On Thursday March 12, 2009, the Honourable George Smitherman, Deputy Premier and Minister of Energy and Infrastructure, (the “Minister”) and Colin Andersen, CEO, Ontario Power Authority, provided further details of the proposed feed-in tariff program for renewable energy projects contemplated under Bill 150, the Green Energy and Green Economy Act, 2009 (“Bill 150”).

Bill 150 was introduced in the Ontario legislature on February 23rd, passed second reading on March 11th, and was ordered to the Standing Committee on General Government. It proposes an amendment to the Electricity Act, 1998 that allows the Minister to issue directives to the Ontario Power Authority to develop a feed-in tariff program to procure energy from renewable energy sources, including wind, water, biomass, biogas, biofuel, solar, geothermal, tidal forces and other sources prescribed by regulations (the “FIT”). The FIT will combine standard pricing with standard program rules and standard long-term contracts, the details of which have yet to be announced.

The March 12th joint announcement by the Minister and the OPA provided further details of the proposed FIT, including:

  • Proposed FIT prices that differ based on project size and type of renewable energy technology (see the table below). These prices may be refined over the next few weeks during stakeholder consultations.
  • Prices intended to cover total project costs and provide a reasonable rate of return over a long-term contract (20 years).
  • In contrast to RESOP, there are few upper limits on project capacity.
  • Focused incentives for rooftop solar and community based wind and hydropower projects.
  • Additional consultations with, and new incentives for First Nation and Métis community-based projects.

To view the table click here.

If Bill 150 is passed, the OPA anticipates being in a position to quickly implement the FIT program this summer. As of next week, the OPA will begin consulting with renewable energy stakeholders on the proposed design of a FIT program, including eligibility criteria and the proposed pricing model. Weekly sessions will run from March 17 to May 5, 2009.

The Ontario FIT program draws on models that have successfully driven renewable energy developments in Germany and Spain. The proposed FIT prices were developed based on experience here in Ontario and in other jurisdictions. They are intended to cover building and maintenance costs and the basic connection costs for typical projects as well as allow for a reasonable rate of return on investment over an approximate 20-year period.