Getting Your Fair Share of Government Incentives for Renewable Energy

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Solar panels atop the London Public Library in Ontario

Solar panels atop the London Public Library in Ontario.
Dave Chidley / London Public Library

Here’s a tip: When the government offers you money, take it.

Right now, governments around the world are offering their citizens tax breaks, guaranteed income, and even cold hard cash, all in exchange for energy. These are commonly called feed-in tariffs. The idea is simple: You generate clean, renewable energy from your home, small business, or farm, feed it back onto the public grid, and the government will make it worth your while. Why would they do this? While it would be nice if the reason was purely altruistic, the fact is governments are under the gun.

Under agreements like the Kyoto Protocol and the proposed Copenhagen Accord, governments have committed to reducing greenhouse gas emissions. To do this they need to increase efficiencies in areas like transportation and home heating, while reducing their dependence on fossil fuels like coal and petroleum. The latter means finding alternatives, the most likely candidates being solar, wind, geothermal, hydro, and biofuel.

Additionally, rewarding successful renewable energy projects encourages continued and future renewable energy research and development, which leads to more jobs, which leads to a stronger economy. Given the recent economic upheaval, job creation that doesn’t depend on just dumping cash on large corporations is a good thing. Of course, large scale implementations of these alternatives require substantial investment in materials, labor, and real estate. Small scale implementations, while offering less payback, also require less investment. Yet, every little bit helps.

Consider a few examples of the incentives available in Canada.

The Canadian province of Prince Edward Island provides a Provincial Sales Tax exemption on small-scale renewable energy equipment. After you’ve purchased your equipment, you claim a refund of your sales tax by filling out a form and mailing it to the government along with your receipts.

The province of Alberta provides funding for the production of biodiesel, ethanol, or methane, or for the production of electricity from those sources. In this case, the government doesn’t actually buy the fuel but only rewards the producer, typically a farmer, after the fuel has already been sold.

Too Many Options

Unfortunately, governments haven’t made it easy, either to set up a qualifying system or to determine exactly what you can expect to receive. As an example, the Ontario Power Authority’s microFIT program has the potential to deliver great rewards … if you can figure out how to make it work.

First, you must choose and install a system, be it roof-mounted solar panels or a wind turbine. Or perhaps a water power system. Or maybe a biogas or biomass system. It’s up to you to do the research necessary to determine what’s best for your circumstances. Naturally, you have to buy your own equipment, but first make sure it meets Domestic Content requirements. This means that a certain percentage of the equipment you use — from the silicon used in photovoltaic solar panels to the inverter that produces the right output current — must have been manufactured — not just assembled — in Ontario, and you must obtain certificates from your suppliers to prove it.

Your installation must meet all applicable safety standards and municipal building codes, but it’s your responsibility to determine what standards and codes apply, and to purchase any necessary insurance.

Your system must be approved and authorized by the Electrical Safety Authority; again, it’s up to you to obtain that approval.

You must then work with your local electricity distribution company to connect your project to the grid, which may include wiring changes and installing a generation meter. Of course, there are different options for connecting your system: indirectly connected in series, indirectly connected in parallel, directly connected. There are advantages and disadvantages to each, including varying costs. You must decide which is best for you.

Then, and only then, can you enter into a contract with the Ontario Power Authority. Essential paperwork includes project plans, connection requests, inspection reports, domestic content certificates, and contracts. And, of course, you get to pay for all of this.

The microFIT program guarantees a fixed price for the energy you produce, but how much depends on a number of factors. What renewable energy technology are you using? Solar PV gives you the highest rate, but the price for other technologies will escalate annually for the term of the contract. There’s also a difference between peak and off-peak pricing. And don’t forget community price adders and aboriginal price adders.

Get Professional Help

Just sorting through all the options can be a difficult and time-consuming task. If you’re a professional contractor, or even just an experienced handyman, you may be capable of constructing and installing your system yourself. Navigating the labyrinthine bureaucracy that often comes with government programs is another matter. If you have any doubts, consider hiring an experienced contractor who specializes in renewable energy projects. This is probably the safest option, although not necessarily the least expensive.

Where you stand on the climate change debate isn’t a factor. The government has opened it’s wallet. Taking the money isn’t necessarily easy, but it can be worth your while.

Jules Smith is the principal of LightningStrike Studios, a professional communications firm providing web site design and content, corporate documentation, and content marketing. His writing focuses on renewable energy and information technology.

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