Developers of mid-sized green energy projects will benefit from an extension of current domestic-sourcing requirements under the Ontario Green Energy Act‘s feed-in tariff (FIT) program, according to a letter sent to developers by the Ontario Power Authority (OPA).
The Wall Street Journal reports that mid-sized solar projects (around 250 kW) now have until April 30, 2011, a four-month extension, to meet a requirement that 50% of the project’s labour and materials be sourced from within Ontario. After that date, the number rises to 60%. Wind power projects have until 2012 to meet their current 25% targets, after which 50% of all parts and labour will have to be locally sourced.
FIT Program Gives Boost to Ontario Economy
The feed-in tariff program, outlined in the Green Energy Act, encourages the growth of the green economy by allowing small- and medium-scale producers of wind, solar, and other forms of renewable energy to feed electricity into the grid at above-market rates for a fixed term. Solar energy currently commands the highest premium - up to 71.3 cents per kilowatt hour for rooftop projects over 10 kW and even more for some smaller projects, which is significantly higher than the market price of 6.5 cents.
To offset the effects of the inflated pricing, producers must meet requirements for materials and labour sourced in-province, creating manufacturing jobs, long-term economic growth, and varied green education opportunities, such as solar training classes.
The Rationale Behind the Green Energy Act Extension
According to the OPA’s spokesman, Ben Chin, the extension is for “purely administrative” reasons. It is needed to offset delays in processing FIT applications. The OPA was swamped with an overwhelming 1500 applications for mid-sized projects between the FIT’s launch in October 2009 and now.
The extension will also give Ontario’s growing green economy time to catch up, particularly in the area of photovoltaics - a sector that has had the greatest difficulty meeting the local-sourcing requirements. Moreover, in order to actually design, install, and maintain many of these projects, the first big wave of students must complete solar training and other classes designed to bring them up to speed on green technology and its implementation.
