Ontario FIT Program Explained

FIT, or feed-in tariff, is a worldwide, governmentally funded program that is designed to encourage the growth of renewable energy technologies such as wind energy. It is achieved by offering long-term contracts, 20 years in the case the Ontario FIT Program for onshore wind energy projects, to renewable energy producers. Furthermore, the program also awards a lower per-kWh price, 13.5 ยข/kWh for wind power created in Ontario, to further assist in the growth of these renewable technologies.

Ontario first introduced their own feed-in tariff program in 2006, and later revised it in 2009, when the Green Energy Act and FIT program were officially launched with the goal of:

  • Making it easier and more efficient to develop renewable energy projects
  • Stimulating the economy and creating new jobs
  • Replacing output lost by the closure of coal-fired plants with cleaner sources of renewable energy

In just the first two years of the FIT program there have been approximately 2,500 medium and large renewable energy projects awarded and over 11,000 microFIT projects, with enough clean renewable energy produced to power almost 1.2 million homes.

Thanks largely to the efforts of the FIT program, Ontario has been able to shutdown 8 of its 19 coal-fired plants in the province, with the remaining scheduled to be closed by the end of 2014. Technologies such as wind and solar will be needed to make up the difference.

Even though wind energy is relatively new to Canada, two of the largest wind farms in the country are already located in Ontario, and by the end of 2009 they were producing nearly 1,200 megawatts of electricity for the province.

The Ontario FIT program is currently in the process of its 2-year review, which will help to ensure the continued success and sustainability of the program. The outcome of the review may be uncertain, but according to the Ministry of Energy website, Deputy Minister Fareed Amin expects to submit his “recommendations to the minister in the near future”.

With the recent release of the Drummond report, the Commission on the Reform of Ontario’s Public Services recommends that the province can reduce the impact on electricity prices by “lowering the initial prices offered in the FIT contract and introducing degression rates that reduce the tariff over time to encourage innovation and discourage any reliance on public subsidies”.

Only time will tell what the future of Ontario’s FIT program will be.

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