Joe Botscheller and his neighbours have a problem. They’re tobacco farmers, and demand for tobacco is falling fast. This summer, they’re going to start harvesting something new: solar energy.
“There are a lot of small farms. On 100 acres right now there aren’t a lot of crops a family can live on. A lot of the cash crops require more than that. We were looking for another crop to add to the mix to keep the farms around,” says Mr. Botscheller, who has grown tobacco, rye and ginseng on his family farm in Windham Centre since 1980. “Harvesting the sun and the wind will provide a steady income and hopefully help sustain the rural communities in this area as well.”
With interest in renewable energy growing in recent years, particularly following major investments in wind energy in Ontario and Quebec, Mr. Botscheller and other area farmers started thinking it might be a way to save the family farm. They started having town hall meetings and discussing the idea of small-scale power generation.
Last October, Ontario passed a new Green Energy Act that fixed rates that will be paid for renewable energy. Those fixed rates, or Feed-in Tariffs (FiT), range from 11.1 cents per kilowatt hour for power from landfill gas to 80.2 cents for small solar installations. The act, which is similar to programs in Europe, was the first of its kind in North America.
In March, about 10 members of Mr. Botscheller’s group, Farmers for Economic Opportunity, received licences from the Ontario Power Authority for solar installations under 10 kilowatts. His own solar array will take up an area 7.6 metres square where his tobacco drying shed used to be. Initial investments for these small arrays range from $60,000-90,000, he says, and they’re expecting returns of 15-20 per cent annually.
Will it save the family farm?
“It won’t do it on its own, but it’s a step in the right direction,” he says. “If you’re looking at an extra $1,100 a month, it all helps.” It also helps that the FiT is guaranteed for 20 years.
Before Ontario introduced its program, solar panels were a rarity in Canada. At the end of 2009, Canadian solar installations could produce, at best, slightly less than 100 megawatts of electricity. Within the next three years, that will jump to 650-700 MW, according to the Canadian Solar Industries Association. Almost all of that increase will come in Ontario.
Solar is becoming more attractive because the cost of photovoltaic panels has been coming down as demand has increased. But business is booming in the province since the OPA started handing out licenses this spring. Most of the 1,394 licenses approved since December have been for solar projects, particularly small rooftop ones.
The program is not without its critics. Electricity prices in the province are expected to increase 25 per cent by the end of 2011 and continue rising in 2012. Part of that will be because the feed-in tariffs are significantly higher than prices currently paid for electricity from coal, nuclear stations or hydro dams in the province.
The price increase, however, is not entirely because of green energy. The province’s new Harmonized Sales Tax accounts for about a third of the rise and time-of-use pricing will increase it a bit more for typical customers.
“The cost of energy in Canada is low in relation to the rest of the world,” says Elizabeth McDonald, president of the Canadian Solar Industry Association.
The government has defended price increases as a necessary stimulus for renewable energy development in Ontario and a way to diversify the economy. Ms. McDonald’s group estimates that 15 jobs are created, in manufacturing, installation and other fields, for every megawatt of solar installed. Currently, the solar industry in Canada employs between 2,000 and 3,000 people. The 652 MW of solar approved in Ontario would, by that estimate, result in 10,000 jobs being created.
Some of those will be in Kitchener, Ont., home of Canadian Solar Inc. The company has so far been awarded contracts to manufacture and install 176 MW of photovoltaic panels, 28 per cent of the solar projects approved in the province. To meet demand, the company will build a new manufacturing facility in the province, employing 500 people by 2011.
