Ontario Solar Explained

According to the Canadian Solar Industries Association (CanSIA), the Canadian Province of Ontario had only 2 Megawatts (MW) of installed solar electric capacity in 2008. In 2010 alone, approximately 100 MW of solar capacity has already been installed in Ontario. Furthermore, CanSIA expects the province to install nearly another 100 MW of capacity in the remainder of this year. The Ontario solar market is booming, and it is because a relatively nuanced Feed-in-Tariff (FIT) program launched in 2009.

A FIT is a production-based incentive, in which a solar energy owner is guaranteed a fixed, above-market price for the sale of their solar electricity over an extended period of time. As an example, in a FIT program, a system owner may be guaranteed a sale price of their gross solar electrical output for $0.20 per kWH for a period of 20 years; meanwhile the weighted average price of electricity could be closer to $0.08 in the system owner’s geographic region. This program allows system owners to secure a stable and significant source of revenue and an appealing return on their solar investment.

After an extended rule making process, Ontario launched its FIT program at the end of 2009. This FIT program is delineated into six different tranches, in which different Feed in Tariff values are determined by the size and type of the solar generator. Below is a schedule of the FIT value for each tranche, and an estimated cumulative value of the incentive in the column to the right (this column estimates the total value garnered for each KW of capacity installed). As the column furthest to the right indicates, investing in solar is not a risky decision in Ontario currently, but a quite profitable one.