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Ontario's Standard Offer Contracts

March 22 2006.

Ontario has announced a breakthrough policy which is certain to jump start the adoption of grid-tied renewable energy projects in the province, and set a standard for other provinces to match.

Ontario's Standard Offer program will offer $0.11/kWh (kilowatt-hour) to producers of wind, biomass and small hydro energy. It will offer $0.42/kWh for solar photovoltaic energy. The term of the contracts will by 20 years, and there will be an inflation adjustment. The residential retail price for electricity in Ontario is under $0.06/kWh.

There is no limit to the number of projects that may apply for a contract, but the size of each project is capped at 10MW (megawatts). 10MW of capacity is approximately sufficient to serve 10,000 homes.

The contracts are available to anyone, including homeowners, businesses and commercial energy producers. The electricity produced would be fed into the electricity grid. The contracts are expected to be available by June 2006. Many details for the implementation of the Standard Offer program will be worked out by the Ontario Power Authority and the Ontario Electricity Board.

How much will a homeowner make with a PV SOC?
In Ontario one watt of PV will generate about 1 kWh per year. Thus a 1 kW (1,000 watt) PV system will produce about 1,000 kWh per year – or about $420 at the $0.42 per kWh SOC rate for PV.

Will homeowner’s “make money” on a SOC contract?
The support offered under the SOC program covers approximately 50% of the cost of a PV system. The SOC program in this initial phase is designed to stimulate the market leaders or “early adopters” to purchase PV systems. This will allow the industry to build capacity and prepare for the greater use of PV in Ontario within 5 years.

Further Information

Government of Ontario
Background Information
Media Release
Ministry of Energy

Canadian Solar Industry Association
Background Information
Media Release

BC Sustainable Energy Association
Media release

Ontario Sustainable Energy Association (OSEA)

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