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.