Large and small companies, partnerships and sole proprietorships alike, have known for a long time that there are obstacles to being green, not least the realities of a competitive marketplace. However, a new list of Canadian governmental incentives targeted specifically at businesses is now making it easier to be green. This newsletter provides an overview of the environmental incentive programs available to businesses located in the Province of Ontario, together with a description of the respective eligibility requirements.
1. Renewable Energy Standard Offer Program
The Ontario Power Authority (the "OPA") offers a program that allows businesses to be paid a stable price for generating electricity that can be supplied through local electricity distribution companies. The intent of the program is to help Ontario meet its renewable energy supply targets. Small Renewable Energy Projects ("Projects") will use one renewable source of energy, such as wind, waterpower, solar, or biomass, to generate 10 Megawatts or less of electricity.
Examples of projects include the use of wind turbines or rooftop mounted solar photovoltaic panels. Applications are to be submitted electronically and all eligibility requirements must be met.
- Projects must be located in Ontario and must generate electricity from wind, solar photovoltaic, thermal electric solar, renewable biomass, biogas, biofuel, landfill gas or waterpower. Projects must have an installed capacity of not more than 10 megawatts and must be connected to an eligible electricity distribution system in Ontario at a voltage of 50 kilovolts or less and must have begun after the restructuring of Ontario’s electricity sector took effect. Projects must be metered to the distribution system in accordance with Ontario Energy Board ("OEB") requirements.
- Applicants must meet certain requirements ("eligibility requirements") at the time of filing their application with the OPA including: having a completed connection impact assessment, having an environmental assessment statement, demonstrating that the applicant owns the land or has the consent of a landowner for access rights, and meeting any other additional confirmations or clarifications at the OPA’s request.
- Generators must enter into a contract with the OPA for a term of 20 years.
- Prices will be fixed according to the type of electricity.
- Generators will sell electricity to the grid at a guaranteed price. Generators are not permitted to sell to any other party.
- All projects, other than waterpower projects, are required to achieve commercial operations within three years of the effective date of the contract.
- Only projects that are phased into commercial operation by the third anniversary of the contract will be eligible for payment under the program.
- Incremental projects that increase electricity output from existing facilities or bring previously abandoned facilities back into service are also eligible.
- Applicants will be responsible for making the necessary investment in their facilities, for the cost of connecting to a Distribution System and metering.
- Acceptance/rejection of applications is solely at the discretion of the OPA.
- Certain areas of the provincial transmissions grid are limited in their ability to accept new generation and the OPA may have to restrict participation in certain areas. Oakville at this time however does not appear on the list of limited transmission zones, and therefore is possibly in a "green" zone, or a zone with significant capacity for new projects.
- A potential generator should contact their Local Distribution Company to find out whether or not it is OEB licensed and connected to the IESO-connected grid.
- Resource assessment is very important; wind power for example may require a consultant to help determine energy potential.
- Other than the purchase price of electricity, a provincial retail sales tax rebate is available on certain renewable energy equipment.
The Office of the Chief Energy Conservation Officer: firstname.lastname@example.org
2. Request For Proposals For Renewable Energy Supply
The Ministry of Energy will review proposals for projects located anywhere in Ontario that use wind, water, solar, biogas and landfill gas to generate electricity.
This is a more general initiative with respect to the government continuously proposing and looking into new developments in various areas, including transmission sites etc. The following website provides more information and is offered through the OPA.
Phone: 416.969.6379 or 416.967.7474
3. Clean Energy Standard Offer Program (CESOP)
The CESOP program offered by Ontario Power Authority (the "OPA") will compensate small clean energy generators connected to a distribution system in Ontario. The program is intended to reflect the various benefits of embedded generation by providing good value to ratepayers and encouraging clean energy technologies such as natural gas-fired Combined Heat & Power, and thermal energy.
Potential generators will include any commercial facilities that require both heat and power or that produce electricity using by-product fuel or under-utilized energy sources, such as institutional buildings or industrial facilities. Projects must be located in Ontario and must be metered by the local distribution company in accordance with Ontario Energy Board requirements.
There are two methods for compensation:
- Projects that use eligible by-products or under-utilized energy such as thermal and mechanical will receive fixed payments on a per Mega Watt hour ("MWh") basis. The incentive is based on operating as much as possible during peak times of demand.
- Natural gas-fired Combined Heat & Power projects will have their revenues topped up by the OPA based on performance during a 12 month period.
CESOP contracts will be awarded to eligible projects that have a gross capacity of no more than 10 MW, for a 20 year term.
4. Net Metering
Consumers can subtract the value of electricity they supply to the grid from the value of what they take from the grid. A credit will be applied towards the consumer’s energy costs.
This program is available to business consumers so long as the maximum output requirement is not exceeded.
