Published April 9, 2010

A renewable-energy feed-in tariff in the province of Ontario has led to a surge of solar photovoltaic, wind-energy and hydropower projects.

The Ontario Power Authority has announced an award of contract offers for power generation totaling more than 2,400 megawatts, the equivalent peak capacity of about two coal or nuclear power plants.

The province's feed-in tariff was begun last fall. In a few months, Ontario's planned or installed solar PV generating capacity has exceeded that of sunny, populous U.S. states such as Texas and Florida.

"These projects are the latest accomplishments of the Green Energy Act, which is making Ontario a place of destination for green-energy development, manufacturing and expertise," said Brad Duguid, the province's minister of energy and infrastructure. "The investments generated by FIT will not only create green jobs, but will also build a coal-free legacy for future generations."

As part of the push for renewably generated electricity, the province has made plans to close its coal-burning power plants by the end of 2014.

The subsidies known as feed-in tariffs, which are common in Europe and Asia, pay solar owners directly for the electricity they generate.  They are simpler than the incentive forms offered in most of the United States, such as net metering, rebates, tax credits and tradable renewable-energy credits, but are not always more lucrative for owners.

Ontario's program, which began accepting applications in October 2009, provides varying payments for six types of renewable energy, including electricity generated by sun, wind, water and biogas. Solar has been the most popular choice in terms of the number of applicants by far. Solar owners may be paid from 44.3 cents (Canadian) to 80.2 cents per kilowatt-hour for electricity production for 20 years.

When structured like the one in Ontario, feed-in tariffs can virtually guarantee an attractive investment return for those purchasing solar equipment.

Solar PV represents about 410 megawatts of the 2,400 mw of capacity awarded contract offers in this week's announcement by the power authority. For comparison, California entered 2009 with an estimated 521 megawatts of installed solar PV generating capacity.

The 184 renewable-energy projects announced by the authority will create about 20,000 jobs and attract about $9 billion in private investment, the authority estimates.

Among the 184 projects, 77 are for solar photovoltaic systems. Another 47 are on-shore wind-energy projects and 46 involve water power. One offshore wind project is included. There are seven biogas, four landfill gas and two biomass projects.

Although solar makes up the largest category of projects, wind-energy production accounts for the largest megawatt total of planned production by far.

Ontario also offers a "MicroFIT" feed-in tariff program for small-scale projects. As of April 6, it had received 8,424 applications for solar PV installations from homeowners and small businesses, an impressive total in comparison with most other North American jurisdictions.

The Los Angeles metropolitan area, for example, with a population similar to that of the province of Ontario, has fewer solar installations than that number. A plan to establish a feed-in tariff in the city of Los Angeles has stalled because of political disagreements.