Ontario buys Solar Electricity from Homeowners
Homeowners who purchase and install home solar power systems in the province of Ontario will now earn some extra income to help pay for their systems, thanks to the Ontario Power Authority. Ontario is learning by example from the success of similar European programs. This new program is encouraging a flurry of solar industry construction activity aimed at taking advantage of the new electricity buy-back program. Paul Gipe, a wind power expert, from California calls the result revolutionary: “the most progressive renewable energy program in 20 years in North America.”
Leonard Allen, who runs a small solar panel company here, finally has something good to tell callers, he says. For the first time, he can promise it won’t take 50 years to recoup the money they spend on a rooftop solar system.
Canada’s Ontario province has ordered local utility companies to pay homeowners or businesses for any electricity they generate from small solar, wind, water or other renewable energy projects, beginning next month.
The plan is unique in North America, but it is modeled after similar schemes in Europe that have spawned a boom in small “clean energy” projects. Critics say paying for such electricity is not the cheapest source for utilities, but advocates say it is the cleanest and most environment-friendly.
In Ontario, the program has brought a rush of activity. Homeowners in Toronto are climbing onto roofs to add solar panels.
A cooperative of small investors is raising money to build five large wind turbines to harness Lake Huron winds. Others are eyeing the locks of a St. Lawrence Seaway canal for small hydro-turbines.
Farmers are looking at manure piles and figuring the profits of using organic decomposition to create methane gas that can make electricity.
“There’s a tremendous interest, at all levels, from well-organized business consortiums to small homeowners,” said Tim Taylor, a spokesman for the Ontario Power Authority. “The impact in megawatts is going to come from the larger projects, but there’s a tremendous momentum found in small, backyard projects.”
“We love the idea,” said Keith Stewart, an energy specialist at World Wildlife Fund Canada. “The small stuff adds up. This model should be taken right across North America.”
A grass-roots effort
The growing chorus of cheerleaders for the program say it is an example of the kind of individual, grass-roots effort that many see as the solution to intractable problems ranging from energy shortages to global warming.
The Ontario program was launched after politicians promised to shut down aging coal-fired power plants but faced the reality of growing electricity demands.
Advocates of renewable energy, some of them veterans of a successful campaign to erect a large windmill in downtown Toronto, stepped in. They urged provincial authorities to use an economic spur to create hundreds of small electricity generators in hopes of avoiding building more big, expensive coal, gas or nuclear plants.
They brought Paul Gipe, a wind power expert, from California to lead the successful campaign. Gipe calls the result revolutionary: “the most progressive renewable energy program in 20 years in North America.”
Gipe noted that while some local utilities in the U.S. allow customers to send power back into the grid, there are no programs that pay a premium for generating the electricity.
Pay for producing
Starting in November, the 90 or so local utilities throughout Ontario will begin paying anyone producing solar power for 42 cents a kilowatt hour. Wind, hydro or bio-electric production will bring 11 to 14.5 cents a kilowatt hour.
In addition to getting paid for making electricity, home-owners and businesses slash their own electricity draw from the grid, where power sells at an average of about 5.8 cents a kilowatt hour across the province. Advocates say it reduces the burden on the electric transmission lines, encourages conservation and may save the cost of a new plant.
“Putting solar panels on the roof is a very tangible symbol of where your power is coming from,” said Ron McKay, an artist and graphic designer who helped form a co-op in his east Toronto neighborhood to buy solar panels at a bulk price. “You start to conserve. You don’t leave all the lights on. You change your light bulbs to efficient ones and start looking at your appliances.”
Ontario’s pricing scheme, called a standard offer contract, brought a flood of new interest to McKay’s solar-buying co-op, and has produced at least two similar co-ops in other Toronto neighborhoods.
‘Better than watching TV’
Members gleefully trade stories about watching their electric meters reverse on sunny days, putting electricity into the power grid rather than taking it out. “One woman said it’s better than watching TV,” McKay said.
Utility companies initially were wary of the administrative burden of buying power from thousands of customers. And there are technical problems. For example, utility linemen have to ensure that the small producers are disconnected from the grid when they work on electric lines.
Critics also say the cost to buy the power is higher than it would be from a conventional power plant, or an efficient big wind farm. Large contracts to build big projects is the North American norm.
Advocates counter that the prices set by the new Ontario program are too low. The 11 cents paid for wind power and small hydro may be profitable, they say. But the $10,000 to $15,000 needed to buy a typical residential solar array means it could take 15 years to recoup the investment at the price offered to sell solar electricity back to the utility in Ontario.
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November 15th, 2006
I checked on the cost of going solar a few years ago because here in San Diego the power company has no competition and the cost of power is insane. Plus, I have the perfect roof for solar panels and there’s lots of area that could be covered. Unfortunately the initial estimate was around $45,000. It’s great if you’ve got a giant wad of cash lying around, or if you’re building from scratch and it’s worked into the cost of construction, but most people (myself included) don’t have that kind of dough. Too bad.
November 15th, 2006
I know in Massachusetts there are grants to homeowners. They reimburse about one half the cost of solar installations. It’s worth looking into. At this rate, the government should be paying us to put up solar and wind. But, that won’t happen until Washington, DC, New York City and Los Angeles are under water.
November 15th, 2006
There are lots of rebates and grants but that doesn’t help with the initial cost of installing the whole thing. You’ve got to have the cash to do it, first. then you get the rebates. It doesn’t help at all if you don’t have the money to begin with.
