The Feed-In Tariff (FIT) Program is an initiative of the Ontario Power Authority (OPA) created as part of the Green Energy and Green Economy Act, 2009. The FIT Program offers fixed purchase rates over a twenty year term to renewable energy providers like Solar Power Network. This allows SPN to offer the stability and revenue that building owners need.
The FIT Program has taken some criticism from certain sectors for artificially propping up the renewable energy industry and increasing the price of electricity. The truth is that all power sources in Ontario are subsidized. Coal and nuclear power receive government support in advance of production. As provincial budget items, all these costs are passed on to the taxpayer. The only difference with the FIT Program is that any subsidies are awarded at the point of purchase, making it substantially more visible.
The province now recognizes distributed generation in the form of rooftop solar as the best way to meet its renewable targets. No longer will rooftop solar be forced to compete with wind turbines or large ground mount solar. There will be many opportunities for building owners to see contracts awarded for their sites during the course of the 900MW roadmap. SPN will optimize the chance of each lease achieving an OPA contract under this plan.
The Minister of Energy has announced 670MW of commercial-scale distributed renewable generation (mostly rooftop solar) over the next 4 years:
70MW of additional procurement in 2013 (plus 53MW in overflow from FIT 2)
150MW of procurement in 2014
150MW of procurement in 2015
150MW of procurement in 2016
150MW of procurement in 2017
The entire idea of grid parity is based on two clear intersecting trends, the growing cost of electricity and the and decreasing coat of solar power.
In 2013, the average Ontarian is paying 15.8 cents for each KWh of electricity they consume. A portion of this is the retail cost of electricity. Another portion is for transmission and infrastructure. Some of it is service fees and some of it is taxes. The price of electricity has been steadily rising, driven by pressures like fuel costs, the cost of grid upgrades, and increased demand. Electricity prices in Ontario have risen by 25% since 2006. The Ontario Energy Board predicts that the price of electricity will increase by another 50% by 2018.
At the same time, the cost of solar power is decreasing. This has been driven largely by the plummeting cost of solar PV modules. Module prices have dropped by 50% since 2009 and are expected to drop by another 30% over the next three years. Combine this with innovations in installation and maintenance, and further factor in the increasing efficiency of modules, and it is inevitable that the downward slope of solar cost will cross the upward slope of electricity prices in the near future. This point is called “grid parity.”
Different jurisdictions will reach grid parity at different times, driven by local electricity rates, labour costs, and sun hours. In Ontario, we anticipate grid parity in 2017, around when total electricity costs hit 20 cents per KWh.
The vital thing about grid parity is that it marks the point at which solar subsidies are no longer needed. Once solar power providers can produce power at less than the market price, the industry is self-sustaining. The purpose of today’s subsidies is to bridge that gap, growing the industry and supporting technological innovations, so that Ontario will be best positioned to take advantage of the massive benefits of solar power once grid parity is reached.
Someone asked me today for the last time, “Why are looking at a future in solar?”
I answered. -“Are you Fu***** kidding me…”
“The development and industrialization of countries such as China and India is expected to more than double the global energy demand, currently 13TW annually, by 2050. One of the biggest challenges of the near future is to meet this rapidly growing energy demand with clean energy. Greenhouse gas emissions produced by coal, oil, and natural gas contribute to climate changes that are becoming a major concern. The surface temperature of the Atlantic Ocean is higher than it has been in at least a millennium, increasing the likelihood and strength of tropical storms, an increased melting of arctic ice caps, and a higher global surface temperature. It has been predicted that stabilization of atmospheric greenhouse-gas concentrations at a level that would prevent dangerous anthropogenic climate interference with the climate would require 10 TW or carbon-emission-free power by 2050.
To meet this 10 TW challenge, three major options are at our disposal, carbon neutral energy (fossil fuel use in conjunction with carbon capture and sequestration), nuclear power, and renewable energy. To produce 10 TW of carbon neutral energy using fossil fuels 25 billion metric tons of CO2 would need to be sequestered annually (12500km3 or about the volume of Lake Superior!). Using nuclear power to produce 10 TW of clean energy by 2050 would require the construction of a new 1GW nuclear plant somewhere on earth every day until 2050. For these reasons, renewable energy sources promise to be a major part of whatever strategy is taken to meet this 10 TW challenge.
Many different types of renewable energy sources will likely contribute to our future energy production, but each source can only extract a finite amount of power. Hydroelectric resources account for only 0.5 TW possible energy production, capturing energy from all tides and oceans only 2 TW, implementing geothermal energy over all land area, 12 TW, all globally extractable wind power, 2-4 TW, and the solar energy striking the earth, 120,000 TW. While all of these options will likely contribute, only solar energy stands out as the most viable choice to meet our future energy demand. Despite this vast resource, solar energy production remains less than 0.01% of current energy production and thats why i’m getting into solar.”
they answer.- “oh..myy”