Pickering / Ajax Real Estate Blog

Companies, potential clients temporarily powerless

Crystal Crimi – DurhamRegion.com

Dean Lindsay was pumped about the idea of producing solar energy and making money from it, but months later, he’s still not generating income.

His and about 150 other Durham rooftops are still without the solar panels people signed up for through Pure Energies, due to an ongoing and open-ended review by the Ontario Power Authority, which has left aggregators and their prospective clients powerless to move forward in making green energy.

Comment: I am another of those waiting for my solar panels. I have been on PURE Energies list since February now. Come on McGuinty, get this done!

“So here I am in limbo,” said Mr. Lindsay, an Oshawa Kingsway Loop resident who signed up for Pure Energies’ rooftop solar system profit-sharing lease.

The OPA review began in August 2010 to look at the role of aggregators in the Green Energy Act’s microFIT (feed-in-tariff) program, including that of Pure Energies, but 10 months later, it’s still not complete.

“We built our business model based on this program,” said Chris Stern, vice president and co-founder of Pure Energies.

Pure Energies began specifically to offer the profit-sharing lease program, and explained in great detail its business plan to both the OPA and the Ministry of Energy, Mr. Stern said.

“They told us unequivocally that they loved it,” he said.

Through the Pure Energies profit-sharing lease, people sign up for a 20-year contract in which the company installs, maintains and assumes any risks related to the rooftop solar panel systems. Pure Energies sells that electricity back to the grid and splits the profit with the homeowner, who also gets to keep the solar system at the end of the contract.

Under the microFIT program, people producing solar energy would receive 80 cents per kilowatt hour produced, a little less, 71.3 cents, if they did so through an aggregator, Mr. Stern said.

The system Mr. Lindsay signed up for would produce 10 kw and make him $60 a month. But the lengthy review has put all that on hold for Pure Energies and its potential clients. As a result, Pure Energies has 10 Durham households actively participating in its program right now and 150 who want to join.

If the Pure Energy houses in limbo were hooked up, they would create approximately 750 megawatt hours of clean electricity every year for 20 years, enough to power 150 houses, according to Mr. Stern.

Under the microFIT program, there are 48 contracts executed in Durham Region, totalling 321.172 kW (or 0.32 MW) of renewable energy capacity, according to the OPA’s Tim Butters. The majority of those projects are solar photo voltaic projects, anticipated to produce approximately 360 MWh of electricity over a year, he said.

For Mr. Lindsay, the long-lasting review puts doubts into his mind about the seriousness of Green Energy Act and its programs.

“Without hearing from (the Ministry), it makes me feel it was the flavour of the day,” Mr. Lindsay said. “They’re not serious or committed to making it work … you don’t just stop the program.”

According to the OPA, the review is to ensure the microFIT program is focused on its original purpose.

“Encouraging homeowners, farmers, farm co-operative, aboriginal communities, small businesses and institutions such as schools, to own and develop small renewable projects,” said Mary Bernard, OPA corporate communications, through an e-mail response to questions regarding the removal of aggregators from the microFIT program.

A micro-FIT advisory panel was also created to make recommendations about contract provisions for aggregators and their commercial micro projects.

When asked why no deadline was in place for the review, her response was: “The review of the CFIT program is still underway and we will announce the next step when we have completed our detailed review.”

A subsequent request for answers received the response: “The program is under review, I don’t have any more information to offer.”

People think they’re following the rules and each time they do, the rules change or a review happens, “through the OPA of course,” said John Yakabuski, Ontario Conservative energy critic, adding the Ministry works through the OPA to deflect criticism.

“It looks like they’re just stalling,” Mr. Yakabuski said.

The high rate of return offered through the FIT programs created a gold rush and now there are too many applications coming in, Mr. Yakabuski said.

“As the number of applications grew, they started to look at, oh boy, what are we going to do,” he continued.

If the government was going to buy eggs for $7 a dozen, people would go buy laying hens, he added.

“It’s called poor government,” Mr. Yakabuski said. “Trying to create the image of being the green government without doing your homework.”

Even some people in Durham who have bought their own systems with their own money can’t get connected to the grid, said John O’Toole, MPP Durham.

The review is an example of how poorly thought out the Green Energy Act and its FIT and micro-FIT programs are, he said,

Under a Conservative government, the FIT program would be cancelled, Mr. Yakabuski said.

Andrew Block, senior communications advisor and press secretary for Minister of Energy Brad Duguid, said a review was always built into the program.

“I want to clarify, there is a general review of the feed-in tariff program that was built into the program when we first designed it,” Mr. Block said.

“In terms of the Conservative position, they don’t even support the FIT program to begin with,” Mr. Block said. “There would be no opportunities for those people under a Conservative government.”

In the case of the microFIT review, the initial target for completion was mid-March, Mr. Block said.

“In this case there was still work that needed to be done,” he said.

There is no new projected date for completion.

When asked what they would say to companies such as Pure Energies who have been in limbo because of the review, he said they do appreciate their objectives.

“And our objective here as well is to make sure we’re striking the right balance between good value for ratepayers and protecting ratepayers, but also ensuring the sustainability of the program,” he said.

“We do want as many people as possible to participate but we don’t want to rush out a program like that before we’ve made sure we’ve done our due diligence on it,” he continued. “We’re not saying no, we’re trying to make sure we’re getting the balance we’re looking for.”

The initial objective of the program was to pay a high price for the energy in recognition of the investment being made — an investment which would be reduced for an aggregator because of purchasing power and such, he said, and added the government wants to ensure a consistent rate of return.

For Mr. Stern, the delay has him losing hope.

“It just seems like it’s not going to happen — very depressing,” he said, and added he doesn’t know how long Pure Energies can hang in there.

By keeping his company out, it’s just going to keep prices for solar equipment high and keep people subsidizing carbon, he said.

“People are just going to be I don’t want this, I can’t afford this… it’s going to hurt the solar industry,” Mr. Stern said.

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