Solar outlook in Ontario promising despite FiT cut

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The Canadian province of Ontario is expected to maintain its position as a leading North American solar market despite a recent reduction in its feed-in-tariff (FiT) and the scrapping of its solar local content requirement (LCR).

According to solar analyst, SolarBuzz, the 1-5% reduction in the tariff for projects of 10-500kW in size, which took effect from 30 September, and for projects under 10kW in size from 1 January 2015, will not diminish Ontario’s position as Canada’s market leader.

The 60% LCR in Ontario’s FiT has also been lifted for projects dating back to 25 July 2014.

Both the FiT and LCR were contentious, with political parties threatening to scrap the FiT and a World Trade Organization investigation forcing Ontario to drop the LCR, which had been conceived to build a local manufacturing base in the province.

But SolarBuzz predicts even with the changes, Ontario will still stay on top as a major solar market in Canada and North America.

SolarBuzz analyst Michael Barker wrote in a blog post: “Overall, the Ontario market will continue to be the dominant market in Canada and one of the top 10 state/provincial-level markets in North America. There is still a significant project pipeline that is being developed under previous FIT rounds and the Ontario Government has indicated it will continue to support at least 200 MW of FIT installations per year for several years.”

Barker said the recent FiT cuts were less dramatic than previous ones, which had been as much as 50%, and that with the removal of the LCR, pricing levels should still prove attractive to investors.

A tariff for large-scale solar projects over 500kW should also help replenish the province’s pipeline of larger projects that had been declining in recent years, Barker added.

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