Average folks getting soaked by Feed-in-Tariff deals

By Bob Stewart, Kenora Miner and News

Ontario’s Feed-in-Tariff program, assigned the acronyms FIT and MicroFIT, is under fire again in some quarters. This is nothing new.  The program, designed to encourage small-scale “green” source electrical production, has been under attack since the government revamped the price it was offering under 20-year contracts back in 2009. At that time the price on offer ranged from 8 cents per kwh for water power, to 11 cents for wind generation to a high of 42 cents for solar power. Those simple rates were on offer to anyone, no matter what size the installation.

Under the new program, which set up a two-tiered pricing schedule with higher prices paid for really small-scale generation — 10 kW or less — the price for solar nearly doubled, going to 80.2 cents, while other sources received smaller price boosts, ranging from 11.1 cents for landfill gas to 13.5 cents for wind.

Larger producers, up to 500 kW, can now earn from 10.3 cents for biogas generation to a high of 71.3 cents for roof top solar arrays up to 250 kW in size and 63.5 cents for those up to 500 kW.

The offer is so attractive that 25,000 people have submitted applications under the program over the past two years. To date 3,700 are up and running, another 2,500 are waiting hook up and 13,800 have been granted conditional approvals pending their local utility’s ability to connect them to local distribution lines.

The government clawed back the solar rates a bit last year — cutting the price for small, ground-mounted solar arrays to 64.2 cents, but the rates, which come with inflation protection escalation components for all but solar contracts, are still far above what other generation sources receive.

Large producers — those with megawatts of capacity and pumping out gigawatt hours of electricity annually using water, nuclear or natural gas as a fuel — are mostly on fixed contracts that come up for renegotiation every few years with prices in the 5 cent to 6 cent range at present. Others are paid a fluctuating market-based hourly rate based on when their power is needed that can range from less than a penny per kwh to a dollar or more at peak times, with the average currently working out to 3.3 cents per kWh.

Of course, regular folks don’t pay 3.3 cents for their electricity, we pay an average of 7 cents a kwh these days — the extra 3.7 cents going to cover the higher cost paid to all those big generators on set-rate contracts and the new, even higher cost, FIT producers.

The latest kerfuffle over the FIT program is coming from a few small scale would-be solar sheiks in southern Ontario who are complaining that after having been given the go-ahead by the province to build their mini-generating plants, their local electrical companies are telling them they can’t hook up to the local grid system immediately because they aren’t yet capable of handling the inputs.

While the Ontario Power Authority, which governs the FIT program and awards the power purchase contracts, includes in its agreements and general literature cautions about assuring grid hook time frames with local distributors before proceeding, the would-be power producers apparently didn’t bother to read the fine print.

Three of them near Chatham, Ontario are even talking about filing a lawsuit claiming they’re out-of-pocket $175,000.

Some may sympathize with them, I don’t, nor should you.

People like Olav Natvik — promised 80.2 cents per kwh for generating electricity — had been rubbing his hands with glee at the prospect of recouping his investment in just five years and then pocketing $180,000 in profit over the following 15 years.

Meanwhile, Strathroy area farmer Henry Aukema had projected his $85,000 investment would provide $15,000 annually in extra retirement income — the 17.6 per cent rate of return being much more than his $85,000 would ever buy in a RRSP or annuity.

The trouble is that the $180,000 and $85,000 wasn’t coming from some mysterious money tree, nor from some huge government stockpile of cash in the basement of the Pink Palace — it was coming from you and me, by way of the extra pennies per kwh that quickly add up to dollars we’re paying on our monthly power bills.

I don’t know about you, but I have trouble enough tucking a few dollars away each payday to bolster my own retirement fund, I don’t appreciate having to fund some else’s as well.

That in a nutshell is the critical flaw in the government’s microFIT program — it is a reversal of the old Robin Hood cliche of robbing from the rich to give to the poor.

