Despite considerable regulatory and political uncertainty regarding Ontario’s renewable energy plans, a new report from ClearSky Advisors says that the province will see 2500 MW of solar PV systems deployed in the province by 2015.
Speaking with Canadian Green Tech this week, Jon Worron, co-founder of ClearSky, explains that because of the way the Ontario Power Authority has awarded contracts and the shorter building season in the province, there will be an uptick in deployment in 2012 with declines in the following years.
“The way we see it is that with what’s going on in terms of getting the necessary approvals and permits to build, we see that there is going to be a spike in 2012 and a slight decline in 2013 and then a more significant decline for 2014 and 2015,” he says. The main basis for that is that a large volume of contracts have already been awarded, he adds.
While the long-term prognosis for solar in Ontario appears to be healthy, there will be some short-term pain. The renewable energy advisory firm downgrades 2011 deployments by about 30%. Last September ClearSky has predicted that there would be upwards of 650 MW of solar built in Ontario in 2011, but now the company says that figure will be about 455 MW.
Worron attributes the downgrade to slower application processing times by the OPA and the short building season. When the Feed-in-Tariff program was launched, renewable energy approvals were supposed to take between six to 12 months, but based on feedback from developers, the reality is it takes closer to 18 months.
“So it’s those delays that are pushing things back,” he tells Canadian Green Tech. “When people get their renewable energy approvals in September, October, even as late as November, they can’t the build the project so it’s not going to happen this year.”
Perceived regulatory uncertainty surrounding Ontario’s FiT program is also having an impact on solar deployments, according to Worron.
“The way this materializes obviously is people perceive Ontario to be a high-risk marketplace because of the many changes to the FiT program and it makes it difficult for them to determine whether they should be here or not and if they do decide [to establish operations] how aggressive should they be in terms of their investment plan, how many people they should hire and so forth,” he explains. “Since the program launched, there has been 13 changes that have happened to the FiT program. In 18 months, that’s a lot. It would be hard to argue that it’s a program that has been stable if you compare it to something like the German program.”
A cornerstone of the Ontario FiT program is the domestic content requirement provisions, but they could in fact be having a detrimental impact on the solar industry in the province. While many solar inverter and module manufacturers have announced plans to establish operations in the province, only a handful has actually made the investments. The ClearSky report predicts that there will be 30 inverter and module manufacturers in the province by 2015.
Worron acknowledges that there are still some unresolved issues that may affect this projection. He points to the provincial election set for October 6 and the World Trade Organization challenge from Japan as perhaps the two most significant. The other, of course, is the two scheduled two-year review of the FiT program.
“That review is hopefully significant enough so that they can leave the program alone for a little while,” he says, adding that he’s hopeful the review will be published before the election so “the Liberals, if this is still a political issue at the time, can diffuse it before election time comes. So once that’s out of the way, I think it will be a lot more easier for people that are maybe sitting on the fence right now to decide whether they will establish operations in the province or not.”
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