Property Tax Treatment of Renewable Energy Installations

On January 4, 2012, Ontario Regulation 282/98 under the Assessment Act was amended to provide greater clarity and introduce new rules governing the property tax treatment of renewable energy installations. The amendments apply to facilities that generate electricity using solar energy, wind energy or anaerobic digestion of organic matter. The amendments take effect as of January 1, 2011.

SUMMARY OF TREATMENT

Rooftop Installations
The assessment and tax classification of property will not change due to the addition of a renewable energy installation on the rooftop of a building.

Ground Installations
For ground-mounted installations, the property tax treatment will depend upon the size and location of the facility as well as who is conducting the generation, as outlined below:

Generation as Ancillary Activity, Not by a Corporate Power Producer:

The following rules apply where energy generation is conducted by a person who is not ordinarily in the business of electricity generation, transmission or distribution, and where the generation  is ancillary to another activity on the same property.

• Small-size ground installations with a generation capacity up to 10 kW will not experience an increase in assessment or a change in tax classification.

• Medium-size ground installations with a generation capacity over 10 kW and up to 500 kW will be taxed based on the surrounding land use (e.g. residential, farm, multi-residential, commercial).

• Large-size ground installations with a generation capacity over 500 kW will be taxed based on the surrounding land use for the proportion of assessment up to 500 kW, and at the industrial rate for the proportion over 500 kW.

−  For example, if a 560 kW wind tower is located on multi-residential property, the assessment of the wind tower and associated land would be apportioned 89 per cent to the multi-residential tax class and 11 per cent to the industrial tax class.

Energy Efficiency Installations

Ontario Regulation 282/98 was also amended to provide clear policy regarding energy efficiency and energy conservation installations that use renewable energy technologies. As a result, the assessment of properties with an active solar heating or cooling system or a ground-sourced geothermal heating or cooling system will not be increased as a result of that improvement.

The Ontario Power Authority (OPA) recognized the falling prices and decided it was time to undergo a review of the MicroFIT and FIT programs to better represent the rates it pays for solar projects.  In addition to the falling prices, many areas in Ontario had reached generation capacity for generation coming from intermittent power (power from sources that is irregular). CanSIA is also requesting an increase from the 7% capacity rule.

Many organizations including the Canadian Solar Industry Association (CanSIA) submitted their own review of the program to the Ministry of Energy and proposed new rates for solar power systems.  The following rates were proposed by CanSIA:

MicroFIT program – 3 tranches instead of just one

0 to 5kW – 69.5 cents/kWh (rooftop)

5 to 10kW – 65 cents/kWh (rooftop)

10 to 30kW – 60 t0 63 cents/kWh (rooftop)

Ground mounted 59.4 cents/kWh

FIT

30 – 150kW – 60 to 63 cents/kWh

150kW to 1MW – 53 to 55 cents/kWh

150kW to 1MW – 44.3 cents/kWh (ground mounted)

1MW to 10MW – reduced by 20% (ground mounted)

The OPA has indicated that they will announce the results of the review within the first quarter of 2012 but have not committed to a deadline.  It is our hope that they will complete the review as early as possible so that the solar industry can get back to business.

Here is the article:

Ever since the microFIT program was introduced in Ontario I’ve noticed that every time I go to a home show there are more and more solar panel installers. Five years ago I used to joke that home shows were all about appliances and hot tubs. I suppose that now I can add solar panels and installers to the mix. If you’re not familiar with the microFIT program, I’ve written about it before. In short, the Ontario government will pay you $0.80.2/kWh generated, for up to 20 years.

With all these new solar installer businesses popping up, I had to wonder, How do you go about looking for a reputable solar panel installer? And what about the solar panels themselves? How do you know what the right one is? There are several different manufacturers of solar panels, so how do you choose?

I contacted Aaron Goldwater of Goldwater Solar and asked him a few questions about solar panels. He’s been in the solar business for many years and has installed many solar photovoltaic systems.

What are some of the qualities that separate a reputable solar panel installer from an organization that opened up shop just to take advantage of the microFIT program? Are there any certifications available?

