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Solar power is electricity made by capturing sunlight. It is just one of many clean energy sources needed by the province to replace dirty coal- fired plants.

The Niagara Falls hydro electric project would never have been built without government subsidies. In order to get a large number of small solar projects installed quickly (and produce an estimated 25,000 new jobs) the Ontario Government wisely provided an incentive program in November called the Micro FIT program. Consumers are currently being charged less than 10 cents per kilowatt for electricity. The government has undoubtedly heard a lot of negative comments with the apparent disparity between this price and the 80 cents per kilowatt being offered for solar power.

On Friday, July 2, Energy and Infrastructure Minister Brad Duguid’s Ontario Power Authority slashed contract energy prices for ground-based solar power systems. This change in payment from 80.2 cents per kilowatt to 58.8 cents has thrown the fledgling solar power industry into a tailspin. The hundreds of companies selling solar power systems had just started up in the fall of 2009. It is extremely uncertain how many will survive this body- blow. One of the biggest obstacles to selling these systems was the lack of trust in the 20-year government contracts. Nothing has actually happened to change any of the Micro FIT contracts already approved by the Ontario Power Authority. However, the uncertainty caused by the reduction has people running to their lawyers to double-check whether the government can weasel out.

The injustice in the approval of some ground-mount systems and not others is astounding. It appears ext-remely arbitrary as to when and how people were able to get approval.

What is worse is that many companies went ahead and started building projects to get something accomplished in the summer building season assuming that it was a mere formality to get the approvals. All the interested solar power companies ramped up production and invested money in numerous areas to be able to meet the demand for the systems.

Farmers were the majority of the buyers of these systems as they had the equity in farmland to be able to raise the capital necessary to buy a $95,000 ground-mounted tracker system. Most previous financial aid programs for farmers were at the taxpayers’ expense with less measurable returns. This solar energy initiative was an opportunity to add stability to farming operations. Solar- power-generation installations were to provide over $14,000 gross annual income. Is it any wonder that the FCC and other financial institutions were prepared to finance these projects?

Most government farm programs are set up with a fixed basket of money which is available on a first come first serve basis until it is used up. In contrast, the application window for this program was to stay open until November 2011.

What probably caused Ontario Power Authority bean counters’ ulcers to flare up was when they looked at the applications flooding in, and calculated the amount of money needed to pay for the power for the next 20 years. But this needs to be put into perspective. The limits to the number of systems that would be approved were originally stated to be one to two per cent of Ontario power needs. This means the Ontario Power Authority should have been prepared for over 40,000 projects. When the government pulled the plug there were only 15,000 applications.

The last-minute change in the rules has been defended by minister Duguid as a cost savings in order to plug a loophole that was giving investors in ground-mounted tracking systems huge windfall profits. Returns of 25 to 30 percent are being thrown around by the minister. In actual fact the returns were a much more modest 15.4 percent.

These sun tracking systems cost almost $20,000 more per system to install than a roof mounted system. Seventy percent of the applications for a Micro FIT contract were for ground-based tracker systems because farmers quickly realized that these systems produce 40 percent more power. While this will cost the government and the taxpayers more money in the first 20 years it will also produce 40 percent more power in the second 20 years after the contracts have finished and the solar panels are selling electricity back to the grid at world prices. The main thrust of the Green Energy Act is surely to produce more green energy, not less.

Caught up in this whole debacle are the fixed ground-based systems, which, though cheaper to install than a roof-mounted system, do not get the extra power generated by a tracker system. They do have a lot of advantages in that they are easier to service and maintain and don’t require an engineering assessment for structural safety for a system to be mounted on the roof of an existing building.

Ironically, if the decision is reversed and the tariff is returned to 80.2 cents per kilowatt the damage to the fledgling Ontario solar industry may have already been done. I think everyone in the solar energy industry is hoping Minister Duguid will follow the example of his cabinet colleague Energy Minister Gerretson who scrapped a plan to charge consumers ECO-fees on a variety of products.

Entering into a long-term commercially-sensitive contract requires confidence and trust. Whatever the shortcomings or apparent excesses in the current system I think prior consultation with the stakeholders in Ontario’s solar industry could have led to a more equitable solution. Unfortunately, this recent development has allowed many farmers once more to say “You can’t trust the government!”◊

By John Beardsley

Solar power is electricity made by capturing sunlight. It is just one of many clean energy sources needed by the province to replace dirty coal- fired plants.

“Why can’t I lose a job like that,” said Dave Winston the other morning, pointing to a story in the paper that Tony Hayward was being replaced as the head of British petroleum – but getting a package of $20 million to leave.

“The problem is you wouldn’t have got the job in the first place so they’d want to get rid of you bad enough to pay you”, said Cliff Murray.

“It kills me that in some jobs people can screw up and they still walk away with a bundle,” said Molly Whiteside, as she refilled the coffee cups.

“Yeah, if I had a manure spill and it got into the river, I’d be fined or go to jail,” said Dave. “This guy gets $20 million for ruining the lives of millions of people.”

“F. Scott Fitzgerald said the rich are not like us,” said Cliff.

“That’s for sure,” said Molly. “Look at all the fuss over Conrad Black getting out of jail. How much did CBC spend to send all those reporters to Florida and Chicago just to cover that?”

“Ah yes, but he’s a man of the people now,” said George. “Didn’t you read how he was helping his fellow prisoners get their high school diplomas?”

“I thought I was going to barf,” said Molly. “All of a sudden the media forgets all the people he cheated.”

“Yeah, but now the law he broke isn’t a law anymore,” said Dave.

“I wonder how much he spent on lawyers to get that changed,” said Cliff. “That’s why the rich aren’t like us.”

“Well neither are the politicians,” said George. “I mean, imagine if any of the rest of us were to try to pull what the government has done with this solar energy thing – promise one price, get a lot of people to put up solar panels, then say they won’t pay that price after all.”

“Reminds me of those bank commercials where they give this kid a really great toy to play with, then take it away and give him a drawing of the toy,” said Molly. “What’s the line they use? Something about even kids knowing it was wrong.”

“I think somebody figured out farmers were actually going to make some money and said ‘We can’t have that’,” said Dave.

“Even though the Green Energy Act was supposed to be the Premier’s way for farmers to get some money so they could keep producing food they couldn’t make any money from,” said George.

“I like it better when you guys just griped about the weather,” said Mabel from behind the counter.

“What’s the sense in talking about the weather,” said Dave. “You can’t do anything about it.”

“That’s what they always say,” said Cliff, “but don’t you sometimes get the feeling with all this climate change talk that people now feel they should be able to do something about it?”

“As if recycling your plastic jugs and composting your kitchen scraps is going to make it rain less,” said Molly.

“Uh-uh, composting those kitchen scraps might cause methane,” said Dave. “That’s a bad thing.”

“How many people conscientiously recycle everything, then jump on a plane and fly off on vacation,” said Molly.

“Yes but in Niagara they’re trying to solve that,” said Cliff. “They’re hoping Torontonians will just drive down the QEW and visit them instead of going to Europe.”

“Yeah, did you see all the fuss that ad campaign caused in Toronto by telling people they might want to escape the noise and pollution and crime?” said Mabel.

“But people still have to pollute to drive to Niagara,” said George.

“Just wait a while,” said Dave. “Soon the legislature will be back in session and there’ll be enough hot air in Toronto everybody can go by balloon.”◊

“Why can’t I lose a job like that,” said Dave Winston the other morning, pointing to a story in the paper that Tony Hayward was being replaced as the head of British Petroleum – but getting a package of $20 million to leave.