Ontario cuts green power rates, commits to targets
By Susan Taylor
TORONTO (Reuters) - Ontario's renewable energy sector breathed a sigh of relief on Thursday as the province announced rate reductions for solar and wind power that were more modest than some had feared and it repeated its commitment to renewable power targets.
Following a review of its ambitious clean-energy program, Canada's most populous province said it will cut the rates it pays for power from new solar projects by more than 20 percent and wind rates by about 15 percent, reflecting lower prices for generating equipment such as solar panels and wind turbines.
Ontario's feed-in-tariff plan, aimed to spur job creation and help replace coal-fired power in the province, has been a source of anger for ratepayers facing higher electricity bills.
Launched in 2009 with a global recession underway, the program paid green energy producers generous above-market rates for power that they could "feed" into the provincial grid. The current rates will still apply to existing projects.
"The reduction is certainly not insignificant, but I don't believe it's a knock-out punch," said Bruce Cousins, CEO of solar power equipment maker Carmanah Technologies. "It is going to put pressure on (profit) margins throughout."
The program, which contributed to rising electricity bills in Ontario, became a flashpoint in last year's provincial election, in which the Liberal Party was re-elected but with fewer seats in the legislature. The opposition Progressive Conservatives campaigned on a promise to slash the program.
Analysts and clean energy companies say the rates announced on Thursday appear adequate to produce profit from renewable power projects, but the reductions mean developers will need to work more efficiently. Continued...