ontariofit

Ontario’s photovoltaic market is expected to reach cumulative installations of 2,650 MW by 2015, according to a new report by ClearSky Advisors. The foremost concerns of market participants are political and regulatory uncertainty, the report said.

The capacity projection includes demand from the province's Feed in Tariff program, the Renewable Energy Standard Offer Program and the "Samsung agreement." In 2011, 455 MW of new PV installations are expected to be added. Delays during the permitting process will push most FIT utility-scale demand back into 2012 to 2013. An increasing number of suppliers, reduced global costs and delayed demand have combined to drive expected module prices down in Ontario. By the second half of 2011, module supply constraints will be eliminated, the report said.

With around 2,450 MW of existing solar contracts, Ontario’s PV market will "experience strong growth from 2011-2012," the report said. After 2013, the market will "shrink significantly in response to ratepayer concerns, transmission constraints and the limited size of Ontario’s electricity market."

Domestic content requirements restrict the amount of equipment that is available to developers in Ontario. Though there has been concern that development would be limited by supply shortages, it is now most likely sufficient supply will be available to meet demand from 2011 to 2015. Of the more than 30 module manufacturers ClearSky Advisors has been tracking, 17 to 24 are likely to produce DCR-compliant modules in 2011. Increasing volumes of module supply continue to become available.

Delayed utility-scale development will enable module supply to exceed demand by the third quarter of 2011. Large inverter manufacturers with flexible capacity will be able to fully serve Ontario’s FIT market from 2011-2015.

The report said the foremost concerns of Ontario PV market participants are political and regulatory uncertainty due to three main factors: continual changes and delays in Ontario’s FIT program,a FIT program review scheduled for 2011 and a provincial election slated for the fall of 2011.

"All of this uncertainty has combined to make Ontario a challenging market in which to operate," the report said. Long-term planning is "exceedingly difficult" for any business participating in Ontario’s FIT program. A number of manufacturers have delayed investment in the province either by entering the market cautiously and waiting for more stability before expanding or by avoiding the market altogether. "Uncertainty means risk," the report said. "This has made project financing more expensive and harder to come by."

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