On August 13, 2010, following the completion of its 30-day consultation period with respect to the proposed change to the pricing for ground-mounted solar PV projects up to 10 kilowatts in size, the Ontario Power Authority announced amended and finalized new pricing and introduced other new changes to the microFIT Program, which among other changes prevents "commercial aggregators" from participating in the microFIT Program.
On July 2, 2010, the Ontario Power Authority (OPA) introduced a proposed change to the pricing for ground-mounted solar PV projects up to 10 kilowatts in size (refer to Osler Update on July 5, 2010). At that time the OPA announced that all ground-mounted solar PV projects, less than or equal to 10 kilowatts and without an executed microFIT Contract or a signed Conditional Offer for a microFIT Contract, would only be eligible for a new lower price of 58.8 cents/kWh, rather than the price of 80.2 cents/kWh that was initially set as the price for all micro-scale solar PV projects at the launch of the FIT and microFIT programs. Following its 30-day consultation period with respect to these and other changes under the FIT and microFIT Programs, the OPA announced on August 13, 2010 that it has finalized the price for the new microFIT ground-mounted solar PV price category at 64.2 cents/kWh, and that this new price will apply to all applications for such projects received after July 2, 2010. Applications for projects received before July 2, 2010 will continue to be eligible for 80.2 cents/kWh regardless of whether a microFIT Contract or Conditional Offer has yet been executed.
In addition, the OPA introduced a dramatic new change to the microFIT Program by stating that, effective August 13, 2010, "commercial aggregators" (described in its press release as "businesses that lease land or rooftops from individuals for multiple renewable energy projects") will no longer be allowed to participate in the microFIT Program. Although the precise definition of "commercial aggregators" remains to be defined by the OPA for purposes of the program rules, a significant number of commercial players in the micro-scale solar PV sector (both rooftop and ground-mounted) will be impacted by this change.
In order to address the unique needs of commercial micro-scale projects, the OPA has advised it will establish a microFIT Program advisory panel to provide recommendations "on an expedited basis" regarding appropriate contracting provisions and processes for this market segment. Although the inability of commercial developers to apply under the microFIT Program at this time may create a development challenge for many, this new approach presents an opportunity to create a contracting and application framework that will improve the ability of such projects to obtain financing.
Jacob Sadikman is an associate and his practise focuses on the energy sector and on regulatory matters relating to trading and marketplace activities. for securities, commodities and derivatives. David Hanick is a partner and practises primarily in public and private mergers and acquisitions and corporate finance. Rocco Sebastiano is a partner and his practice focuses on engineering, procurement and construction law and infrastructure matters
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