MicroFIT (Feed-in Tariff) Solar Power in Ontario:
How to Generate Electricity from Renewable Energy, Make Money and Create a Sustainable Future
Develop a plan
In order to develop a plan that will allow you to make a decision on whether to proceed with a solar system on your roof, you'll need to get the details on all costs, permits, and contracts. Here it is easy to get confused or start to worry about how confusing everything appears to be. In the name of keeping things as simple as possible, start by finding a solar system supplier that has done this type of installation before. Check their references. Get them to explain the entire process to you. They should be saying that they will help you every step along the way. Speak to a few different providers. Ask the same questions of each and compare what they are saying. If things don't conform to your understanding then ask for further clarification.
Hopefully, you've read through the OPA FIT/MicroFIT information at their web site. It is worth starting the contract process early on so that you can get a sense of how their contracting process works. Don't worry, you won't be signing the contract until you have all the information required and until you are comfortable that you want to move ahead. You'll be able to save what you've completed and read through the sections you still need to complete to get a sense of what is required or what you are missing. Starting this process can help you determine all of the questions you'll need to ask your solar system supplier, LDCs and others.
So, does you house or commercial building have what it takes to hold up some solar panels? Is there a place on the roof where you can mount and face the panels south without any shadows or other obstructions during any part of the year. Remember that the sun is much lower in the sky in the winter than in the summer causing very different shadow patterns from obstructions. Also, it maybe worthwhile mounting the panels above windows on the south side of the building as an awning that protrudes from the side of the structure as this will make use of the panels for two purposes, shading in the summer from the sun, and generating electricity all year long. Of course, you'll need to get some expert advice on these matters but the first step is for you to decided whether you think it is conceivable at which point you can proceed to get confirmation. There may be a cost to getting a building permit. In Toronto it can be $95 for a permit plus if engineering drawings are required additional costs may be involved.
Have you thought about a budget for this project? Typically bigger the better from a return on investment perspective. You may be limited by space or load capacities imposed by your roof or structure. Get a rough sense of how much space/panels you think you might be able to put up. Call some solar system suppliers to get a rough idea of costs. My 1.2 kW solar system on the RESOP program was $14,000. This is a rather small system where the inverter and installation costs are high in proportion to the total generating capacity. Assuming you are able to budget for a larger system the more of your money will be going into the generation side of your investment. Ideally for a house, you should get into the 3-5 kW array size. For larger commercial buildings or industrial roof systems you may be able to fit a 10kW array (make sure you are under the 10kW limit imposed for MicroFIT...or if your roof and budget allow for a much bigger system go for the FIT program which supports solar projects of a greater size albeit with lower rates). The only solar system supplier I've ever worked with is Solera Energies. You should be able to do some searching online to find other solar system suppliers in your area that can provide information and quotes. Another way to get good pricing and quality system providers is through neighbourhood purchase groups like WISE, RISE and others. A central clearing house for the neighbourhood purchase program seems to be a group/web site called ourpower.ca. Check it out. They have some good information and example projects to learn from. The Canadian Solar Industry Association (CanSIA) can also provide information on system providers.
For some detailed information on a much large installation rated at 100kW, see the Exhibition Place, Horse Palace report. This system and the report provide some good insight into the performance variation that may be expected with different angles. Also, the numbers are detailed and analysis quite extensive. The system cost $960,000 fully installed. Several different panel types were incorporated including Sharp and Evergreen:
"The Project, started in 2005, was installed in summer of 2006 at a cost of $960,000. This first year of monitoring resulted in the identification of
several key operational issues and challenges, including complications with inverters and monitoring
equipment, shading issues, and data collection and management issues. Securing interconnection
with the electricity grid in order to sell the power being produced was also a complicated
and protracted matter.
At the end of the first year of the pilot project, an external technical advisor was brought on to
correct some technical issues and provide ongoing support to the project. At this time, a problem
with the baseline performance modeling used to assess the project was identified and a decision
was made to extend the pilot data collection for a second year. A team of project supporters,
composed primarily of Exhibition Place staff, took over monitoring and management of the site
and began regular meetings to ensure that data flows and technical matters were handled quickly
Once baseline performance modeling was adjusted to reflect more realistic assumptions, expected
output from the plant was 103,275 kWh/yr. In 2008, the Horse Palace PV Pilot Project produced
96,724 kWh. The slight underperformance (six percent) was caused by energy production losses
experienced in part of the array due to a problem caused by night-time power use by inverters.
Simple payback for the project is 16.7 years when taking into account grant support for the initiative
and the Standard Offer premium of 42 cents per kWh (without the grant support, the system
would have a 30.5 year payback at 42 cents per kWh, and closer to 50 years if the system switched
to net-metering at 12 cents per kWh after the 20 year Standard Offer contract ended). The plant is
now participating in RESOP and receiving monthly payments, although difficulties in establishing
the interconnection delayed payments for a full year at a loss of $36,000 in expected income."
Get three quotes from different solar system providers. No doubt this process will require that you quickly refine your requirements including mounting decisions, permitting, array size, panel options, inverter types, and connection options. My experience has been to determine my own budget for the job as much can be adjusted in the array size to accommodate the budget. So, ideally you'll want to invest $20,000 to $40,000 for a residential roof mounted solar system. For a commercial or industrial building you may be able to justify and support a much larger budget. Scale really does help, so budget and work out financing for as much as you can to allow for as large of a system as possible. The only other factor are the FIT rate differences depending on size and other factors...check the FIT contract. The MicroFIT must be under 10kW, which may be the other factor to keep in mind if you are want to get the 80.2 cents/kW rate.