Currently, there are is a certification that some installers may have from NABCEP (North American Board of Certified Energy Practitioners), however it is a more common certification in the U.S.  There are courses offered by CanSIA (Canadian Solar Industry Association) but no official accreditation offered through them.   One way to determine if the company has been in business for a while would be to check how long they have been a member of CanSIA.  Asking for references is always recommended and if you can get a referral from someone that goes a long way.  In order for any company to comply with all the rules, the connection has to be done by a certified electrician.  However, an electrician doesn’t always choose the equipment used.  I would recommend doing some background research into the equipment (panels/inverters/racking) before making a decision as there are a lot of companies out there offering panels that have only been in the business a short while.  Even though they offer a 25 year warranty on performance, they may not be around once the industry matures.

Have you ever heard of any bad installations where roofs have leaked afterwards (where they affix the panel hardware to the roof?)

I have not heard of leaks caused by solar installations.   Generally the manufacturers of the racking systems have a careful method for attachment to roofs that include a flashing that is more than adequate for protecting the roof.  A solar installation can actually protect the roof and extend the shingle longevity since it is usually the heat and UV exposure which causes them to degrade with time.  The panels block the UV and lower the temperature of the roof because they are taking the sun’s energy and converting it to electricity.  A recent study in California also showed that Solar PV can reduce a building’s cooling load by as much as 38%.

What are some of the main factors that make up a good quality solar panel? How much electricity should a standard-sized individual solar panel be generating?

Panels range in size up to as high as 300W each.  These days, typically installers are using panels that are between 220 – 250W.  Panels are usually rated by efficiency and the average panel is around 14 to 15% efficient. Checking the warranty of a panel is a good idea.  Most offer a workmanship warranty of 5 years (although some now offer 10 years) and a power output of 80% of their original value at year 25.

Is there any way to check and see if your house is situated for maximum solar panel electricity generation? Does Google Earth have that ability?

Google Earth is a great tool for seeing if you have an ideally orientated roof for solar PV.  A lot of installers use it as an initial assessment tool to determine if a site is suitable.  Due south is ideal, but east and west can work too with about 80% overall production of a south facing roof.  A typical panel is about 3′x5′ so you can even use google earth to determine how many panels you can fit on the roof with the measuring tool.  At Goldwater Solar we use Google earth to assess orientation, potential shading, system sizing, and then we use PVWatts (an easy to use online PV calculator) to estimate production.  We then send a proposal to the customer so they can evaluate if its worth it for them to pursue it any further.  We then submit an application to the Ontario Power Authority on their behalf to begin the process (free of charge).

How can you figure out how much wattage your roof can generate? Does it depend on the solar panel you choose? (Are some more powerful than others?)

I would go with the 3′x5′ (3’4″ x 5’4″ to be more exact) measurement per panel and assume 240W per panel.  Again, you can do this with google earth.

Is maintenance an issue? Do you need to be able to clean the solar panels every so often?

Performance of the array and whether you string panels in series or parallel will depend on the inverter (what converts the panel’s DC electricity to AC electricity).  Their ability to convert DC to AC is what will determine how the array performs.  Whether it is parallel or series doesn’t matter though from a panel standpoint since when you string them together in parallel you add the amperage and when they are in series you add the voltage.  The power output is voltage x amperage so the total output (watts) would be the same regardless.

Regarding the microFIT program: do you know if there is a long wait to get hooked up to the grid once you’ve received the approval from the ministry?

The process can take a while.  In our experience, the OPA application approval can take anywhere from 1 month to 3 months to get approval.  Once you receive approval (and actually they now request that you do this first now) you need to apply to connect to your Local Distribution Company (LDC), a fancy acronym for hydro company.  This application approval review can take anywhere from 1 week to 2 months depending which behemoth you are dealing with.  Once you have this approval the solar company can begin their installation and the Electrical Safety Authority (ESA) then comes to inspect that the system was installed according to code.  The ESA then notifies the LDC and the LDC then installs the meter base (usually 1 to 2 weeks before they get in to do it).  Then the LDC then informs the OPA that the project has been done (around 1 week).  Finally the OPA then will send you a notice telling you that they will be issuing you the final contract soon.  Then in about a week to 10 days the OPA issues you the final contract which the customer has to approve online.  So you can see with all the different parties involved, it can literally take as long as 6 months to get a project finalized!