Average folks don’t have the $75,000 to $100,000 needed upfront to install a solar array of sufficient size to benefit from the microFIT program, yet average folks are the ones who’ll pay for the program and the profits for those who do over the next two decades.

It is robbing from the poor to help the rich get richer.

11 thoughts on “Average folks getting soaked by Feed-in-Tariff deals

  1. “It is robbing from the poor to help the rich get richer.”
    Yup, I haven’t heard anything lately about giving $10000 to the rich who can afford a new electric car. Perhaps that was a little too ambitious even for a greedy man such as Dalton McGuinty?

  2. Sick Turbines,
    Isn’t that paying people to buy electric cars? How else were they going to sell them?

  3. Have to go to those education centers to find out what the plan is for when the government has sucked the juice out of the car battery and it is -30 overnight…

    How is that going to work…call up the charging station for boost?

  4. “Ontario’s vision to have one out of 20 vehicles to be electrically powered by 2020 is moving forward.”………………………this quote from the above Ontario website is another “pie in the sky” statement that makes no sense whatsoever when real people with real world bank accounts even think they will part of this Scheme (Scam) are as far outside the loop as his Green Energy Plan is.

  5. If you are looking at the loading on the electrical system. This plan would only make sense in new suburbs where there are new high(er) capacity transformers that have not been maxed out. However, this is where the range of cars would be most restrictive making them less useful.

    If you prioritize the range of the cars, as the most important parameter, the urban centers would of course be the most logical place to “push” the electrical cars. However, the city centers most likely already have electrical systems close to maximum capacity.

    So no matter how you cut it the stars won;t line up very well. Sounds like a great plan in line with our new values of “Green” and “Stupid” — on that basis I endorse it. 😉

  6. McGuinty using tax dollars again to fund the rich. This mans agenda is untouchable. Is it time to shoot out the solar panels and tag the electric cars? None of us agreed to such a waste of tax payer dollars!

  7. “Ontario is home to Better Place’s Canadian head office.
    The province invested $1 million in the Better Place demonstration centre and charging network.”
    How much more is this unknowingly going to cost us?

  8. “The EV incentive program is open to persons, businesses, municipalities, non-government organizations and non-profit groups. Applicants can receive incentives for no more than five vehicles per calendar year.
    Who can apply for the incentive?

    The EV incentive program is open to persons, businesses, municipalities, non-government organizations and non-profit groups. Applicants can receive incentives for no more than five vehicles per calendar year.”

    “Q26: What are the benefits of a green plate?
    A26: Electric vehicles with green plates will have access to the province’s high-occupancy vehicle (HOV) carpool lanes on 400-series highways until June 30, 2015, even if only one person is in the vehicle. HOV lanes are otherwise currently reserved for vehicles carrying two or more people.”
    I guess there will be no need to tag a vehicle, the smarmy “Green” license plates will do it nicely. Riding around on our tax dollars, killing us with hydro bills.

  9. Now we can re-name the HOV lanes to Hydro One Vehicles from High Occupancy Vehicles………..then we can see for ourselves every day of our lives who NOT to be friends because usually one “depends on friends” for support and help during times of need …………having one of these people as a friend would be like trying to “kiss a snake!”

  10. Speaking of electric cars…check this link: http://www.wheels.ca/article/asset/794286.

    Seems it has now been confirmed that if you plan on driving the Chevy Volt in northern climates–such as Canada–in the cold weather, you will not get the “battery range” claimed, and you will want to dress warmly!

    A considerable amount of the “battery” power is used to heat the cabin resulting in a drop in “battery range”, according to Motor Trend magazine.

    It states, ‘Using an external thermometer, the Volt’s heater was set to 24 degrees Celsius, but the cabin temperature was closer to 18C. However, the footwell temperature reached about 28.4C.

    Apparently, a warm footwell plus heated seats is Chevrolet’s strategy to make Volt drivers feel warm.

    The result led to the review calling the Chevy EV as “a sweater and gloves commuter car for northern-tier Volt owners.”’

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