For two years, Ontario farmer Russell Elliott has been waiting to supply solar power to the province’s electricity grid.
He was one of thousands of Ontarians who took the government up on its green-energy incentives, withdrawing $91,000 from his savings to erect a small solar-power project at his farm west of London. It seemed like a wise investment, as safe as a GIC but with a much better, government-backed rate of return – 11 per cent or so.
However, in Ontario’s rush to develop renewable energy, a significant obstacle emerged for many small power producers, particularly in Southwestern Ontario: There wasn’t enough capacity on the aging grid to accommodate all of their built projects. With so many bank loans and retirement nest eggs on the line, the provincial government has pledged to help, but more than a year after that promise, Mr. Elliott and about 3,000 other applicants are still waiting for a resolution.
“It’s my money, my retirement money,” said an exasperated Mr. Elliott, 66, who has requested his solar project be moved and connected elsewhere but wonders whether he should instead opt for a refund. “They can’t be trusted,” he said of the government. “They don’t do what they say they’re going to do and if they do, it takes so long, you can’t remember what they said in the first place.”
Stranded power projects are among the myriad problems hampering Ontario’s green-energy ambitions. The province has faced harsh criticism over delays in dealing with solar and wind proposals, and over the time it has taken to restart renewable-energy incentives, which were suspended during a review. Introduced in the fall of 2009, the Liberal government’s feed-in tariff program offered to pay among the highest prices in the world for solar and wind energy. Ontario also set domestic-content requirements for renewable-power projects in the hope of spurring a green manufacturing industry to fill empty factories and replace lost jobs.
Although the lucrative incentives have boosted wind and solar production, the program has been riddled with setbacks. A flood of applications overwhelmed the government and many utilities early on and opposition to wind farms remains fierce in parts of the province. The Auditor-General has chastised the government for inadequate oversight of billions of dollars in green-energy contracts, while several solar-parts manufacturers shuttered shortly after opening, pointing to a climate of uncertainty in Ontario.
The latest glitch is a World Trade Organization ruling that, according to groups familiar with the judgment, has found that the province’s domestic-content requirements breach international trade law.
Ontario Energy Minister Chris Bentley won’t comment on the trade ruling until it is formally released. He said the province remains committed to expanding renewable energy as it weans itself off of polluting coal power. Ontario has pledged to close all coal-fired power plants by the end of 2014.
After temporarily halting its green-energy program a year ago to examine how applications were being handled and to lower payouts, the province restarted incentives in July, although only for micro-projects. A window for bigger projects – 10 to 50 kilowatts of electricity – opens Dec. 14. Large renewable-power proposals will have to wait until next year.
The long standstill has prompted some power producers, such as SkyPower Global, to shift its focus away from Ontario to international markets. But the Energy Minister maintains the province needed time to improve its renewable-energy program.
For example, projects that have community support will now get greater priority and it should not take as long for applicants to find out whether they can connect to the power grid.
“Getting it right, making sure our program is on a very secure foundation for the long term, was important,” Mr. Bentley said.
The minister assured Ontarians that the province has not forgotten about stranded solar projects, such as Mr. Elliott’s. In May, the Ontario Power Authority asked project owners to apply for one of four options, which include relocating solar panels or combining with other projects to create a solar farm. Or they can ask for their money back, letting someone else take over the project.
This is what Rita Van Geffen wants. Like Mr. Elliott, she tapped her retirement nest egg to build her ground-mounted solar project, spending just over $100,000.
The Ontario Power Authority had conditionally approved their projects in 2010, but they were later rejected by the local utility, provincially owned Hydro One. As a result of these and numerous other cases, the province revised rules in December, 2010, no longer issuing conditional offers before a grid connection was secured.
“I believe in green energy and I thought it was a safe investment,” said Ms. Van Geffen, 63, a former sheep farmer. With the legislature prorogued and the governing Liberals searching for a new party leader, she is worried a resolution will be delayed further.
“It’s been two-and-a-half years since I started this,” she noted. “I just want to get out. I just want to get my money out and put it into something else.”
Steve Taylor, meanwhile, isn’t ready to give up on the government program. He and his father took out loans worth about $500,000 to build four micro solar projects on their farms. Two have been hooked up to the grid, but the others stand idle. Instead of making money on Ontario’s green-energy promise, the pair are dipping into their farm revenues to cover their loan repayments.
“Once you get hooked up and working, it’s great,” Mr. Taylor said. “But there is too much debt for what’s coming in yet … It’s hard to pay for something when you have no income off them.”