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Solar power among renewable projects languishing from Hydro One delays

Rita Van Geffen, who believes in solar power, invested $105,000 into a small solar project. The large panel, erected on one of her family's farms, has been ready to go since September of last year, but has not yet been connected to the grid.

Peter Power/The Globe and Mail

Rita Van Geffen is worried about losing her retirement nest egg. She and her daughter poured $105,000 into a solar project on her farm west of London, enticed by an Ontario government program that promised lucrative, long-term payments for green power.

Her ground-mounted solar panel has been ready to feed energy into the electricity grid for almost a year, but Ms. Van Geffen is still waiting to hear when it will be hooked up. She's not alone.

"They shouldn't have let all these people go ahead and build all these solar panels and invest all this money when they don't have a connection," said Ms. Van Geffen, a 62-year-old former sheep farmer who works at a travel agency in Strathroy, Ont.

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"I am worried sick about it. If they don't connect us, what are we going to do?"

Delays in dealing with more than 4,000 green-power proposals such as Ms. Van Geffen's are the focus of a two-day Ontario Energy Board hearing that pits the province's largest utility against the nascent solar sector.

Hydro One, a provincially owned utility, is asking the regulator for a six-month exemption from meeting deadlines for assessing and connecting small renewable-energy projects. Nearly all are for solar power, each proposing to pump up to 10 kilowatts into the grid.

A wide range of players in the solar-power industry, including manufacturers, panel installers and project proponents, are contesting Hydro One's request. They contend further delays would harm their businesses, threaten jobs and cripple investments.

"The greater uncertainty and further delays … would likely have a significant chilling effect on investment and employment within the solar industry in Ontario," the Canadian Solar Industries Association noted in written comments to the energy regulator. Some businesses, the organization added, would be forced to close or move out of the province.

This would be a big blow to Ontario's green-power ambitions.

The province has branded itself as a renewable-energy leader, offering some of the highest prices for solar and wind power in the world. The McGuinty government maintains that its two-year-old incentive program, known as feed-in tariffs, has attracted $20-billion in investment commitments and created 20,000 jobs.

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But connection backlogs, regulatory approval delays and political uncertainty related to the October provincial election have brought segments of the emerging solar sector to a near standstill.

At Thursday's hearing in Toronto, Hydro One officials told the energy board the utility has been overwhelmed by the popularity of the government's incentive program, which guarantees renewable-energy producers above-market prices for their power for 20 years. The rates are highest for solar, ranging between 44.3 cents and 80.2 cents per kilowatt hour.

Hydro One said it initially expected most solar applications would be for rooftop panels in cities. Instead, about 70 per cent of proposals are from its rural transmission territory. The company has processed nearly 18,000 connection requests, of which about 5,600 have been hooked up.

The flood of applications shows no sign of subsiding. Last week alone, 668 project proposals were sent to the utility, compared with about 100 a week in the incentive program's early days in 2009.

Hydro One is not asking for more money or people to deal with connection requests. It wants an extra six months to clear the backlog and move toward compliance with deadline regulations.

Oded Hubert, Hydro One's director of regulatory compliance, told the hearing the province's green-energy legislation has ushered in an unprecedented period of change in the electricity sector.

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"We are still continuing to learn at this point," Mr. Hubert said. "I think we are still in a volatile period."

Aside from being overwhelmed with applications, Hydro One contends it has been grappling with capacity constraints in its transmission network. Upgrades are needed in some places.

"We have an obligation to make sure our system is operating safely and reliably," said Myles D'Arcey, senior vice-president of customer operations with Hydro One.

Several solar-parts manufacturers say the utility's connection rules are too stringent compared to international peak-load guidelines. As result, some solar projects have been needlessly rejected, critics contend.

At Judy and Wayne McLellan's farm near Parkhill, northwest of London, sits another stranded solar project.

The couple had secured a conditional offer from the Ontario Power Authority when they took out a loan from a credit union to install a ground-mounted solar panel at their farm. In February, two months after their project was built, they received a letter from Hydro One telling them their panel couldn't be connected because of capacity constraints. Thousands of others received similar letters that month.

"They don't care about us little guys," Mr. McLellan asserted during a break in Thursday's hearing.

The retired farmers had expected to earn a 12-per-cent return on their investment, receiving 20 years of payments for the green power their solar panel fed into the grid. Instead, they're shelling out $1,400 a month to repay their loan without knowing whether their panel will ever be connected.

"This was supposed to be our retirement money," Ms. McLellan lamented. "Instead, we have a $100,000 lawn ornament in the pasture field."

The Ontario Energy Board hearing is scheduled to wrap up on Friday. A decision on Hydro One's request is expected at a later date.

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