July 22, 2009

Erin residents selling solar power to Ontario Hydro

As published in The Erin Advocate

Now that Joe and Frieda Leenders have retired from farming, they are getting into the power business. An array of 24 solar panels, installed last month on the south-facing roof of Joe's workshop, is now feeding "green" energy into the electrical grid.

They are among the first to take advantage of Ontario's new Green Energy Act, which was approved in the spring. A key part of the plan is to offer small producers such as homeowners, industries, farms and communities a guaranteed rate of payment for solar or wind power that they generate.

On a traditional electricity bill, by the time you include GST, debt retirement, regulatory charges and "delivery", you pay about 11 cents per kilowatt hour. If you generate power yourself, the Ontario Power Authority will contract to buy it from you at up to 80.2 cents per kilowatt hour for the next 20 years.

"It's the coming thing," said Frieda, referring to the need to conserve electricity and reduce reliance on fossil fuels. "This may entice other people to do it."

In the past ten years, the cost of solar equipment has dropped about 90 per cent, but even with government rebates and a guaranteed price, it is still a costly venture.

"Some people have told me I'm crazy, but I've been crazy all my life," said Joe, who has always been interested in the idea of power generation. "This is an investment in the future."

They are spending $52,000, and it will take about ten years to make back that amount in savings and revenue. Unlike "back-up" systems that are ready in the event of a power failure, their direct link to the grid does not require an expensive bank of batteries to store electricity.

"Some people use it for retirement planning," said Steve Eng, an energy engineer at Enviro-Energy Technologies Inc. of Markham, which is installing the equipment. "If you are getting a return on your investment of 10-11 percent per year, that's better than what the bank will pay you."

He said Ontario is willing to pay a good price for the power, because the small producer bears the capital cost. "The government gets more green electricity on the grid and won't have to build as much generation capacity, such as natural gas, and even nuclear plants. We are all subsidizing it," he said.

The new Ontario incentives are now the most generous in the world, according to an article on the website: renewableenergyworld.com. This could attract serious investment from energy companies looking to expand into North America. The approval process for wind farms and solar parks will be streamlined, making it difficult for municipalities to block development.

The Green Energy Act is part of a $5 billion commitment by the Ontario government to encourage the growth of renewable energy, stimulate the economy, and create an estimated 50,000 jobs over the next three years. An energy audit will also be mandatory when selling a house, unless it is waived by the buyer.

Premier Dalton McGuinty said the plan will boost electricity bills by one percent. "It's a new green tax," said Kevin Gaudet, Ontario director of the Canadian Taxpayers Federation, quoted in The Ottawa Citizen.

Despite this "green" initiative, the government continues to come under fire from groups like the Ontario Clean Air Alliance, Greenpeace and the David Suzuki Foundation, because it intends to build more nuclear reactors. That plan has recently been delayed, due to uncertainty about costs.

A major push to bring small producers to the grid is long overdue. Germany, for example, gets less sunlight but has ten times more solar generation than all of Canada. Some US states have been doing this for years. If we had started earlier, we wouldn't be so reliant now on coal-fired and nuclear power plants.