FIT and MicroFIT 2.0 Update

Published: 07/17/2012

By Jason Bullen, Stuart English, Colin Ground, Robert Lysy

On July 11, 2012, the Minister of Energy issued a directive to the Ontario Power Authority to finalize the rules and contracts for the FIT and microFIT 2.0 programs. The microFIT rules and contracts have subsequently been issued, and the new FIT rules and contract are expected to be finalized and posted shortly. Below is a summary of some of the changes and highlights announced.

microFIT

The microFIT program rules and contract were posted to the OPA website on July 12, 2012. The biggest change from the draft rules previously circulated involves a changing of the microFIT timelines. Applicants must now seek an offer to connect from their local distribution company within 30 days of the OPA confirming that their application is complete. The applicant then will have 90 days to receive an offer to connect.

MicroFIT applications are now being accepted with the intent of awarding 50 megawatts of new contracts as quickly as possible. Existing microFIT applicants must resubmit applications by August 10, 2012, and if they do so, they will get considered before any new applicants.

FIT

The Minister’s directive is for the OPA to award 200 megawatts of small FIT projects as quickly as possible. The window for submitting small FIT applications is expected to open in the coming weeks, when the FIT 2.0 rules and contract are published. Applications will be prioritized under a modified points system, which includes priority being given to projects held by a co-operative in which at least 50 members are local property owners and to projects with more than 50% aboriginal equity participation. Previously-submitted applications will now been given “priority” points, with one point being awarded to applications submitted prior to July 4, 2011 and 0.5 points for applications submitted after that date. These points will be issued in addition to points given for project readiness.

While FIT 2.0 will prohibit ground-mounted solar projects on lands with class I, II and III soils, there will be certain exceptions for lands that are contaminated or not used for agricultural production, including airports, landfills and military facilities. In addition, a FIT contract will not be awarded to any non-hydro project located 50 km or more from its proposed connection point.

Termination clauses in the new contract will remain as they were in the FIT 1.0 contract.

In addition, a new pilot program will be launched for small FIT projects proposed for the rooftops of proposed new buildings. The OPA will be reserving up to 15 MW of the total small FIT contract capacity for 2013 for this pilot program.

The Cassels Brock Renewable Energy and Clean Tech Group brings together a multi-disciplinary team of top-ranked lawyers with a wealth of expertise in electricity, infrastructure and project/equipment finance, environmental assessment and approval, government relations, land development and real estate, public-private partnerships and private equity. Our team is skilled at helping clients respond to the risks and opportunities presented by government regulations and programs, such as FIT and microFIT, aimed at reducing greenhouse gas emissions, or “carbon footprints,” through, for example, the development of alternative renewable energy resources.