land will sign the contract with the OPA. You should find an investor who is willing to lease the system from you. In that case, you are essentially selling the system to the investor, and leasing the space for 20 years. You will earn less money, but on other hand you don’t have to invest any capital, or worry about operation and maintenance of the system.
Very simply put, any renewable energy system that is less 10kW in size falls under the microFIT program. Anything above 10kW up to 10MW is a FIT project.
There is another subgroup under FIT which is called small FIT. Small FIT projects are those that their system size is bigger than 10kW and smaller than 500kW.
microFIT is usually suitable for small rooftop systems in residential buildings and homes, as well as being a good investment opportunity for small business owners. Farmers could also benefit from this program for small ground-mount projects.
The tariff rate offered by the OPA is inversely proportional to the system size. That is, the bigger the system, the smaller the tariff rafte. Therefore microFIT projects earn the highest rate per kWh of the electricity produced.
In terms of regulations and paper work, there are many differences between FIT and microFIT.
There’s a general formula to use: in Toronto (and southern Ontario generally) you usually get 1100-1200 kWh/kW/year. Let’s consider 1100 for now. What this number means is that for each kW of a system you install, you are able to produce 1100 kWh of electricity in a year.
Thus if you have 100 kW system, then:
100 x 1100 = 110,000 kWh in one year.
If you have a 2.8 MW system, then:
2.8 x 1000 x 1100 = 3,080,000 kWh in one year.
Now that you know how much electricity your system can produce, you can calculate how much money you can earn. You have consult OPA website for their updated price schedule.
Remember! This method only applies to the first year. Solar systems’ performance degrades over time, thus the system production decreases at a rate annually.
Posted in FIT, microFIT
Tagged cash, cashflow, FIT, income, microFIT, money, ontario, OPA, power, solar