Ontario witnessed a tremendous increase in clean energy installations after the province implemented its feed-in-tariff program in October, 2009. The program offers high prices for power fed into the grid from renewable sources. This has drawn international manufacturers, project developers, and power generators to the province, who are interested in establishing new business ventures or enhancing existing facilities.
According to a recent report by the US’s Interstate Renewable Energy Council, Ontario would have ranked third, if it were a US state, for its high number of solar photovoltaic installations in 2009. Such exciting developments have enticed global giants to invest in Ontario’s expanding green industries.
Billions in Investments into Ontario’s Renewable Power Industry
A consortium led by South Korea’s Samsung entered into a $7 billion dollar contract with the Government of Ontario earlier this year to develop 2,500 megawatts of clean wind and solar power. General Electric also plans to expand its clean energy facilities in the province, while making use of local suppliers to meet the domestic content requirements of the FIT program.
Another company, Vancouver’s Day4 Energy, intends to license its solar technology to manufacturers in Ontario. The company’s Treasurer and Vice President of Strategic Planning, John Stonier, says that, “The Ontario market is attractive for its size, continuing growth, and the grid energy challenges it has.” However, he also points out that the province’s solar industry is not as well established as those of its European counterparts.
Market Challenges Faced By Clean Energy Sector
One challenge faced by Ontario’s renewable power industry is volume uncertainty – an ambiguity the province hopes to clarify with its Economic Connection Test (ECT). Ontario will run ECTs every six months to ensure that the costs of expanding the power grid are balanced by the benefits. The province’s government also poses a potential threat to the industry, since it can change the rules at any time. The Ontario Power Authority caused an uproar in the summer when it abruptly changed the prices the FIT offers for power generated by small-scale, ground-mounted solar installations.
Though market risks exist for generators of clean energy, so do the environmental and economic benefits of the FIT. According to Stonier, “Ontario’s good solar resource profile will provide a strong growth market for many years to come, even after the feed-in-tariffs are phased out.”
In the meantime, however, Ontario could face other challenges beyond the realm of traditional market forces. Experts fear that the province may lack the requisite green workforce to justify $7 billion investments, rapid expansion, and increased production. Comments Jacob Travis, President of Ontario Solar Network, “Right now, financing, investment, and political will are not major obstacles to continued renewable energy growth in the province. Rather, Ontario simply does not have enough trained hands in the field to install the solar and wind technology.”
Travis’ observations mirror those of the Canadian Solar Industries Association (CanSIA) in which it determined that many solar firms across the country were already experiencing significant labour shortages, with more than half of the companies surveyed expecting the situation to worsen in the next year or so. Notes Travis, “The entire renewable energy ecosystem is interconnected, meaning that deficiencies in one area affect all others. Until the province begins taking solar training and wind classes more seriously, Ontario’s growth as a renewable energy mecca remains threatened.”
