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greenTbiz » Programs » Community Power » FAQs & Useful Information

FAQs & Useful Information

Materials

Have you been to one of our seminars on rooftop solar PV and community power and want to recap? Or maybe you haven’t (yet) and are curious whether rooftop solar and community power are an option for you. In any case, you can download the presentations below. 

Introduction – Powering your community

The case for why we should move away from fossil fuels and embrace renewables and what greenTbiz can do to help.

Community Power – German Bioenergy Village

A vision for Ontario. The German village Juehnde produces more energy – from bioenergy sources – than it consumes. The best part: energy production is owned by the villagers through a co-operative.

Greening Local Business – The Canclone Experience

Canclone, an Etobicoke printshop, installed a 10 kW solar PV system in 2011. Here’s how they got there and what the experience has been like so far. Also check out greenTbiz’s video case study on Canclone’s project. 

Solar PV 101 & Community Power

How does rooftop solar work under the FIT program? What do the financials look like? And what does it mean to do such as project as a “community power project”?

FAQ

We’ve compiled a list of the most frequently asked questions on rooftop solar PV and community power below. If you cannot find what you’re looking for, please get in touch. Even better, come out to one of our upcoming seminars  and we’ll try to answer your question in person.  

Feed-in tariff (FIT)

About Community Power

Rooftop Solar PV


Why is greenTbiz putting on an educational series about community power?

With the transition in Ontario’s energy supply from large fossil fuel plants to smaller scale distributed generation consisting of renewable energy, an opportunity has opened up for individuals, small businesses and community groups to benefit by generating electricity and profits. To assist small businesses and BIA communities in taking advantage of this opportunity, TABIA’s greenTbiz Program has launched this seminar series to educate BIAs, BIA members and local residents on how and why they should consider the development of rooftop solar PV projects in local BIA communities.

Who can I contact to arrange a seminar?

Please get in touch with greenTbiz Program Manager Robert Wakulat. He can be reached via email at rwakulat@greentbiz.org or by phone at 416-6997.9000.

 

FEED-IN TARIFF (FIT)

What is a feed-in tariff?

A feed-in tariff (FIT) enables anyone who generates renewable electricity to connect their project to the public electricity grid and sell all the electricity they generate to the Province of Ontario under a long-term fixed contract at a guaranteed rate. Their revenue is calculated per kWh fed into the grid, making the system owner a true generator of electricity. Typically a generator has two meters, one for the electricity bought from the grid and one for that sold to the grid.

Ontario adopted feed-in tariffs for roof- and ground-mounted solar PV, wind, small hydro, biomass and biogas with passage of the Green Energy and Green Economy Act, 2009.  Under the Ontario program, the microFIT program covers systems with total AC power output of 10 kW and under. It is aimed at homeowners and small businesses and offers premium rates and a streamlined application process.  The FIT program is geared toward larger, commercial applications over 10 kW.

How do I connect to the electricity grid?

Your renewable energy project can either be “directly connected” to the electricity distribution system or “indirectly connected”. A direct connection is where your project is connected to the grid separately from any other customer or building. An indirect connection is where your project is connected to an existing building that is connected to the distribution system. Your renewable energy project(s) will be connected to the grid through an electricity meter that will be different from the meter that measures your consumption. This meter will allow your local electricity distribution company to measure the electricity you generate and pay you accordingly.

Can I use the energy I produce myself?

Not under a FIT program. The energy you produce and the energy you consume are metered separately. You pay your regular rates for the energy you consume and get paid the specified tariff for the energy you produce. In reality, especially for rooftop solar PV systems, a household or a business that has installed such a system may well end up using the energy they have just fed into the grid.

Other jurisdictions in Canada and the United States have introduced incentive schemes under which generators actually use the energy they produce themselves. Under a ‘net metering’ system, generators of renewable energy do indeed only have one meter that runs either backwards or forwards depending on whether more energy is consumed or produced at a given time. Net-metering is usually combined with a tax incentive scheme.

True ‘off-grid’ systems currently make financial sense in very remote locations only. Everywhere else feed-in tariffs or tax incentives are needed to further a more widespread adoption of renewable energy technologies. Over time, prices for hardware will and have come down significantly already, eventually making off-grid a more viable option for the future.

How much will my energy bill be reduced?

See above. Your local distribution company (LDC) (e.g. Toronto Hydro) will meter and account for the energy you consume and produce separately. Your LDC will charge you a nominal monthly administrative fee to manage your FIT account.

How much electricity does a home need?

The average Canadian household uses about 11,000 kWh of electricity a year. To compare, an ideally placed 10 kW solar PV system will feed about 13,000 kWh of electricity per year into the grid in Ontario. A 10 kW system is comparatively large for a roof-mounted residential system.

Is my project’s return-on-investment (ROI) dependent on government subsidies?

