August 10, 2012 – Ontario Power Authority releases Feed-in Tariff 2.0 Program Rules

After an agonizingly long wait, would-be renewable energy proponents were cheered by Friday’s announcement that  the Ontario Power Authority has at last released version 2.0 of its Feed-in Tariff Program Rules.

We provide the following summary as a guide to the new program rules. This does not substitute for a full reading of Version 2.0 of the FIT Program Rules, Contract and other program documents which may be found on the Ontario Power Authority’s FIT website

Please do not hesitate to contact us if you need legal advice or assistance with any FIT related matter.

What are the major changes to the FIT Program?

Key changes to the FIT Program include:

  • Solar and wind prices have been reduced to reflect decreased equipment costs.
  • FIT applications will now be accepted during specific application windows, rather than on an ongoing basis, and the OPA, as a first step, will award 200 MW of small FIT contracts.
  • All project applicants, including those with small FIT projects, will now need to submit application security if they wish to apply or reapply under the new program Rules.
  • Applications will be prioritized with points awarded based on project type (community participation, Aboriginal participation, or public university, publicly funded school, public college, hospital or publicly owned long-term care home participation or where they are a host), municipal support, Aboriginal support, project readiness and electricity system benefit.
  • Applications with greater than 50-percent equity participation from Aboriginal or community (co-ops) participants (contract capacity set-aside projects) will be prioritized above all other applications in an application window.
  • Solar rooftop projects must reach commercial operation within 18 months of receiving a contract, compared with three years previously. The exception is for proponents who have a portfolio of more than 15 MW of projects contracted from the same application window, in which case they can choose to have 36 months to reach commercial operation.
  • Ground-mounted solar projects may not be located on residential property or on property abutting residential property. However, for property where the lawfully permitted use is agricultural, the above projects are permitted on the property or on an abutting property only if residential use is permitted on both properties as ancillary to the agricultural use.
  • A ground-mounted solar project is permitted on commercial or industrial property as long as the project is not the main, primary or only use of the property.
  • In addition to the restrictions of locating ground-mounted solar projects on Canada Land Inventory (CLI) Class 1 and 2 soils, these projects will also not be allowed on CLI Class 3 and CLI Organic soil.
  • There are now restrictions on assignments and changes in participation level for projects that receive priority points based on the participation of certain types of entities (i.e., community, Aboriginal community, public university, publicly funded school, public college, hospital or publicly owned long-term care home participation or where they are a host).
  • FIT prices will be reviewed annually, with prices published in November that will take effect January 1 of the following year.

When will the application form be available?

  • The application window for the first round of small FIT 2.0 projects is anticipated to run from October 1 to November 30, 2012. The online application tool will be available for the start of the application window.
  • As part of this window, the OPA will award 200 MW of small FIT contracts.

When will contracts be offered?

  • Contracts will be offered following the review and prioritization of applications and the assessment of available capacity.

How has the prioritization table changed between the draft and final versions?

  • Additional points are now available based on the time stamp of a pre-existing application:

◦       One point is available for projects that applied on or before July 4, 2011.

◦       One half point is available for projects that applied on or after July 5, 2011.

How will community participation be measured?

  • Points will be awarded for small FIT projects in which a co-op has a minimum 15 percent direct economic interest, provided that 35 or more of the co-op members own property in the municipality where the project is proposed to be located.
  • Points will be awarded for large FIT projects in which a co-op has a minimum 15 percent direct economic interest, provided that 50 or more of the co-op members own property in the municipality where the project is proposed to be located.
  • Irrespective of project size, community contract capacity set-aside projects must have more than 50 percent direct economic interest held by a co-op, provided that 50 or more of the co-op members own property in the municipality where the project is proposed to be located.

 
How will Aboriginal participation be measured?

  • Points will be awarded for FIT projects in which an Aboriginal community has a minimum 15 percent direct or indirect economic interest in the project. The definition of Aboriginal community has not changed.
  • Aboriginal contract capacity set-aside projects must have more than 50 percent direct economic interest in the project.

The OPA is not accepting FIT applications at this time but currently anticipates that the application window for small FIT projects (those 500 kW or smaller) will open on October 1, 2012, and close on November 30, 2012.

Further details and confirmation of the application window dates will be provided at a later date.

The timing for the large FIT project application window will be communicated once details are finalized.

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