November 15th, 2006
Someone was saying that the cost is coming way down, due to significant advances in the technology. (There’s a link to a Japanese company that has data on cost per kwh.)
December 9th, 2006
I am located on Lake Erie with an acre of land and an excellent location for a wind generator, I am going to be putting one up. I would be interested in what incentives are available from local, provincial and federal agencies to assist. Any information you can provide would be greatly appreciated. Thank you.
October 29th, 2008
I am in the process of installing a 100 foot by 18″ face tower and to mount a 2.4kw wind generator on top. The total cost for the set-up including labor is in excess of $25000 Cnd. I cant seem to find any information on Canadian grants from either level of government or power authority,
Is there any such program for individual who are in the process of installing and converting to free energy ?
Thanking you in advance.
February 24th, 2009
Good idea, is this equal to what we pay per kilowatt hour from the hydro company? Solar cells, are costly yes.. wait a few years they will come down in price. Does this include just Solar/Wind/bioelectric , or can we earn money by making a magneto generator on our old exercise bike and plugging it into our house? Plus the power inverter of course.
May 17th, 2009
Hello: I hope that perhaps you might inform me on Ontario government grants for solar and wind energy. We live in a small cabin far in the wilderness and although we have the turbine and inverter, it is too costly to have it set up. Any ideas on where to proceed from here? With thanks, Wayne Martel
July 5th, 2009
According to my latest information the 42 cents per kWh price quoted for the Standard Offer Contract to provide solar derived electricity is wrong. It was recently raised to 80.4 cents per kWh with the newly placed into law Ontario Green Energy Act.
This is terrific for a speculator who has the money to invest in a commercial sized solar plant but for Mr. Smith with a mortgage, finding the $30k to put up solar photovoltaics and the rest of the required electronics to do an approved grid tie is still a major obstacle. Payback times are still long.
Be careful putting up a wind turbine in rural Ontario. If ‘permitted’,(the process of paying for a local county building permit for a structure), the local government sees it as an ‘improvement’, meaning your property is now worth more and will increase what they charge you in property taxes accordingly. Your taxes may go up more than the cost of electricity you no longer have to pay the utility for. If this happens, the money you cough up for this turbine in attempt to ‘do the right thing’ might be better spent on a personal vacation. If you sell the power back to the utility you could also be taxed as a ‘commercial’ business because the generated power produces a revenue stream. This can affect both personal income tax as well as property taxes and be subject to local zoning bylaws. Your local zoning may not allow you to run a business from your home. The government really needs to change the rules so it can get out of it’s own way on these green energy plans so that we all have at least a fighting chance of saving the planet and our own lives.
January 21st, 2010
My power cost in Ontario Canada was 12.4 cents per KW (this is the actual cost with taxes etc). I am using many solar power grid tied systems plugged onto my Ontario Hydro system. My solar power systems push 320w each into my home hydro. I keep each system as a separate 320w system in case of breakdown. If one goes down….others keep working.
Each system has cost me $1200.00. Based on a 8 hour day….and if hydro doubles in cost(and it will at best double in cost)each system will give me power for 1.1 cent per kw for the next 30 years.(system lifespan). At todays rate 2.2 per kw. This is at a savings rate at my own hydro rate and not selling the power back to hydro.
Selling power back to hydro is not always the best way to get the best return on your solar investment. For me it did not make sense to sell and receive less savings once all the extra selling costs are added up.
February 6th, 2010
I will be installing a wind generator on my property in Ontario, are there any grants and incentives? Can I get info on the power panels and hydro meters required for the system.
Thank you
February 6th, 2010
Tom,
Grants and incentives? Good luck with that! The only government grants I am aware of require that you hire a home energy inspector which you pay for out of your own pocket to do an energy audit of your home before any grant money is made available for such things. If the correlation leading to that rule has you scratching your head in wonder it does me too. That IMO has been an extremely efficient way for the government to prevent most homeowners from installing green energy systems. If you find out otherwise please do let us all know. In the meantime I won’t be holding my breath.
February 7th, 2010
Greeting,
In actuality we do have grants here in Canada / Ontario
Installing a wind turbine or solar field does fall under the Home Improvement program where we can get as much as $1350 back from the federal Government . As for Ontario is concerned, We get the Provincial sales Tax back when the application is filled out. Done it and it works just fine.
However, As for grant is concerned, we have one of the poorest incentive program to move forward towards Green energy. We have to Pay Up huge amounts to obtain a credit only if we sell back on a 20 year contract to OPG.
While this contract is on, we must maintain an account with Hydro One to pay roughly $30 per month to sell Hydro Back.
Taking in consideration all licenses, Applications,Business accounts, insurance, ESA Inspections, Local Permits,Labour , Hydro Account, and the famous tax that we will have to pay on our Income Tax derived from producing electricity who is really the BIG WINNER here ?
80.2 cents / Kwh sure is an attractive number for Ontarians However considering all other associated levis involved the return on investment from a Home 10 Kilowatt Solar Field is much greater than what most people, Companies or Government is telling you.
I have a wind turbine installation done to code, customized to our need to have evaluated a return of investment to exceed 200 years. Insurance increase alone from the gouging Insurance company is more that what I produce in electricity.
In My case, I have no regret as I am doing it for the challenge, The emission reduction and a great hobby.
If the Canadian and Provincial Government really wants the average home owner to get into Renewable Energy , Do like our Smart Concerned neighbors of the South and start introducing a decent Tax Break at the beginning phase of building our Solar Fields .
A Concerned Canadian