Six strategic areas of recommendations emerged from the consultation process:
- Continue commitment to clean energy.
- Streamline processes and create jobs.
- Encourage greater community and Aboriginal participation.
- Improve municipal engagement.
- Reduce price to reflect lower costs.
- Expand Ontario’s clean energy economy.
1. Continue commitment to clean energy
The FIT Program continues to be one of the best ways to attract investment, encourage participation and efficiently build clean energy projects. It is providing substantial economic, environmental and health benefits for Ontarians.
The program creates jobs in the clean energy sector while creating cleaner air for Ontarians. It also gives individuals and groups an opportunity to participate, along with larger industry players, in the production of renewable energy.
Currently, Ontario is committed to bringing online 10,700 MW of non-hydro renewable energy generation by 2018 as well as 9,000 MW of hydro by 2030–this is expected to produce enough electricity each year to meet almost half of Ontario’s demand.
- 1.1 Ontario should procure 10,700 MW of non-hydro renewable energy generation by 2015.
- 1.2 At the end of 2013, the government should review Ontario’s electricity supply and demand forecast to explore whether a higher renewables capacity target is warranted.
- 1.3 Up to 50 MW of the remaining FIT contract capacity should be reserved for hydroelectric projects.
- 1.4 Beginning this year, conduct an annual review of FIT prices to reflect current costs—setting and publishing prices each November that will take effect on January 1st the following year.
2. Streamline processes and create jobs
Over the last two years, Ontario has led North America in clean energy procurement. There are currently about 2,900 MW of FIT projects moving through the REA process.
As renewable energy project developers shift from planning to development, the government should focus on improving the regulatory approvals process while maintaining the highest standards of environmental protection. Ontarians want to see these projects produce jobs and investments in local communities.
The following recommendations are designed to help encourage job creation by making sure approvals align with the size and characteristics of a project, simplifying the process and increasing accountability. The regulatory process would continue to protect human health and the environment.
- 2.1 In conjunction with the Ministry of the Environment (MOE), the Ministry of Natural Resources (MNR) and the Ministry of Tourism, Culture and Sport (MTCS), the regulatory approval processes should be streamlined and unnecessary delays or duplication eliminated. This would include changes to the REA regulation to help improve service and ensure that the scale of the environmental approval processes correspond to the size and impacts of projects. Three approval streams are recommended:
- Exemption: microFIT solar projects should remain exempt from REA regulations, but subject to enhanced land-use protection (see recommendation 4.3b).
- Self-Screening: MOE’s self-screening registry system, the Environmental Activity and Sector Registry (EASR), should be expanded to include eligible small-scale solar (less than 500 kW) and bio-energy projects. This change has the potential to reduce timeframes from 18-24 months to approximately 2-3 months for eligible projects.
- Full Environmental Approvals including REA regulations: Large, complex projects should continue to require the full environmental approval process, including REA regulations. Regulatory ministries should reduce duplication, improve service standards and streamline the process. These changes could shorten the environmental approval process by up to 4-5 months. For example:
- Final comment letters that MTCS and MNR provide to proponents should be a required part of a complete submission (application), rather than being required before the final public meeting.
- The timelines for MNR’s review of Endangered Species Act (ESA) permit applications should be reduced.
- MTCS should create a streamlined process to review archaeological reports.
- 2.2 MNR should review and update its policy approach to renewable energy development on Crown land as soon as possible. The release of Crown land should be aligned with provincial energy plans and programs when deciding where to make Crown land available for renewable energy.
- 2.3 The commercial operation milestone for rooftop solar PV should be shortened from three years to 18 months in order to encourage timely project completion.
- 2.4 Create a new Renewable Energy Committee that includes senior officials from relevant ministries to help drive the progress of projects through the approvals process.
3. Encourage greater community and Aboriginal participation
Active participation of communities is important to the continued success of the FIT Program. Initial FIT rules used the "first come, first served" approach. However, most local community and Aboriginal projects require more time to mobilize.
Applications that have either local or Aboriginal community support or ownership should be given priority to improve the likelihood such projects will receive contracts. Renewable energy projects with local or Aboriginal community partnerships create economic opportunities and jobs for the community. Anticipated results include positive financial returns for the community, as well as additional local benefits, such as new manufacturing facilities and direct and indirect jobs that support projects.
- 3.1 Introduce a system to prioritize FIT applications for small (CAE) and large (CAR) projects that awards points to projects with minimum equity participation from Aboriginal and local communities, public schools, colleges, universities, hospitals and long-term care facilities (see appendix 3).
- 3.2 Maintain adders for community and Aboriginal projects with adjusted prices. The adders should align with new participation and equity requirements for the FIT Program (see appendix 5).
- 3.3 Set aside a minimum of 10 per cent of remaining FIT contract capacity for local community and Aboriginal projects with greater than 50 per cent equity participation.
- 3.4 To maintain continued participation, strengthen limitations on assignment and change of control for priority participation projects, except rooftop solar.
- 3.5 Reaffirm commitment to FIT support programs and adjust as follows:
- Community Energy Partnerships Program (CEPP):
- Considering new program rules and objectives, the Ministry of Energy should ask the CEPP fund manager and program administrator (Community Power Fund) to make recommendations on how CEPP could be improved to help community groups actively participate in renewable energy projects. CEPP should be re-launched by July 1, 2012.
