Ontario Fit Program Overview

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An introduction to Ontario's program to promote renewable energy production. The Feed-in-Tariff (FIT) program makes alternative energy sources such as Solar & Wind a compelling investment. The presentation contains ROI calculations, sample setups and more. Presentation by Clearly Solar Ottawa and PACE Ottawa.

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Ontario Fit Program Overview

  1. 1. Feed-In-Tariff (FIT) Program What is it and how can it work for you ?
  2. 2. Context <ul><li>Ontario electricity infrastructure was suffering from lack of investment </li></ul>
  3. 3. Solution <ul><li>Restructure the sector </li></ul><ul><ul><li>Hydro Ontario broken up into pieces </li></ul></ul><ul><li>Create a Plan </li></ul><ul><ul><li>Integrated Power Systems Plan </li></ul></ul><ul><li>Throw money at the problem </li></ul><ul><ul><li>Issue long-term contracts to private sector to build specific types of electricity generation </li></ul></ul><ul><ul><li>Dedicated programs (one-offs, RESOP, CHO, etc.) </li></ul></ul><ul><ul><li>20 – 40 year Power Purchase Agreements </li></ul></ul><ul><ul><li>Nuclear, natural gas, wind and hydro </li></ul></ul>
  4. 4. Progress <ul><li>OPA is managing 47 large-scale contracts with a combined capacity of 10,594 MW </li></ul><ul><ul><li>About 50% in service, 25% under construction, and 25% in various stages of planning and permitting </li></ul></ul><ul><ul><li>$14.1 billion investment (‘05 – ’13) </li></ul></ul>
  5. 5. Green Economy <ul><li>Large scale generation is being addressed but what about: </li></ul><ul><ul><li>Green economy? </li></ul></ul><ul><ul><li>Renewable energy? </li></ul></ul><ul><ul><li>Community involvement? </li></ul></ul><ul><li>Minister Smitherman </li></ul><ul><li>Green Energy Act (GEA) </li></ul><ul><ul><li>Feed In Tariff Program (FIT) </li></ul></ul>
  6. 6. Green Energy Act <ul><li>Recent legislation creates a new electricity paradigm for renewable energy: </li></ul><ul><li>Standardization </li></ul><ul><li>Fixed price contracts for power production </li></ul><ul><li>Ownership opportunities for private sector, municipalities, utilities, aboriginal and community groups </li></ul><ul><li>Streamlined permitting and approvals process </li></ul><ul><li>Priority connection </li></ul><ul><li>“ Right to Connect” </li></ul>
  7. 7. Key FIT Program Features <ul><li>Open to various renewable energy supply technologies </li></ul><ul><li>Bio-energy technologies </li></ul><ul><li>Solar PV </li></ul><ul><li>Waterpower </li></ul><ul><li>Wind </li></ul><ul><li>Different prices for different technologies and project sizes </li></ul><ul><li>Prices cover development costs and provide a reasonable rate of return </li></ul><ul><li>Long-term contracts </li></ul><ul><li>Opportunities for promoting Community and Aboriginal projects </li></ul><ul><li>Provisions for Domestic Content </li></ul>
  8. 8. FIT vs. microFIT <ul><li>The FIT Program is divided into two streams – FIT and microFIT </li></ul><ul><li>The microFIT program is highly simplified and the contract issuance process is different from the FIT program. </li></ul>FIT Program stream microFIT Program Stream Small, medium and large renewable energy projects Generating over 10 kW of electricity. Very small renewable projects such as home or a small business installations Generating 10 kW or less.
  9. 9. FIT Price Schedule
  10. 10. Typical Project Costs <ul><li>100 kW Solar PV: </li></ul><ul><li>FIT Price =71.3 cents / kWh </li></ul><ul><li>Project Costs: $816,000 installed (8160 / kW) </li></ul><ul><li>Estimated Investment: $245,000 (FIT assumes 70/30 Debt/Equity ratio) </li></ul><ul><li>AnnualRevenues:$81,000 </li></ul><ul><li>AfterTaxROE:11% </li></ul><ul><li>10MW Wind: </li></ul><ul><li>FIT Price=13.5cents/kWh </li></ul><ul><li>Project Costs: $29,000,000 installed (2900/ kW) </li></ul><ul><li>Estimated Investment: $870,000 (FIT assumes 70/30 Debt/Equity ratio) </li></ul><ul><li>AnnualRevenues:$3,800,000 </li></ul><ul><li>AfterTaxROE:11% </li></ul>
  11. 11. Case Study County of Renfrew HQ
  12. 12. CAD – Renfrew HQ
  13. 13. Solar Pathfinder
  14. 14. Solar Pathfinder Trace Locations
  15. 15. Trace 1
  16. 16. Trace 2
  17. 17. Trace 3
  18. 18. Trace 4
  19. 19. Summary Report
  20. 20. Mock-up – Renfrew HQ
  21. 21. Financial Analysis <ul><li>43.4 Kw array </li></ul><ul><li>Total est. cost installed - $365,720 </li></ul><ul><li>Cost per watt - $8.42 </li></ul><ul><li>Est. annual revenue - $37,129.42 </li></ul><ul><li>10.2% annual rate of return </li></ul><ul><li>R.O.I – 9.84 years </li></ul><ul><li>Total Revenue over 20 year contract (without interest) $742,588.40 </li></ul>
  22. 22. Presentation Summary <ul><li>Huge Opportunities but “The Devil is in the Details” </li></ul><ul><ul><li>Application / Contracting process </li></ul></ul><ul><ul><li>Ontario Content Provisions </li></ul></ul><ul><ul><li>Zoning Restrictions (eg. Agricultural lands) </li></ul></ul><ul><ul><li>Moving Target? </li></ul></ul>
  23. 23. Contact Information <ul><li>OPA: fit.powerauthority.on.ca/ </li></ul><ul><li>Hydro One: www.hydroone.com/Generators </li></ul><ul><li>Jim Cummings: 613-820-2701, www.clearlysolar.ca </li></ul><ul><li>John Gorman: 613-860-1685, ext. 201 </li></ul>

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