What exactly is the new feed in tariff program?
A feed in tariff program is a way for governments to kick off the third industrial revolution which is migrating from fossil fuels to renewable energy sources.
Usually it consists of providing long term contracts to industry and the population by buying power from them that is generated by solar, wind, bio-gas or water generation. The contract prices will be calculated based on the investment made and a good return on investment, enough to encourage the movement.
In our grid based centralized power system, we will move from the big power plants to a distributed power system. For the small systems less than 10Kw this is not a problem, but for larger systems some local economic tests must be made to make sure that it is worthwhile in a particular area for the power companies to invest in changing the wires and transformers to accept the new power.
How long has this program being running?
The new FIT program started last October. There are two parts to it, the FIT and the microFIT for systems less than 10Kw. The FIT program has been very successful to date and 2900Mw in contracts has been awarded so far.
Under the microFIT program, the initial target is about 100,000 homes. So far about 16,000 applications have been received; most of these for agricultural ground mount systems. There have been only about 3500 rooftop contracts granted so far.
How does this benefit home owners in Ontario?
There are two main benefits – directly to the homeowner and then as a whole for Ontario.
1. Well first of all, to encourage homeowners to participate in the program the return on investment is set at about 8%. This means you get to sign a 20 year contract with the Ontario Power Authority and create a little business generating electricity. The 8% ROI is calculated based on the costs of buying and installing a renewable energy system such as Solar Panels. This is new to the Province and you can expect prices to change as the costs of renewable energy systems come down in price, however the 8% ROI should remain the same.
2. The big picture is that it drives a renewable energy industry, creating jobs and reducing our carbon footprint. We go to a distributed energy production from a centralized system so negating the need for building new expensive power plants, we can turn off coal-fired plants and reduce the importation of expensive and dirty power during our peak loads in the summer therefore decreasing air pollution and saving money.
How does it actually work?
You must look at it as a small business generating power. It connects to the grid and feeds your neighbourhood. The solar panels are installed on the roof, connected to a disconnect switch and then through a production meter onto the grid. You will still have your consumption meter for your regular time of day usage. You will receive a bill for consumption and a cheque from your LDC for production.
We know how bureaucratic the province can be – how complicated is the process to register?
The microFIT process for systems under 10kWh is very simple. For a homeowner the application is done on-line. After about 6 weeks a response comes back with a conditional offer. The homeowner arranges for the solar panels to be installed, the inspections and permits have to be done of course, then the local electric company plugs in a production meter and you are producing! You get a contract offer from the OPA which you must agree to within 45 days. Then you wait for the first cheque. Some systems allow you to monitor your solar panels on-line so you can see your production hourly, daily, weekly etc.
Which are the best systems?
There are really 6 things for the homeowner to look out for:
1. Domestic content. First of all it is absolutely imperative that homeowners understand that there is a domestic content requirement of 60%, assuring Ontarians that their tax dollars are kept in Ontario. Currently off-shore panels are allowed this year, but this will end Dec 31, 2010.
2. Quality system. I urge all homeowners to ensure they purchase quality Canadian made systems that are designed to last.
3. Professional analysis. I also recommend you ask a professional solar analyst to perform an assessment on your potential solar installation to give you a realistic performance estimate as well as detail any difficulties with the installation that may incur extra expense. All of this you should take into account when calculating your return on investment.
4. Avoid unrealistic ROI’s. Avoid any vendor who is providing you with crazy ROIs – I have seen 25% quoted – this is totally unrealistic.
5. Do research on products. Solar panels come in mono-crystalline and poly-crystalline formats. The mono is purer silicon and more expensive but is also slightly more efficient. The poly panel is less expensive, has a shorter carbon offset life and is usually larger in size. Carbon offset or carbon neutral life means the amount of renewable electricity it produces which offsets the amount of carbon that was produced to make the panel, typically 4 years. Solar panels can be mounted on slope or flat roofs, ground and pole mount tracker systems.
6. System design. There are also a couple of different system designs – micro-inverters where the panel produces 240AC similar to the grid and string inverters which are high voltage DC (and very dangerous). The string inverter design is much like Xmas lights, when you pull one out they all go out. The micro-inverter design is superior because shading affects only one panel, instead of all of them. Plus they emit a data signal for web monitoring.
How expensive is it and what is the return on investment?
The Return on Investment is typically 8% and systems are usually 100% financed. The system pays for itself within 7-9 years. Homeowners average 3Kw system will generate about $3000 per year depending on site and shade. A 3Kw system will cost about $25,000 installed for an Ontario made system.
How much space does it take up?
Typically you will install on a sloped roof facing south, however SE and SW also works very well. You will want to install as many panels as possible as adding to the contract later will require renegotiation of your contract.
If you are a farmer with plenty of space, I would consider a tracker system. They are more expensive but are also more efficient as they track the sun.
Do you need a particular roof or structure?
Your roof needs to be sound. A good analyst will check your roof from the attic. If you have multiple shingles he/she may recommend replacing to avoid having to de-install and re-install your panels later. Note that the panels will make your shingles last longer.
If your roof does not look sound, I would recommend an engineer look at it, possible you may need to install some better support such as blocks between the rafters.
Can it be installed on the ground?
Absolutely, ground mount systems similar to flat roof systems can be pointed directly south, These are usually ballast type systems meaning that concrete blocks hold down a mounting system and the panels are installed at the ideal angle. Tracker pole mount systems are also available in various sizes up to 10Kw or about 50 panels.
What kind of maintenance does this system need?
Typical maintenance would be a once a year check – cleaning the panels, making sure the wiring is good, tightening the bolts etc. Other than that, with no moving parts, the system is pretty much maintenance free.
Are parts freely available?
This depends where you bought them. If you have decided on Ontario made products, which is mandatory next year anyway, then parts will not be a problem.
With the amount of technology and innovation coming through each year, how long before this system is out of date?
I ran a Solar Lab, one of only 5 in the world. Believe me you should trust technology that has been tried and true and in use throughout the world for the past 30 years. The space program is still installing silicon solar cells in space craft because it is reliable and solid.
New technologies such as thin-film solar cells are still at a very early stage. Accelerated life testing shows that thin film technology does not like the sun, it deteriorates at a rapid rate when exposed to the sun.
And, what happens when the sun does not shine?
Well even on a cloudy day you will produce some electricity. When the system is designed, degradation is calculated in. This accounts for cloudy days, air pollution, efficiencies of the inverters, bird poop, dirt and dust, snow and so on. Make sure degradation is accounted for when you look at your final potential production numbers.
How many households has The Energy Store fitted out with solar panels – do you have any anecdotes or success stories?
This is very new since last October. With our partners we have installed over 100 systems to date but this is just the start. We have now over 30 analysts across Ontario and expect to sell 500-1000 systems next year. Considering there are 100,000 homes that are expected to install a system, we expect to expand quite rapidly. An anecdote would be that wherever we install a system, we get 5 or 6 homeowners from the same street asking about the system and when can they get one!
Are Ontarians and Torontonians more open to environmental solutions that may cost a little more in the short term?
We are all part of the planet; we are slowly become conscious of the need to get off fossil fuel and change our society to one that is partnered with our bio-sphere. I believe everyone is now more conscious than ever and open to investing in solutions that will improve our planet.
Where can homeowners go for more information?
You can go to our website where there is a lot of information. You can also Google microFIT and check out the OPA website. Wikipedia gives a very interesting history of the FIT program.