FIT (Feed-In Tariff) Program
FIT in Ontario
New Market Opportunity: Ontario's New Feed-In Tariff Program
Bottom Line Facts:
- Ontario's Feed-In Tariff (FIT) program for renewable energy generation is a cornerstone of the province's Green Energy Act. The provincial government launched the program in September 2009, and the Ontario Power Authority (OPA) started accepting applications October 1, 2009. It is North America's first comprehensive feed-in tariff program for renewable energy.
- A feed-in tariff or FIT is a straightforward way to contract for renewable energy generation. It provides standardized program rules, prices and contracts.
- The program encourages the development of renewable energy projects across Ontario. The program delivers significant benefits to project developers. The prices are designed to cover project costs and provide a reasonable rate of return on the investment over the term of the contract.
- The program is divided into two streams - FIT and MicroFIT. The FIT Program is for renewable energy projects that can generate more than 10 kilowatts (kW) of electricity often related to commercial properties and in-ground facilities.
- MicroFIT is designed to encourage homeowners, businesses and others to generate renewable energy with projects of 10 kilowatts (kW) or less.
- MicroFIT is designed to make it simpler and faster to get small-scale renewable projects installed and producing power.
- The FIT Program is designed to give developers and their lenders the confidence needed to undertake projects - and to enable Ontario to build a reliable and sustainable electricity system
- Prices paid for renewable energy generation under FIT and MicroFIT vary by energy source and take into account the capital investment required to get a project up and running:
- Under the program, participants are paid a fixed-price for the electricity they generate. FIT and MicroFIT contracts are for 20 years, with the exception of waterpower, which has a 40-year FIT contract
- Click here: to view the FIT and MicroFIT Tariff price schedule
Background
At the end of 2006, the Ontario Power Authority (OPA, Canada) began its Standard Offer Program (SOP), the first in North America for small renewable projects (10MW or less). This guarantees a fixed price of $0.42 CDN per kWh over a period of twenty years. There was no specific contract allocation prior to the installation. Uncertainty was called as the main reason the program's success was limited. The fact that it was hard to see a decent return on investment with the relatively low remuneration for power generated, did not contribute to its success. On October 1, 2009, OPA issued a Feed-in Tariff (FIT) program, increasing the fixed price to $0.802 per kW while offering a conditional contract prior to any actual construction of investment in a power generation facility.
The political purpose of incentive policies for solar PV power generation is to facilitate an initial small-scale deployment to begin to grow the industry, even where the cost of PV is significantly above grid parity, to allow the industry to achieve the economies of scale necessary to reach grid parity. The policies are implemented to promote national energy independence, high tech job creation and reduction of CO2 emissions.
By encouraging the development of renewable energy in Ontario, the FIT Program will:
- help Ontario phase out coal-fired electricity generation by 2014 - the largest climate change initiative in Canada
- boost economic activity and the development of renewable energy technologies
- create new green industries and jobs.
FIT in Saskatchewan
In order to propose a viable feed-in tariff scheme for Saskatchewan, we must first consider the unique properties of Saskatchewan. Saskatchewan is blessed with abundant yearly sunshine. Saskatchewan receives the most hours of sunshine per year, an average of 2000 - 2500 hours of sunshine annually make it Canada's sunniest Province. The City of Estevan in the southeast records an average of 2540 hours of sunshine a year. Since Saskatchewan solar resources have a higher capacity factor than Ontario's, the province does not need to provide as large a fiscal incentive as Ontario to create an equivalently profitable solar industry. This means that it can scale back the incentive portion of the Feed-in tariff by an amount proportional to the difference in capacity factors between Saskatchewan and Ontario. It is our estimation that an incentive approximately one third the size of Ontario's will be a reasonable subsidy for Saskatchewan's solar industry.
