Silfab Ontario has been making solar panels for barely four months in a refurbished factory west of Toronto, but already employees are nervous about the security of their jobs.
Plans to hire more people and expand production are on hold as demand for solar parts wavers and stock sits unsold. Several companies who install solar panels have been unable to pay for their orders because they’re waiting for assurances the power projects will be connected to Ontario’s electricity grid. A backup in the approvals process has brought the fledgling industry almost to a standstill.
Ontario has styled itself a leader in renewable power, offering some of the most lucrative incentives in the world to solar and wind producers since 2009. The government of Premier Dalton McGuinty has vowed to shut down all of the province’s coal-fired power plants, create 50,000 clean energy jobs and build a lasting green industry to reinvigorate the beleaguered manufacturing sector.
The province’s green-energy economy should be roaring, but it’s not. Thousands of jobs and $20-billion worth of investment commitments from around the globe are at stake.
“The possibility of expanding in 2011 would require a miracle, and I don’t expect it to happen,” said Paolo Maccario, Silfab’s chief operating officer. “We have some very good customers who cannot pay us, and obviously, it’s kind of difficult to run a business in that situation.”
It seems unfathomable to many that miracles would be needed in a government-supported industry created with great fanfare just two years ago. The Liberals contend the Opposition Conservatives have wrought tremendous uncertainty in the renewable energy market by vowing to scrap incentives if they win the October provincial election. This is a factor, but the green-power economy was fracturing before the Tory pledge.
Silfab is not the only solar-parts manufacturer struggling. Other recently opened factories have laid off employees, and dozens of solar installers are without work. Many rural Ontarians who have proposed solar projects are worried about losing their investment because they’re not sure when – or if – they will be hooked up to the transmission system.
These struggles will be laid bare at an Ontario Energy Board hearing on Thursday, when the nascent solar industry squares off against Hydro One Networks, the province’s largest utility and the one fielding most connection requests.
The provincially owned utility is asking the regulator for more time to deal with the influx of applications for small renewable energy projects. The utility insists it has been overwhelmed by connection requests, unable to meet mandatory deadlines for assessing projects since November. The industry, however, contends the delays are unwarranted and significantly harm their businesses and threaten jobs.
Some companies are already regretting making the move into Ontario.
“If I had thought that the utilities would simply not obey the rules and the government would do nothing about it, I would have never started here,” said Michael Carten, chief executive of Calgary-based Sustainable Energy Technologies, which makes solar inverters.
The industry, he asserted, has been “sucker-punched.”
At the start, the prospects seemed hugely promising. Along with guaranteed above-market prices for the production of renewable energy for 20 years, the Ontario government introduced domestic content rules for solar and wind projects, aiming to foster a new manufacturing niche. (The rules have triggered a complaint from Japan to the World Trade Organization.)
A green rush was born, particularly in solar, for which the most lucrative rates were offered – ranging between 44.3 cents and 80.2 cents per kilowatt hour. As solar applications – everything from homeowners wanting to install roof-top panels to large solar farms – poured in, developers, manufacturers and investors projected that 500 megawatts of production could be brought online in 2011. It was an appealing amount.
In the boardroom of his Mississauga factory, Mr. Maccario pulls out a bi-weekly update from the Ontario Power Authority, the government agency responsible for the province’s electricity system. The numbers don’t look good. They haven’t for months.