With solar and wind projects (biogas is a bit different in this respect), your revenue will indeed be dependent on tariff payments from the Ontario Power Authority based on the amount of energy you feed into the grid. As noted elsewhere, true off-grid systems for these technologies are not yet economically viable. Other factors that influence your ROI include hardware costs (which have been falling over the past few years), the quality of the installation, operation and maintenance costs and the amount of sun or wind hours you receive in a given year. Biogas projects may benefit from other revenue sources such as tipping fees to take feedstock, sales of digestate as fertilizer and the use of heat in applications such as greenhouses.

Is solar thermal (hot water) covered by the Ontario FIT?

No, solar thermal is not currently part of the FIT program.

When is the right time to apply for a FIT or microFIT contract?

The Ontario Power Authority is currently reviewing the FIT program and will not process any applications until further notice. The Ministry of Energy has tabled its recommendations, which are now being transformed into the new FIT rules by the OPA. Completion of the review is expected by May 2012. The OPA is looking at changes in pricing structure as well as regulatory requirements. 

Will the tariffs change after the review?

Other jurisdictions with FIT programs, such as Germany, have typically reduced their FIT tariff rates over time to reflect cheaper component prices and improved installation expertise. The Ministry of Energy’s recommendations see the rates for rooftop solar PV reduced between 9 to 31%, depending on system size. It remains to be seen what the final reductions will be. 

ABOUT COMMUNITY POWER

What is community power?

A community power project revolves around the financial, conceptual and organisational participation of citizens (local community) in a renewable energy project.

A community power project is a renewable energy project owned in full or in part by local residents. Ownership can be organized narrowly (e.g. through a Limited Partnership) or widely (e.g. through a co-operative). Community power democratizes electricity generation, ensures that investment returns will be enjoyed locally and lays the foundation for a more decentralized and robust electricity grid.

What legal entities are considered community power groups?

Under the old FIT rules, the following entities were considered community power groups with a 100% community participation level: 

  • one or more individuals resident in Ontario;
  • a registered charity with its head office in Ontario;
  • a not-for-profit organization with its head office in Ontario;
  • a “co-operative corporation”, as defined in the Co-operative Corporations Act (Ontario), all of whose members are resident in Ontario;
  • a private corporation whose shareholders all fall into the first four categories above, and for whom commercial electricity generation is not their primary business or employment;
  • a partnership or limited partnership whose partners all fall into the first four categories  above, and for whom commercial electricity generation is not their primary business or employment

In addition, joint ventures with entities that do not fall into the above categories are possible. The community ownership share in the project will determine the community tariff adder applicable to the project.

The new draft rules indicate a much tighter definition of community power but also offer priority status to community projects. The definition is supposed to be finalized by early May. 

Can a for-profit organisation be a community power group?

Yes, see previous answer.

Can municipalities be part of a community power project?

They can. However, only as part of a joint venture with the legal entities listed above under question 2.

Where can I find examples of community power projects?

Here are a few projects we know of. Some of them are already fully operational in Toronto:

For a list of other community projects operational and under development, go to the CEEP’s website at http://www.communityenergyprogram.ca/Project_Grants/FITGrants_Awarded.aspx 

Whom can I contact to help me plan my project?

Koenig & Consultants, greenTbiz’s partner in delivering this educational series, helps community groups develop their renewable energy projects. For contact details, please go to www.kci-newenergy.ca.

How can I access funding for a community power project?

The Community Energy Partnerships Program (CEPP) is a grant program designed to support community power in Ontario. They assist community power projects through “soft cost” funding support of up to $200,000. The CEPP is brought to you by the Community Power Fund and Deloitte, and has been made possible by the Ontario Power Authority and the Government of Ontario.

Like the FIT program, CEPP is currently not releasing any new funding agreements due to the FIT review. Relaunch is expected in July 2012. If the program continues as before, grants will be offered on an ongoing basis. One restriction to keep in mind is that CEPP does not cover any costs for work done prior to the grant application being deemed ‘substantially complete’ by their reviewers.

What are considered “soft costs” in a community power project?

Soft costs are all costs except hardware, construction or detailed engineering (usually the largest portion of costs). Examples of soft costs include those incurred for preliminary engineering and Connection Impact Assessment, Renewable Energy Approval, organizational development, business planning, marketing and communication.

What are the financing hurdles faced by community power projects?

Very early on, when a project is more vision than reality, you will need to retain the services of consultants and engineers to help you develop the project. For these soft costs, CEPP covers up to 90% of the costs. Over the course of the development, you will need to think about how to raise construction and hardware funding. Forming a co-operative or limited partnership and raising money through shares or bond capital is one option. Some credit unions have signaled a willingness to lend to community power projects. Working with a local branch of the large banks may also be an option.

 

ROOFTOP SOLAR PV

Will the additional load from the panels on the roof be a structural problem?