Thanks for the tips Aaron!

Here is the link to the original article: http://becgreen.ca/2011/05/10/tankless-hot-water-systems-benefits-and-drawbacks/

Tankless Hot Water Systems – Benefits and Drawbacks

I’ve always been on the fence about tankless hot water, or “on-demand”, and whether it’s worth my while. The biggest advantage is that it can save a significant amount of money and CO2 output. In fact, Sears Canada has this really neat little calculator that shows just how much money and emissions you can save by switching to a tankless system. In my case, if I switch from my high efficiency hot water heater to a condensing tankless system I can save:

• 921 kg CO2 emissions per year, 11,056 kg over the estimated 12 year life of the unit,
• 484 m3 of natural gas or 5,811 m3 over the life of the unit,
• $229.89 yearly or $2758.62 over the life of the unit.

These numbers are worth paying attention to. But I’d also heard that there were certain drawbacks to a tankless system that worried me. I figured it was time to get to the bottom of when a tankless system is a good idea, and when it isn’t. I contacted Aaron Goldwater of Goldwater Solar Services, a company that installs both solar hotwater and solar photovoltaic units. It turns out that solar hot water and  tankless systems complement each other, with each system optimizing the other.

I sent Aaron a whole list of questions, concerns and observations and he patiently answered with thorough, thoughtful responses. If you were wondering about tankless hot water and whether it’s right for your home, read on; Aaron clears up a lot of misconceptions about it, as well as pointing out the reality of a tankless system.

Cathy: A tankless hot water system cannot service a typical family of 4 or more, especially in the mornings when many showers might be being taken and the kitchen is in full swing. Same for night time if there are young children taking baths and the washing machine and dishwasher are on.

Different tankless water heaters have different flow rates and can supply different rates of hot water.  Some can produce 5 or more gallons per minute which is sufficient to run two showers at the same time.  You have to choose the right size tankless water heater for your household.  The amount of hot water (flow rate) that a tankless water heater can supply depends on the incoming temperature of the water and the set temperature of the tankless water heater.  The higher the temperature rise the lower the flow rate.  So in the winter when the city water comes into the house colder than in the summer, tankless water heaters will produce a lower flow rate.

As the difference in temperature decreases between the set temperature and the incoming temperature of the water, the flow rate increases.  Some tankless water heaters can produce as much as 9 gallons/minute if the difference in temperature is as low as 40 degrees F.  This could happen for example if the tankless is set for 105F and the incoming water temperature is 65F.  A solar hot water system will preheat the water before it reaches the tankless thereby increasing the flow rate of the tankless.

Having said that, water pressure is usually the real limiting factor for how many household facets you can run at the same time with hot water.  Many households don’t have sufficient water pressure to run 2 showers and do the dishes at the same time and this is NOT as a result of the tankless water heater not supplying enough hot water but a result of the size of the water pipes coming into the house.

Cathy: A cold water “sandwich” can occur if water is quickly turned off and on again in one part of the house (like the toilet flushing in older homes while someone is taking a shower).
Aaron:

In my experience and talking to my customers, the cold water sandwich doesn’t seem to be an issue.  I think the cold water sandwich occurs not when someone flushes the toilet but when a small section of the pipe has cold water trapped in it.  For example, lets say you take a shower and then someone else in the house takes a shower 20 minutes later. The tankless water heater will take a few seconds to heat up again so although there’s warm water in the pipe after the tankless water heater, some cold water will pass through the tankless water heater before it gets warmed.  This would be eliminated with a solar water preheat system because the water would be warm or hot before entering the tankless.

Cathy: There is significant water wastage while the heating unit is warming up.
Aaron:

The one disadvantage of a TWH (lets use this acronym from now on) is that when the tap is turned on it takes about 10 to 20 seconds for the TWH to trigger and get hot enough so that the water passing through is at the set temperature.  Its this extra 10 to 15 seconds on top of the usual wait time that people notice and it can waste a bit of water.  Having said that, adding a solar water heater before the TWH as a preheat eliminates the added wait time most of the time because the water coming into the TWH is already warm or hot.  So the TWH doesn’t have to work as hard to heat up.

