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Hamilton Solar Rooftop Seminar. Moderator Michael Wright A-Team Strategies February 24 2011. What's Changing In the World of Energy. Changes You See Happening. What's Changing In the World of Energy. List Changes You See Happening The world needs: electric power from clean sources
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Hamilton Solar Rooftop Seminar Moderator Michael Wright A-Team Strategies February 24 2011
What's Changing In the World of Energy • Changes You See Happening
What's Changing In the World of Energy List Changes You See Happening The world needs: • electric power from clean sources • to reduce reliance on fossil fuels • alternatives • to conserve energy
Green Energy Act The Ontario Government passed the “Green Energy and Green Economy Act” into law on May 14, 2009. The objectives of the Ontario Green Energy Act: • Create the potential for savings and better managed household energy expenditures through a series of conservation measures. • Spark growth in clean and renewable sources of energy such as solar, wind, hydro, biomass and biogas in Ontario. • Create 50,000 jobs for Ontarians in its first three years.
Green Energy Act • Create the potential for savings and better managed household energy expenditures through a series of conservation measures.
Green Energy Act – Growth in RenewableEnergy • Spark growth in clean and renewable sources of energy such as solar, wind, hydro, biomass and biogas in Ontario. Creation of a Feed-in Tariff Tariff: official list or table showing the duties or customs imposed by a government on imports or exports Duties: payment, service, etc., imposed and enforceable by law or custom.
Why a Feed in Tariff? • Proven in European market (Germany, Italy, France) • Economic, manufacturing and job growth. • Rewards early adopters, tariffs decline over time. • Cost of program needs to be considered in light of the funds that would have been spent to development infrastructure (power plants, transmission upgrade) • Solar photovoltaic (PV) installations can happen much faster than building independent power plants and payments are made over time, so investment costs are less up front. Makes for a very good market solution.
Feed-in Tariff (FIT) Program Background • Program enabled by passage of the Green Energy & Green Economy Act of 2009. • Ontario Power Authority (OPA) responsible for implementing the program. • Official launch date: Sept 2009 . OPA began accepting applications: Oct 2009. • Contract term is 20 years for PV projects.
Micro-FIT vs. FIT Program Micro-FIT • 10kw or less • Highest tariff 80.2 cents/kWh • 64.2 cents for G/Mount • Ground or Rooftop • Less restrictions • Easier application process • Goal for more distributed power generation. FIT • Over 10kw systems • Commercial Rooftops • Ground Mounted • Over 500kW subject to capacity allocation restrictions of electric grid. • Agricultural land restrictions for ground projects.
Green Act Objectives 3. Create 50,000 jobs for Ontarians in its first three years.
Domestic Content Compliant • All systems must meet the required 60% of domestic content to be given a final contract offer from the OPA • If the OPA suspect that your system/project is not domestic content compliant then you can be subject to an audit by the OPA • To help protect developers/installers, make sure you get the following documentation: • Letters from manufacturers • Module manufacturers • Inverter manufacturers • Racking manufacturers
Business Opportunities – Increasing Revenue If you are a building owner/ manager how can you increase revenue from your building? • Achieve 100% occupancy • Raise rents
Business Opportunities Increasing Revenue Another place to look for more revenue – Your roof! • Capitalizing of the Ontario Power Authorities – Feed-in Tariff Program
Business Opportunities – Buying Solar Equipment Owner risk/responsibility for: • The purchase of solar panels plus related hardware 1.7 – 2.0 million dollars • Applications • Contracts • Insurance • Maintenance • Book keeping • Repairs Owner rewards - Example • 40,000 sq ft yields approximately 250 KW • Projected first year income $290,000 • 10% - 14% return on equity ( 30% down payment) • Projected 7 – 9 year time frame to pay off initial investment
Business Opportunities – Buying Solar Equipment • Company faced a large capital expenditure • Most companies their core business is not energy production
Business Opportunities Leasing Roof Space Risk • Less Risk = Less Return • Less Risk = Less Responsibility Return 20 year contract Set rate Less return