This depends on the quality and age of the roof you are considering for your solar installation. In any case, it is highly recommended that a structural engineer inspect the roof prior to the installation of any panels to make sure it can bear the additional load.

How heavy are solar panels?

On average, one panel weighs about 20 kg.

What warranties are there for hardware?

A FIT or microFIT contract has a 20-year term; your hardware may be functional over a longer period though. Typical hardware warranties are provided for:

  • Panels: 5-10 years on workmanship and 20 years on productivity
  • Racking system: typically 5 years
  • Inverters: varies widely, minimum 5 years but extended warranty can be acquired

What’s the total upfront investment for a rooftop system?

Of course, the upfront investment varies between system sizes and the type and quality of panels, racking system and inverters chosen. The larger the system, the more economies of scale will come into play as soft costs stay pretty much the same. Generally speaking, prices are prone to coming down over time. To provide you with some ball park numbers:

  • systems of up to 11 kW – $6,000/kW
  • systems of up 50 kW – $ 5,200/kW
  • systems larger than 50 kW – $ 4,500/kW

What are the operation and maintenance costs?

Average operation and maintenance (O&M) costs depend on the quality of the hardware chosen for the solar system. Generally speaking, solar requires very little O&M. The main components that might need replacement or repair are the inverters. To be conservative, a reserve fund of 5% of the generated revenue should be established.

How can I finance my project?

If you are planning to individually own your solar project, you may consider financing it through a mortgage on your house. Major banks (e.g. RBC, TD) or credit unions (e.g. Italian Canadian Credit Union) have or are developing specific financing tools for microFIT projects.

As a community power group you will be eligible for up to $200,000 in soft cost grant financing through the Community Energy Partnership program (CEPP). Depending on the size of your project you may consider forming a co-operative and issuing shares or bonds to raise the funds required for hardware and construction.

Do we need insurance?

Yes, you will need insurance. If the solar system is installed on the roof of your property, it will need to be added to your property insurance. More and more insurers are adding insurances for rooftop solar to their standard offering, but you might still experience that some insurers are not moving ahead fast enough.

How much annual sun radiation can be predicted for my project?

Natural Resources Canada assumes that the Greater Toronto Area gets approximately 1,100-1,200 hours of sun each year. When building a preliminary model of your solar installation, you can employ free software such as RETscreen, which will allow you to draw on climate data for your area to model your system’s performance.

How does the life span of the roof compare to the life span of a solar PV panel? What happens if I have to fix my roof?

Roof life and panel life are about equal. If your roof is in the latter stages of its life and you’re thinking about installing solar panels, then consider re-roofing prior to setting up your system. In other cases, make sure to build in a reserve fund for re-roofing and re-installation into your financial model.

What happens with snow on the panels?

Generally speaking, production in the months of December, January and February amounts to only 15% of the overall annual system output in Ontario. The solar array has some inbuilt mechanisms to deal with snow dump. Due to the tilted layout, snow can slide down the panels. Once part of the panel is exposed, the solar cell will heat up and which will help melt away the rest.

Do you clean the panels yourself?

You can definitely clean them yourself being mindful of taking the appropriate safety precautions but there are also people out there who offer this service. Often rain will do the job but it’s recommended to inspect and clean the panels in early spring to get ready to harvest the first precious spring rays.

Are there any issues in hooking up to the electricity grid?

Before you incur any major costs on a project, you should consult with your Local Distribution Company (e.g. Toronto Hydro) to determine whether grid capacity is available in your area and if you will be able to connect to the grid. After your project has been built, Toronto Hydro will inspect the system and give its approval before you can turn on the switch.

Is there any potential for leaks with a penetrating system?

The risk of leaks can be minimized through a number of technical solutions. A qualified installer will know how to apply these and seal the roof properly.

How do I dispose of panels at the end of their useful lives?

Like other electronic waste, a solar panel needs to be disposed of very carefully at the end of its life. The solar industry is currently working on addressing the solar waste that is expected in the future. Some pioneering panel manufacturers have already established recycling programs for their panels. In Europe, the industry association PV Cycle manages a collection and recycling scheme for end-of-life solar modules. You can read more about this issue here: Solar Waste.

What’s the carbon footprint of a solar panel?

Research indicates that a solar panel’s carbon footprint is at least 20 times smaller than that of coal. Based on the most cited study, conducted by Danish utility Vattenfall in 1999, solar PV produces 50 grams of CO2 per kilowatt-hour of energy produced. On the other hand, coal generates 974 grams of carbon dioxide per kilowatt hour. Moreover, this is a 10-year-old study and solar technology has progressed leaps and bounds over the past decade. This suggests the disparity between the two carbon footprints could be even greater. A barrage of scientific studies show that the carbon life-cycles of solar power (PV and thin film) are around three years. Thus solar panels produce as much energy as was consumed during their manufacturing and installation within three years.  After three years they are carbon negative. Read more at Mother Nature Network: How Much CO2 does one solar panel create?