Cathy: An electric system uses too much electricity to off-set any real environmental or cost savings. A gas system (either propane or natural) is better.
Aaron:

An electric tankless water heater needs I believe a 100amp service and uses a lot of electricity to heat the water.  They also typcially have low capacity compared with gas units and can usually only run 1 shower.  Its not something we usually recommend unless there are no other options.

Cathy: Wouldn’t the optimum use of a solar hot water heater, combined with tankless, be during the middle of the day when the sun is shining? Is there any sort of storage unit for solar-heated hot water?
Aaron:

A solar water heater has a storage vessel (tank) usually next to the tankless water heater that heats up during the day and stores the heat for when its ready to be used.  Most solar tanks are insulated well and only lose about 1 degree F/hour once the sun goes down.  So if you shower in the morning, the water in the solar tank will still be hot.

Cathy: Are the “hybrid” systems a better bet for a large family? (ie., a tankless system that includes a small storage tank).
Aaron:

Not really.  A TWH with a small storage tank is usually only used to eliminate the wait time for HW.

Cathy: The pressure is often stronger than is needed for faucets in order for a larger capacity tankless system to work.
Aaron:

TWHs have a minimum flow rate to trigger the burner so if you only have the facet on partially the TWH might not trigger.

Cathy: Tankless systems are best suited for one and two person households.
Aaron:

Not true, because 20 people could live in one house and use a small tankless water heater.  As long as they shower one after the next, they will all have HW.

Cathy: I also wondered if you could pair a tankless system with a drain water heat recovery unit or a circulating pump on a timer.
Aaron:

A drain water heat recovery (DWHR) unit will increase the hot water flow rate of a tankless water heater because it increases the incoming temperature to the tankless and therefore lowers that differential I was talking about earlier.  For example, if the DWHR unit increases the city water temp by 10 degree F and the city water was coming in at 45F, that means that its now reaching the TWH at 55F instead of 45F.  Lets say the tankless is set at 110F.  Then that means instead of having to raise the temp by 65F it only has to raise it by 55F – this increase the hot water flow rate of the unit.

A recirc pump will keep the water running to the taps hot at all times so that when you turn on the tap the water is hot.
However, this is costly to install and will add more electricity consumption and gas consumption.

With a tankless water heater you can’t run out of hot water.  There is no storage of hot water. When you turn on the tap the tankless water heater is triggered and heats the water as it passes through it.  Therefore you can have the tap on 24/7 and never run out of hot water.  With a correctly sized tankless water heater you could run two showers all day a the same time.

Cathy: What’s the biggest obstacle to installing a tankless hot water system?
Aaron:

One of the biggest obstacles to having a tankless water heater installed can be installing the venting or exhaust from the unit. Because they produce a lot of heat in order to heat the water as it passes through the TWH the exhaust from the unit can be a very high temperature. Some tankless water heaters use stainless steel 5 or 6 inch venting pipes as a result of the high temperature. This type of TWH comes with a venting kit, however, any additional venting needed can be very expensive.

However, some units, called condensing tankless water heaters, recover the lost heat that would have travelled out the exhaust. This increases the efficiency of the tankless water heater to as high as 98% efficiency. These are the most efficient water heaters on the market. Also, since the exhaust is at a lower temperature these units use smaller PVC venting. PVC venting is cheaper and can be easier to run longer distances thereby making it easier to find a spot to vent the TWH.

The biggest issue with TWH for installation is that the units aren’t typically exhausted up a chimney. They are direct vent so the exhaust is typically run out the side of the house. Locating an appropriate spot for the venting can be tricky because the building code dictates how close the vent can be to different objects. For example, a vent cannot be within 3 ft of any door or window and it must be 1 ft above grade. It also has to be 2 ft from the property line. So if you have a very narrow passage between houses it may be difficult to find a spot to run the vent. A tankless installer should be able to determine if it can be installed within code.

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The OPA is proposing a rule change for microFIT applications submitted on or after December 8, 2010. They are proposing that new applicants to the Microfit program must first apply to their local utility for interconnection to the grid before applying to the microfit program.

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