Phone: Service Ontario at 1.888.668.4633
5 . Electricity Retrofit Incentive Program For Business Projects
Hydro One will reimburse its business customers for a portion of the costs necessary to purchase energy-efficient technology. Technologies that are eligible include the following:
- Cooling equipment, and
- The prescriptive incentive program offers a rebate for pre-defined technologies on a per unit or performance basis.
- The custom incentive program evaluates technology and equipment and an incentive is offered based on the level of improved energy performance. Incentives will be based on the lesser of $150/kw saved or 50% of incremental project costs.
- Applicants must be customers of, or served by, Hydro One, with accounts in good standing at the time of application, the eligibility review period, and at the date of payment of the incentive.
- Equipment must be installed in existing buildings and not new construction.
- Applications must be submitted for pre-approval no later than December 31, 2008.
- Projects must be completed within 12 months of pre-approval.
6. Accelerated Capital Cost Allowance ("CCA") And Canadian Renewable And Conservation Expenses
A 50% accelerated CCA is provided under Class 43.2 of Schedule II to the Income Tax Regulations for specified clean energy generation equipment. Eligible equipment includes:
- Solar thermal
- Solar air, and
- Solar photovoltaic
Certain start-up expenses, such as engineering and design work may qualify as a Canadian Renewable and Conservation Expense ("CRCE") and may be deducted in full in the year incurred, or carried forward indefinitely.
- This is currently available for assets acquired on or after February 23, 2005 and before 2012. For assets acquired before February 23, 2005, the allowance is only 30%.
- Eligible equipment must generate electricity by using a renewable energy source.
Phone: (613) 992-1573
7. EcoENERGY Retrofit
This program, offered through Natural Resources Canada, offers 25% savings (up to a maximum of $50,000) for businesses who implement energy-saving projects.
- Organizations that own, manage or lease commercial or institutional buildings (such as retail stores or office buildings), that have been occupied for a similar purpose for the last three years with spaces no greater than 20,000 square metres are eligible to apply.
- Projects undertaken for retrofit must be new. No costs should be incurred until an applicant has signed a Contribution Agreement with Natural Resources Canada and the Office of Energy Efficiency.
- Projected payback for costs associated with retrofitting a business must be for at least one year and any project must be completed within 12 months.
How it works:
Organizations must pay for retrofit measures, such as efficient lighting, motors, heating, ventilation or air conditioning systems, and then at the discretion of Natural Resources Canada, savings will be determined.
Phone: InfoServices Line at 1.877.360.5500
8. EcoENERGY For Renewable Heat
This program provides a rebate of 25% (to a maximum of $80,000) in relation to the cost of purchasing and installing solar water and air installations in the commercial sector.
- Applicants must be doing business in Canada who own solar heating systems at the time of construction.
- Projects approved by Natural Resources Canada must be completed and commissioned within six months of the signing of a contribution agreement.
- Note: The financial incentive associated with this program is only available until August 31, 2008. However, it is necessary to qualify under this program to be eligible for the Ontario Solar Thermal Heating Program, where the incentive is still available.
- Only certain expenses are eligible to be refunded.
- Only certain solar collectors are authorized for use in relation to this incentive.
9. Ontario Solar Thermal Heating Program
This program offered by the Ontario Ministry of Energy and Infrastructure provides a rebate for commercial organizations who install qualifying solar water or solar air heating systems. Eligible projects can receive up to 25% of the costs to install qualifying systems, up to a maximum incentive of $80,000.
The corporate maximum for multiples installations is $2 million.
The rebate may represent 40% if the project is in a remote community as defined by the program (which is unlikely to be Oakville).
10. EcoENERGY For Renewable Power
This program provides incentives of one cent per kilowatt-hour for production of clean electricity over ten years on eligible products.
- Canadian businesses and organizations who sign a contribution agreement with Natural Resources Canada.
- Must own a "qualifying project" that produces electricity for sale in Canada or for its own use. A qualifying project means a new or refurbished low-impact generating facility located in Canada that uses renewable technologies.
- Projects will be funded on a first in construction, first served basis.
Applicants must qualify and submit applications under the Federal program "ecoENERGY for Renewable Heat" to Natural Resource Canada, and also demonstrate that they are a commercial, industrial, or institutional entity situated in Ontario.
Phone: Service Ontario at 1.888.668.4636
11. "Double Return" From Hydro One
Any commercial distribution customers of Hydro One are eligible to participate in the "Double Return" program which allows a company that reduces its electricity demands by a minimum of 5% during peak hours on business days to receive a cheque from Hydro One for a value of double the amount of what the business saved.
The incentive is capped at 10% of delivery charges.
12. Load Management
The OPA has commenced several demand response programs that are aimed at reducing the wholesale cost of power and reducing the need to build additional capacity. The requirements seem more complex than other programs and would involve either generating or curtailing use of electricity.
Phone: Ontario Power Authority at 416.967.7474