Saskatchewan Small Scale Producers (under 100kW production potential) Tariff program:
- Solar PV 32.4¢/kWh
- Wind 11.7¢/kWh
FIT in Minnesota
In 2007, Minnesota enacted its renewable energy standard calling for the state to supply 27.5% of its electricity with renewable energy by 2025, and instituted a goal of reducing greenhouse gas emissions 80% by 2050. On February 28, 2008 Representative David Bly, (DFL 25B) introduced the bill called HF 3537 calling on the state to implement a system of renewable energy feed-in tariffs patterned after those in Germany. The bill requires electric utilities to accept generation from renewable power produces that is "fed into" the grid and pay for that generation. Unlike other states considering feed-in tariffs, Minnesota's proposed law limits feed-in tariffs to "community-based" projects connected at distribution voltages. Nevertheless, the definition of what constitutes a community-based project is broad and can include projects with outside ownership up to 49% of the equity. There are no project size caps, nor specific program caps.
The tariffs proposed in HF 3537 are equivalent to those in Germany and match those proposed in Michigan, and Illinois.
- Rooftop solar less than 30 kW: $0.65 USD/kWh
- Solar façade cladding less than 30 kW: $0.71 USD/kWh
FIT PROGRAMS AROUND THE WORLD
Financial incentives for photovoltaics have been applied in many countries, including Australia, China, Germany, Israel, Japan, and the United States
The Japanese government through its Ministry of International Trade and Industry ran a successful programme of subsidies from 1994 to 2003. By the end of 2004, Japan led the world in installed PV capacity with over 1.1 GW.[67]
In 2004, the German government introduced the first large-scale feed-in tariff system, under a law known as the 'EEG' (Erneuerbare Energien Gesetz) which resulted in explosive growth of PV installations in Germany. At the outset the FIT was over 3x the retail price or 8x the industrial price. The principle behind the German system is a 20 year flat rate contract. The value of new contracts is programmed to decrease each year, in order to encourage the industry to pass on lower costs to the end users. The programme has been more successful than expected with over 1GW installed in 2006, and political pressure is mounting to decrease the tariff to lessen the future burden on consumers.
Subsequently Spain, Italy, Greece (who enjoyed an early success with domestic solar-thermal installations for hot water needs) and France introduced feed-in tariffs. None have replicated the programmed decrease of FIT in new contracts though, making the German incentive relatively less and less attractive compared to other countries. The French and Greek FIT offer a high premium (EUR 0.55/kWh) for building integrated systems. California, Greece, France and Italy have 30-50% more insolation than Germany making them financially more attractive. The Greek domestic "solar roof" programme (adopted in June 2009 for installations up to 10 kW) has internal rates of return of 10-15% at current commercial installation costs, which, furthermore, is tax free.
In 2006 California approved the 'California Solar Initiative', offering a choice of investment subsidies or FIT for small and medium systems and a FIT for large systems. The small-system FIT of $0.39 per kWh (far less than EU countries) expires in just 5 years, and the alternate "EPBB" residential investment incentive is modest, averaging perhaps 20% of cost. All California incentives are scheduled to decrease in the future depending as a function of the amount of PV capacity installed.
Various technologies
Due to the growing demand for renewable energy sources, the manufacture of solar cells and photovoltaic arrays has advanced dramatically in recent years.
Three key elements in a solar cell form the basis of their manufacturing technology. The first is the semiconductor, which absorbs light and converts it into electron-hole pairs. The second is the semiconductor junction, which separates the photo-generated carriers (electrons and holes), and the third is the contacts on the front and back of the cell that allow the current to flow to the external circuit. The two main categories of technology are defined by the choice of the semiconductor: either crystalline silicon in a wafer form or thin films of other materials.
Crystalline Silicon Solar Cells - Market Share: 93%
Two types of crystalline silicon are used in the industry. The first is monocrystalline, produced by slicing wafers (up to 150mm diameter and 350 microns thick) from a high-purity single crystal boule. The second is multicrystalline silicon, made by sawing a cast block of silicon first into bars and then wafers. The main trend in crystalline silicon cell manufacture is toward multicrystalline technology.
For both mono- and multicrystalline Si, a semiconductor homojunction is formed by diffusing phosphorus (an n-type dopant) into the top surface of the boron doped (p-type) Si wafer. Screen-printed contacts are applied to the front and rear of the cell, with the front contact pattern specially designed to allow maximum light exposure of the Si material with minimum electrical (resistive) losses in the cell.
