Excellent analysis of Ontario’s renewable FIT program

The well-respected Washington DC based Institute for Local Self-Reliance has just published an excellent review of Ontario’s green energy feed-in tariff program. The detailed report explains the history of the program and how it works. It also analyses the strengths and weaknesses of the FIT program in the context of its objective to build a green energy industry and create jobs in a province that is suffering through a current serious decline in manufacturing industries.

The conclusions of the report include:

  • Ontario’s feed-in tariff policy provides a robust regime for encouraging renewable electricity generation while maximizing the local economic benefits of this new power generation.
  • The domestic content provision ensures that projects will have significantly higher local value-added than would otherwise happen, encouraging more renewable energy industries to locate and hire in Ontario.
  • The community project price adders will also increase the jobs and economic impact of the renewable energy industry, by encouraging the development of projects that provide more jobs and more economic impact per MW than absentee owned projects.
  • The feed-in tariff distributed generation policy makes it easier for small scale projects to get on the grid and contribute to clean energy and economic goals swiftly.
  • The province’s policy seems to be an effective job strategy, with a cost per job comparable or lower than seen in American job subsidy programs. Ontario is getting both high wage jobs and an abundant supply of clean energy, not just subsidizing job creation.
  • Ontario’s feed-in tariff program is doubly robust, because even in the absence of the domestic content provisions, the local ownership price adders will result in greater than usual economic impact from renewable energy development than with absentee owned projects.
  • Ontario’s FIT Program has brought a surge of jobs and economic development. And given the uncertainty of the international trade dispute (Japan – joined by the United States and European Union – has brought a complaint against the Ontario FIT Program in the World Trade Organization (WTO) arguing that the domestic content provision is an unfair discrimination against overseas-made products), it’s unlikely that development will slow in the foreseeable future.

The full report can be found at http://www.newrules.org/energy/publications/maximizing-jobs-clean-energy-ontario-s-buy-local-policy

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