The buck stops…where?

485px-William_Shatner_James_Kirk_Star_Trek_1967The original Star Trek television series offers an interesting take on leadership. In episode after episode, Captain Kirk is taken out of commission by some incident or other. The crew struggles valiantly to avert disaster, but to no avail – inexorably, without the security of having Kirk in command, the crisis deepens until all hope seems lost. Then, just in the nick of time, the captain is cured/freed/retrieved, then he strides onto the bridge with his customary bravado, pulls some cosmic rabbit out of a subspace hat, and saves the day.

Ontario’s renewable energy sector is desperately in need of a Captain Kirk.

Three stumbling blocks will persist as long as the leadership vacuum continues. The first is the huge discrepancy between the number of MicroFIT applications and the ability of OPA and Hydro One to process them. The second is the huge variation in fees, procedures, and rules across Ontario municipalities. The third is the faint-hearted goals that Ontario’s Long-Term Energy Plan has set for solar and other forms of renewable energy.

According to the OPA’s FIT program summary released last week, over a thousand new MicroFIT applications were received during the two-week reporting period. During the same period, only 75% of that number (786 applications) reached an end state – rejected, withdrawn, denied, or – dare I say it – connected and in production. One-third more projects are going in than are coming out. That means a growing backlog.

When you look inside the process, things get even worse. The Distribution System Code mandated that LDCs (Local Distribution Companies – Hydro One and its local counterparts like Toronto Hydro) take no longer than 15 days to respond to completed applications, either by refusing the request or extending an Offer to Connect. Once all the approvals were in, LDCs would have at most five days to connect the project.

If the LDCs keep up at the rate their going, it will take seven months to get through the pile of projects awaiting approval, and seventeen months to clear the backlog of projects that are approved and are just waiting to be hooked up. In other words, if nothing changes, a person submitting a MicroFIT application today can expect to wait at least two years before supplying their first watt to the grid. The Green Energy Act envisioned a period of twenty days (or 65 days if the project was not using an existing grid connection). The discrepancy is astounding.

Hydro One addressed this issue by asking that their regulator exempt them from the timeline stipulations, and instead permit them to work on a “best efforts” basis.

One of the main objectives of the GEA was to stimulate investment and create jobs in Ontario. When installers have to wait as long as two years between the time that they make a sale and the time that they install the system (and collect their revenue), it is difficult to imagine how they can stay in business. The inability of Hydro One and the other LDCs to stick to reasonable timeframes for approvals and connections is driving a stake right through the heart of this nascent industry, and making it impossible for the GEA to achieve one of its key objectives.

Whoever is in charge of the GEA – whether it’s the Ministry of Energy, the OPA, or the OEB – needs to solve this problem. On the one hand, they need to hold LDCs’ feet to the fire and demand accountability for timelines. On the other, they need to devise some way of throttling the number of applications, or at least giving applicants a reasonable estimate on how long the process will take.

One interesting characteristic of the solar energy system installation business is its regionality – or lack thereof. I’ve spoken to quite a few installers, and although they would prefer to stick to one area, the vagaries of OPA/LDC approvals have forced them to travel all over the province in search of sales. This means that most installers work in multiple municipalities, and have direct experience with just how dramatic are the variations in treatment between different cities and towns. In some, there is a specific fee just for pouring the concrete pad which forms the foundation of a ground-mount solar tracking array. In others, there are other arbitrary and inconsistent fees. This imposes huge costs and administrative hassle on installers.

Whoever is in charge of the GEA needs to start banging some heads together. There is no reason for so much variation between municipalities. With a little bit of effort, these inconsistencies could be eliminated and the approval process could be harmonized. This would remove a completely unnecessary barrier to efficiency in the industry.

Finally, there is the big-picture issue of objectives. The Ontario Long-Term Energy Plan envisions that solar PV will supply a paltry 1.5% of the province’s energy mix by 2030. This is a pittance. A study by the Queen’s University Applied Sustainability Research Group indicates that solar farms on marginal land in 14 counties south-eastern Ontario alone could supply 90 GW of peak power, or roughly 80% of the projected energy demand in 2030. The cost of solar energy is dropping dramatically each year, and by some estimates is expected to be comparable to that of fossil fuels and nuclear well within the timelines of the LTEP.

Why is the Ministry of Energy setting its sights so low? Currently, installations are being done on a first-come-first-served basis without regard for the relative societal value inherent in each project. With genuine leadership and a coherent plan, solar installations could be stimulated in the highest-value locations – urban rooftops. Then, as the industry grows and prices drop, installations could be extended to lower-value locations such as the marginal land in the Queen’s study.

Who is really in charge? Isn’t it time that somebody take command, shake things up, and demonstrate that there is so much more that could be done to make the GEA live up to its potential?

Captain Kirk to the bridge.

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