Ontario's incentives attract solar power projects

November 2, 2007

In Ontario, enthusiasm for  solar PV projects has recently been growing. While solar panels in individual residences and commercial establishments have been in place for many years, Ontario is now moving in the direction of large-scale commercial applications. This trend is assisted by Ontario's Standard Offer Program, run by the Ontario Power Authority, which encourages solar PV projects of up to 10 MW.  Solar PV is being encouraged because it is abundant and renewable, environmentally friendly; it emits no carbon dioxide and potentially displaces other energy sources that do, thereby reducing global greenhouse gases.

Once a concern, the efficiency of solar PV systems has increased with advances in the field to 20% or more. They are an excellent source for distributed energy as they can be rural, remote and portable.

The Standard Offer Program is paying a price of 42 cents per/kWh. This high price, compared with other forms of generation, reflects the fact that although the capital cost is high per/kWh installed, the environmental consequences provide significant benefits. Large solar PV systems can be constructed within months on sites, on the ground or on buildings that are south-facing and with an incline of approximately 45 degrees.

A number of world solar PV developers have now entered into the Ontario market and a series of solar PV projects totalling approximately 100 MW have been announced. These announcements may have been encouraged by federal tax law. Accelerated capital cost allowance is potentially available for solar cells and related equipment, excluding electrical distribution equipment. . Certain expenses to support solar PV projects may also be eligible for Canadian Renewable Conservation Expense (CRCE). This would allow for a flow-through of this expense to the shareholders of a solar PV company.

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