- Aboriginal Energy Partnerships Program:
- Extend support funding to Aboriginal communities partnering with GEIA projects.
- Align with new participation requirements in the FIT Program.
- Dedicate support funding for projects that are already in the design/development and regulatory approvals phases.
- Community Energy Partnerships Program (CEPP):
4. Improve municipal engagement
Many municipalities have embraced the FIT Program by both participating in and supporting local projects. Almost 20 municipalities are currently building FIT projects, including Belleville, Kingston, Kitchener, Markham, Waterloo and Welland. There is room for municipalities to play a greater role in the development of projects. Applicants that work closely with municipalities and have support should receive points during the application process, helping those projects move forward.
- 4.1 The OPA should introduce a point system for small and large FIT applications that awards points to projects that have demonstrated support from local municipalities or Aboriginal communities.
- 4.2 Enhance municipal engagement in the FIT Program:
- For large FIT projects, require contract launch meetings with municipalities, proponents, project developers, government representatives, utilities and agencies to facilitate early discussion, share information and define expectations.
- MOE should also revise the Municipal Consultation Form in the REA process to better reflect areas of municipal concern, in consultation with AMO.
- 4.3 Clarify and strengthen project siting rules to ensure responsible project development.
- Enhance protection of agricultural lands by prohibiting solar ground-mount projects (over 10 kW) on prime agricultural land that contain class 1, 2 and 3 soils. Expand protection to include organic and mixed soils and remove zoning exemptions.
- Prohibit solar ground-mount projects (of any size) in residential areas and lands bordering residential areas. Permit projects in commercial or industrial areas only when producing renewable energy is a secondary use.
- 4.4 Support municipalities in the development of new resources and protocols to support the integration of renewable energy projects in communities, including:
- Allocate annually $100,000 of CEPP funding to the development of a community guidance and outreach project with AMO.
- The Renewable Energy Facilitation Office (REFO) should update the Municipal Guide to Renewable Energy Projects, in collaboration with AMO, and launch additional outreach initiatives as appropriate.
- Ensure that REFO, developers and renewable energy industry associations work with AMO to develop best-practice guidance materials and help build projects in a sustainable, meaningful and responsible way.
- 4.5 In light of recommendations and initiatives to enhance municipal input and support municipal participation, the OPA should not launch the Municipal Renewable Energy Program.
5. Reduce prices to reflect lower costs
When Ontario launched the FIT Program, pricing was designed to reflect capital costs, attract investment capital and kick-start the development of a domestic renewable energy industry. A number of considerations were incorporated including: value for ratepayers, reasonable rates of return on investment, unique aspects of the Ontario market and prevailing international FIT rates.
Ontario has successfully created a domestic renewable energy sector of sufficient size to drive economies of scale and lower prices. In addition to domestic developments, the evolution of the global market has contributed to substantial capital and operating cost reductions. For example, the costs of the raw materials for solar panel technology have dropped, making many projects cheaper to complete.
- 5.1 FIT program prices for wind and solar technologies should be reduced by more than 20 per cent for solar, depending on size, and approximately15 per cent for wind (see appendix 4). Maintain current prices for water, biogas, biomass and landfill gas.
- 5.2 Rather than setting a price at the time of project application for small and large FIT projects, price should be set when the contract is offered.
6. EXPAND Ontario’s clean energy economy
Ontario has one of the most advanced, efficient and sustainable energy systems in North America. In addition, the province’s clean energy sector expertise is high and growing.
The prospect for new development in this field is significant. A wide range of clean energy opportunities could generate significant economic gains for the province, including:
- Renewable energy generation components and services (e.g. solar modules, inverters);
- Smart grid technologies (e.g. grid automation, data management, smart meters);
- Energy storage technologies;
- Electric vehicle integration with the energy grid; and
- Other emerging technologies (e.g. concentrated solar PV).
Manufacturers and service providers in the province should be given support and opportunities to showcase their clean energy products and expertise on the world stage. This initiative would encourage additional clean energy companies to invest in Ontario.
Future international expansion by the most innovative and competitive companies in Ontario will be key to long-term industry growth. When cutting-edge technologies and expertise are developed in the province, everybody wins.
- 6.1 The Ministry of Economic Development and Innovation and the Ministry of Energy should develop a Clean Energy Economic Development Strategy that recognizes Ontario’s strengths and leverages its experience to become a global leader in key areas of the energy sector. This strategy should consider the following actions:
- Provide targeted financial support through the Smart Grid Fund to Ontario-based demonstration and capacity-building projects that test, develop and bring to market the next generation of technology solutions.
- Work with key stakeholders to consider the potential for a clean energy institute to spur domestic innovation and achieve greater global market presence for Ontario-based companies.
- Support domestic manufacturers by showcasing Ontario’s smart energy solutions through a strategic export strategy.
- Create a Clean Energy Task Force to advise the Ministers of Energy and Economic Development and Innovation on potential strategies for Ontario’s clean energy sector.
- 6.2 The government should explore potential partnership opportunities for renewable energy projects in off-grid remote Aboriginal communities.
- 6.3 Establish a working group to explore opportunities for self-consumption or net-metering programs in Ontario that build on the FIT design.