The most efficient production cells use monocrystalline c-Si with laser grooved, buried grid contacts for maximum light absorption and current collection.
Some companies are productionizing technologies that by-pass some of the inefficiencies of the crystal growth/casting and wafer sawing route. One route is to grow a ribbon of silicon, either as a plain two-dimensional strip or as an octagonal column, by pulling it from a silicon melt.
Another is to melt silicon powder on a cheap conducting substrate. These processes may bring with them other issues of lower growth/pulling rates and poorer uniformity and surface roughness.
Each c-Si cell generates about 0.5V, so 36 cells are usually soldered together in series to produce a module with an output to charge a 12V battery. The cells are hermetically sealed under toughened, high transmission glass to produce highly reliable, weather resistant modules that may be warrantied for up to 25 years.
Modules are designed to meet rigorous certification tests set by international standards agencies.
Thin Film Solar Cells - Market Share: 7%
The high cost of crystalline silicon wafers (they make up 40-50% of the cost of a finished module) has led the industry to look at cheaper materials to make solar cells.
The selected materials are all strong light absorbers and only need to be about 1micron thick, so materials costs are significantly reduced. The most common materials are amorphous silicon (a-Si, still silicon, but in a different form), or the polycrystalline materials: cadmium telluride (CdTe) and copper indium (gallium) diselenide (CIS or CIGS).
Each of these three is amenable to large area deposition (on to substrates of about 1 meter dimensions) and hence high volume manufacturing. The thin film semiconductor layers are deposited on to either coated glass or stainless steel sheet.
The semiconductor junctions are formed in different ways, either as a p-i-n device in amorphous silicon, or as a hetero-junction (e.g. with a thin cadmium sulphide layer) for CdTe and CIS. A transparent conducting oxide layer (such as tin oxide) forms the front electrical contact of the cell, and a metal layer forms the rear contact.
Thin film technologies are all complex. They have taken at least twenty years, supported in some cases by major corporations, to get from the stage of promising research (about 8% efficiency at 1cm2 scale) to the first manufacturing plants producing early product.
Amorphous silicon is the most well developed of the thin film technologies. In its simplest form, the cell structure has a single sequence of p-i-n layers. Such cells suffer from significant degradation in their power output (in the range 15-35%) when exposed to the sun.
The mechanism of degradation is called the Staebler-Wronski Effect, after its discoverers. Better stability requires the use of a thinner layers in order to increase the electric field strength across the material. However, this reduces light absorption and hence cell efficiency.
This has led the industry to develop tandem and even triple layer devices that contain p-i-n cells stacked one on top of the other. In the cell at the base of the structure, the a-Si is sometimes alloyed with germanium to reduce its band gap and further improve light absorption. All this added complexity has a downside though; the processes are more complex and process yields are likely to be lower.
In order to build up a practically useful voltage from thin film cells, their manufacture usually includes a laser scribing sequence that enables the front and back of adjacent cells to be directly interconnected in series, with no need for further solder connection between cells.
As before, thin film cells are laminated to produce a weather resistant and environmentally robust module. Although they are less efficient (production modules range from 5 to 8%), thin films are potentially cheaper than c-Si because of their lower materials costs and larger substrate size.
However, some thin film materials have shown degradation of performance over time and stabilized efficiencies can be 15-35% lower than initial values. Many thin film technologies have demonstrated best cell efficiencies at research scale above 13%, and best prototype module efficiencies above 10%. The technology that is most successful in achieving low manufacturing costs in the long run is likely to be the one that can deliver the highest stable efficiencies (probably at least 10%) with the highest process yields.
Amorphous silicon is the most well-developed thin film technology to-date and has an interesting avenue of further development through the use of "microcrystalline" silicon which seeks to combine the stable high efficiencies of crystalline Si technology with the simpler and cheaper large area deposition technology of amorphous silicon.
However, conventional c-Si manufacturing technology has continued its steady improvement year by year and its production costs are still falling too.
The emerging thin film technologies are starting to make significant in-roads in to grid connect markets, particularly in Germany, but crystalline technologies still dominate the market. Thin films have long held a niche position in low power (<50W) and consumer electronics applications, and may offer particular design options for building integrated applications.



