What have recommended to the FIT Review Green Energy 2.0

December 15, 2011 at 8:27 am

The OPA’s Review of the FIT process will “examine program rules and pricing to ensure the program remains successful and sustainable.” EfstonScience submitted a letter to the OPA outlining our recommendations:

Dear Sir or Madame,

EfstonScience is an established installer and vendor of both FIT and microFIT solar systems, as well as being a science store with a 30-year history. We have more than 70 systems installed or in our development pipeline in these two programs, and have installed many off-grid solar systems prior to this. http://esolar.ca/solarinstallation-gallery/

Panel pricing is, of course, of primary importance to the design of solar PV tariffs. Currently, panel pricing is very low both in Ontario and internationally. However, with many large projects set to begin construction in 2012, we expect panel demand and pricing to rise in Ontario. Internationally, there are many factors contributing to the current oversupply of panels, but these might be ameliorated or eliminated in the next two years. Factors that could increase demand for panels in the next two years include a renewal of the cash-back federal tax credit for solar PV in the U.S.; improved conditions in the international credit markets, especially in Europe; and the international retirement of nuclear plants and expansion of solar PV incentive programs. If reliable and steady generation procurement and job creation are desired, tariff rates in Ontario should account for the uncertainty in panel pricing, and the possibility that it could rise in at least the short term.

The LTEP targets are not necessarily consistent with the FIT program’s economic development and job creation goals. The possibility of taking future capacity from the planned nuclear procurement, with its uncertain (and quite possibly over-budget) costs, and giving this capacity to renewable generation projects in the FIT program should be considered.

A majority of the jobs created by EfstonScience as a result of the FIT and microFIT programs are in the construction and installation of the systems. These jobs require a reliable and steady flow of projects in order to avoid layoffs. The FIT Program Two-Year review has interrupted this flow of projects in various ways. In the face of uncertain returns and timelines, customers are wary of applying for microFIT contracts and moving forward with the quoting and system design process. If the FIT and microFIT programs were not to return until spring 2012 or later, it would be difficult to move forward with new projects and find work for all of EfstonScience’s solar employees.

The paperwork and process involved in the building of a microFIT or FIT project is large, onerous, lengthy and costly. LDCs have varying and requirements that sometime change mid-project, which causes delays and increasing costs. We have been especially disappointed with Enersource in this way. Contracts and applications are often delayed for reasons as small as misspellings and formatting error. Single line diagrams or other highly technical system specifications are sometimes required to apply to LDCs for microFIT grid connection. In cases like these, it would be helpful if a solar vendor or installer could communicate and make changes with LDCs, the OPA and other bodies on the applicant’s behalf. Any changes to the Program Rules that might reduce the burden of paperwork would be appreciated. This would reduce the cost of projects, reduce company overhead and viability, and help to build the kinds of scale and transferability in process that would allow for the creation of world-class and internationally competitive solar installers and developers.

In this vein, the C-FIT program would also advance scalable business models in Ontario’s solar industry. An opportunity exists at this time for Ontario companies to take the lead in the future international market for residential and small commercial solar installation, project management as associated services. The C-FIT program would allow Ontario solar companies to grow internal processes that can accommodate the scale of project numbers, speed of project development, and project aggregation that will be necessary to flourish when international solar grid-parity is achieved in the coming years. The C-FIT program should be opened, or the microFIT rules should be changed to facilitate the corporate ownership of systems under certain circumstances (or with a different tariff if necessary).

There has been talk of a move to an RFP process for FIT project procurement. While this could improve flexibility for the OPA in achieving its mandates and procurement targets, it could also favour large vertically-integrated international conglomerates over Ontario’s own solar companies. Standard tariffs allow small and medium companies to develop projects in ways that an RFP might exclude them. For instance, the cost associated with carrying a project through an RFP to an uncertain outcome favours larger companies over smaller. The use of follow-on negotiations after an RFP to contract for additional procurement is more practical for a larger company than for more numerous and potentially less well known – but not necessarily less capable – smaller companies. For these reasons, we believe an advanced tariff mechanism is the best way to move forward in the FIT program.

We have attached our current brochure for microFIT systems for your reference, especially with regard to pricing. http://esolar.ca/the-esolar-ca-advantage/downloads/

In the review of the FIT and microFIT programs, a balance must be struck between the sustainability of the program and the creation of a strong local industry; between the responsibility to ratepayers and the targets of the LTEP and the tariffs and market size necessary to build and sustain internationally competitive companies in Ontario. We at EfstonScience hope that all sides can be accommodated in the new program rules. We hope that the aforementioned anecdotes and advice might aid you in this endeavour.

Sincerely,

Nick Efston, President, EfstonScience
Tim Bird, Sales Manager, EfstonScience eSolar.ca
Bob Ross, Project Manager, EfstonScience eSolar.ca