New Solar Contracts Welcomed by Solar Industry but Something has to Give
On February 24, the Ontario Power Authority (OPA) awarded 257 MW ac of new utility-scale solar projects. While this announcement was great news for many in the province’s solar industry, the total MW volume of built and awarded contracts is now roughly equivalent to the government of Ontario’s draft Long Term Energy Plan (LTEP).
Clearly, not all contracts will be built. Nonetheless, if solar contracts continue to be awarded at the current rate, the province will exceed the LTEP long before 2018. Something has to give.
- Will the market peak early and then fizzle out?
- Will the commercial rooftop and residential sectors be sacrificed to make room for continued utility-scale installations?
- Will a large portion of currently awarded contracts not be built (due to permitting, financing, politics or other reasons)?
- With a moratorium on offshore wind, will solar be given a larger role in our energy mix?
As the draft LTEP gets closer to becoming a final document, it will be very interesting to see if the Ontario Energy Board (OEB) notices and takes action on the discrepancy between the target for solar PV and the amount of contracts currently awarded. It is possible that the OEB will reject the draft and require the solar target to more accurately reflect the status of awarded contracts in the province.
In sum, Ontario’s PV market continues to be flooded with contract offers. While many will benefit from this high volume in the short-term, these contracts threaten to overshoot the target laid out by the Ontario Government in it’s draft LTEP. The likely impact is that the early flood is unsustainable and will later be reduced to a trickle, something that is particularly worrying for both manufacturers and developers with significant investments in their Ontario organization.
Illustration photo by Falling Heaven