Most of this process is actually quite easy. The hardest part MAY (hopefully less so as time goes by) be contacting your LDC in order to get a quote on having a new meter installed for your solar generating system. Some utilities seem to be providing this new meter for free, seemingly as an incentive for this worthwhile cause. Others, like Hydro One who I've had to deal with, charge $800 (it may be more or less by the time you get a quote). In any case, these large utility companies can be difficult to deal with because of their size and their lack of interest in supporting these types of programs. It would appear that the FIT/MicroFIT program may change that as the OPA seems to be leading the charge to try and make this process easier. As of this writing, however, we will have to see how well they are able to follow through on that goal.
Hopefully, over a period of a week or two you should be able to get three quotes and lots of information from solar suppliers. You should be able to complete more of the OPA contract information requirements as you go along. The LDC should also be able to explain how much it will cost and when they might be able to put in a new meter for your generating system. This starts to complete the picture of a budget and potential dates/timelines for getting things operating. Your solar system provider should be able to help resolve any questions related to the LDC with contacts they have at these utilities. Also, ideally the references provided by the solar system provider can give you a sense of what the process was like for them and how they overcame any issues with the LDC (assuming the LDC is the same one the services the grid in your area). An example of what a quote should include - here is the one I got from Solera for the 1.2kW solar array on the RESOP program.
Tax, interest and inflation
Other cost concerns to build into your plan includes borrowing interest costs and tax implications. Talk to your accountant regarding both of these concerns. Related to this is the rate of inflation which will affect your return on investment.
'There's also that nagging tax thing. Your three-kilowatt solar system might be small, but in the eyes of the Canada Revenue Agency, your contract with the power authority makes you a business. This means the income you earn from selling kilowatts is taxable.
But don't stress, says Toronto resident Mike Brigham, who since January has been feeding power from his 5.8 kilowatt solar system into the grid under the old standard offer program.
Brigham says your taxes might become more complicated, but you can reduce your taxable solar income by depreciating the capital cost of your PV system. If, for example, you earn $3,000 each year you can bring the taxable portion to zero by deducting $3,000 each year over 10 years – that is, until the $30,000 cost of the system has been fully depreciated.
Knowing what all the potential costs are going to be you should be in a position to determine which vendor you want to proceed with. On a spreadsheet you can work out the return on investment based on assumptions that the quotes should provide regarding the amount of electricity you can expect to generate. In order to help you with this process I've developed a Solar energy investment calculator.
The quote I got estimated electricity generation amount that is 10% less that what I am actually generating so far (early days on this though...I am only ten months in on this project). So, keep in mind that the quotes estimated generating capacity will be higher or lower than you get in reality. A good installer would estimate on the lower side, so it may be that you can expect to generate 10-20% more that estimated in a good year. The estimated generating capacity will also be a reflection of the different solar panels being proposed, each with different levels of efficiency at converting sunlight into electricity. Higher efficiency panels will tend to cost more while generating more electricity to compensate. The return on investment calculations should allow you to compare resulting long term investment benefits of each system whether they be lower cost, lower efficiency panels, or higher cost, higher efficiency panels.
The quote should also provide details on permits required and dates when the system may be installed and completed. The LDC quote for a new meter should also provide you with a sense of when the LDC can coordinate a "disconnect" in order to install their new meter in coordination with the completion of the solar system install. Also, you'll need to plan to get Electrical Safety Authority (ESA) to inspect your setup before going live on the grid with it. Go back to the OPA MicroFIT web site and updated your contract details in preparation for final submission. This should also provide you with dates that you can use for planning the start of your generation system and when OPA, through the LDC, will start to pay you.
You now should have the components you need to develop a plan for implementing your solar system. The quotes and information provided by the solar system suppliers will allow you to finalize your budget and prepare for final negotiations. Discussions with your LDC will provide the details on how to get a new meter installed and when this might be possible. If any structural work on the roof is required, that quote and permitting should be determined at this point. You know the what, where when, why, and how. Review the and compare options using the Solar investment calculator tool. A more detailed calculator is available for free from the government of Canada called RETScreen (renewable energy and energy efficiency technology). If you have any questions at all get them resolved now. Time to make a decision.
About John Wilson, the founder of NaturalLifeNetwork.com
Wilson Natural Documentary DVD
A great companion to this resource is a documentary DVD produced by John Wilson. If this information interests you, you'll love the documentary about how John Wilson built the Wilson Natural Home. Check out the documentary video that describes the entire process - click here.
Toronto Star article - Natural dream
“When it comes to living green, you can't do much better than the Wilson family. On most days, their hydro meter even runs backward at times, as they export electricity to Ontario's power grid. It's a great example of what one family can accomplish in doing what's right for the environment.” Toronto Star, August 30, 2003
About the Author
JOHN WILSON is an award-winning owner, builder and producer of sustainable homes and lifestyle media. He is the producer of Natural Living: The Wilson Natural Home documentary and the founder of the Natural Life Network (www.NaturalLifeNetwork.com). He lives in the Wilson Natural Home with his family near Toronto, Ontario, Canada.
Meet the author, as featured on my house TV show
Want to learn and see more, buy the documentary video DVD
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