Why don’t you stick that solar panel where it’ll do the most good?

In George Orwell’s Animal Farm, some domestic animals overthrow their masters and take control the farm for themselves. Their porcine leaders announce the farm’s new motto: “All animals are equal”.  However, the pigs gradually assume special status, revising the motto to read: “All animals are equal but some animals are more equal than others”.

In my October 5th post entitled Power to the People, I spoke of solar power bringing about a new era of democratized electricity production. In a democracy, each vote carries the same weight (in theory, at least). However, when power generation is distributed rather than centralized, it cannot be this way. Much as it may irk rural dwellers, the urbanite matters more.

If a farmer sticks a ground-mount solar array in the corner of her field, the electricity it produces will go in part to offset the power that the farmer herself uses. The rest must make its way through the wires to the next consumer, with the inevitable transmission and distribution (T&D) losses. However, if a city dweller puts solar panels on the roof of their home, the resulting electricity will suffer almost no T&D losses before it gets consumed.

The authors of the Ontario MicroFIT program wanted to create a higher incentive for people in the city than in the country. They used the rooftop array as a proxy for urban producers, and ground-mount as a proxy for rural. That’s why, when you look at the rates offered to small-scale electricity producers, the rate is higher for rooftop solar compared to ground-mount solar.

That approximation is a bad one, for five reasons.

First, a person living in the country has a roof, too. That roof is less likely to be obstructed by other buildings, and hence is an optimal location for solar panels. Unless the power then has to travel over hill and over dale to get to market. So the MicroFIT program designers unwittingly created a big incentive for country folk to put solar panels on their rooftops.

Second, people who live in the country – farmers, especially – are very resourceful when it comes to squeezing every possible penny of value from what they’ve got. They have land. They want to get the most of it. So even though the rate for ground-mount solar is lower, putting a solar array in an unproductive corner is a no-brainer. Especially if a developer is willing to take care of all the heavy lifting to design, build, and finance the project.

Third, consider real estate turnover statistics. Rural properties often stay in the same family for generations. By comparison, houses in the city change hands far more frequently. A solar array is a big investment, and not one you’re likely to make if you expect to sell your house again in a few years.

Fourth, the urbanite’s key resource is not land, but money – and there are many competing investment opportunities. I calculated that the congregation of Guelph’s Dublin Street United Church should expect about a 13% return on the money they invested in their rooftop solar array. That’s not too shabby. But finance-savvy people know that improving energy efficiency has a really good return as well, especially since the otherwise eco-brainless federal Conservatives extended the EcoEnergy benefit. You can also get a very good payback on other measures with no environmental flavour, like debt reduction.

There is one more consideration. Rural folks have a pioneering, “git ‘er done” mindset that has little interest in, or respect for, bureaucratic policies and procedures. They are less likely to follow the established steps to the letter. And, if things go off the rails, they aren’t going to take it lying down (as exemplified by the uproar that happened earlier this year when Hydro One notified thousands of MicroFIT applicants that they would not be connected).

All of these factors have conspired to deliver far more rural MicroFIT applicants than the program authors anticipated, and to make those applicants a much bigger headache to those administering the program.

How did this happen? The Ontario MicroFIT program was based on a similar program in Germany. There’s a clue.

Although Ontario has a lower percentage of the population living in rural areas (15% compared to Germany’s 26%), those rural people are a lot more spread out – the population density in Germany is more than fifteen times higher than Ontario (229 people/km2 in Germany compared to 13.8 in Ontario).  So, a kilowatt of electricity from a Canadian rural producer has to travel much further to get to market than its German equivalent. The problem presented by rural producers is an order of magnitude larger in Canada than Germany.

It’s time for a rethink.

First, the rooftop/ground-mount terminology in MicroFIT program rules and documentation must be abandoned. It encourages the wrong kind of solar installation. The program should say what it means, and offer preferential rates to urban applicants only.

Second, there must be more active encouragement of urban installations. Groups like Our Power, which helps urban neighbours to collaborate on evaluating installers and obtaining financing, should receive incentives such as fast-track project approvals and priority grid connection.

Third, the construction permitting process should be revised to encourage urban real estate developers to include solar energy production as part of new builds.

These measures will help concentrate solar power development where it will do the most good – in the cities. And MicroFIT applicants from urban areas will find their rightful place. A place where they are more equal than others.

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