Ontario Power Authority holding public consultation process about planned price drop for solar power

In its latest edition of News Online, the Ontario Power Authority (OPA) says that its plan to drop the price offered for solar power from 80.2 cents per kWh to 58.8 cents per kWh is consistent with providing an 11% return to developers over the 20 years of a Feed-in Tariff (FIT) contract.  For instance, the OPA writes:

Ground-mounted projects with tracking systems (panels that turn to follow the sun) have higher upfront capital costs but produce more energy (higher capacity factor) and therefore generate more revenue. At 58.8 cents/KWh, the higher revenue offsets the higher capital costs and results in a rate of return that is comparable to roof-top solar projects as well as other FIT projects.

Ground-mounted projects without tracking have lower capital costs but also generate less energy and therefore less revenue. In this case, the lower upfront cost offsets the lower revenue, still enabling a reasonable rate of return from the same 58.8 cent FIT rate. It is the costs of these projects in particular which have come down relative to rooftop installations since the program was introduced, enabling a reduction in the tariff rate.

A more in-depth article on returns on investment for solar projects is available from the OPA at: Details of proposed rate calculation.

The OPA is also conducting a 30-day consultation period on the new pricing scheme:

Note: There will be a 30-day comment period on the proposed new price category. Please send all comments and submissions to microFIT@powerauthority.on.ca. While all emails will be read, not all emails will receive individual responses.

Comments also can be mailed to the following address and must be postmarked no later than Tuesday, August 3, 2010.

Ontario Power Authority
120 Adelaide Street West, Suite 1600
Toronto, Ontario M5H 1T1
Attention: Ground-Mounted Solar PV