Over the past year, we have seen our costs for solar panels drop by as much as 40% in the case of some solar panels. On average solar photovoltaic panels have come down 25% this year due increased competition within the sector and manufacturers scrambling to obtain market share. This price drop caused the decline of the American government backed solar panel manufacturer Solyndra. Solyndra received a $535 million loan guarantee to build a manufacturing facility but due to falling prices for solar panels they were priced out of the market and forced to file for bankruptcy.
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
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.