ontario fit domestic content
TRANSCRIPT
Ontario FIT Domestic Content
EUCI Ontario’s Feed in Tariff 2.0
July 19, 2012Alex Tsopelas – ORTECH Power
Why Domestic Content (DC)?
• The Green Energy and Green Economy Act provides incentive for renewables in Ontario
• In return the Government of Ontario requires developers to commit to including DC
• The purpose is to create green technology jobs in Ontario
• Manufacturing, professional services, construction and O&M
DC Requirements• What’s changed in FIT 2.0? –
Nothing at all• What are the requirements?
– 50% for wind projects– 60% for solar projects
• How do you meet the percentages?– Exhibit D in the FIT contract– Matrix of “Designated Activities”
rather than costs
DC Matrix
Can It Be Done?
• Yes it can• Manufacturers, suppliers and
contractors have stepped up and are offering solutions that will likely meet the requirements
What do the Plans Look Like?
• Solar– Activity 1 and 5 through 9 = 61%– Activity 4 through 8 = 61%
• Wind– Turbine OEM = 30%
• Combination of Activities 1 through 15
– Activities 17 and 18 = 20%
Managing DC Risk
• Many developers are downloading risk to manufacturers and contractors
• Ultimately the project owner is on the hook
• Requires appropriate contractual penalties and significant oversight
What about “Certified” Products?
• The OPA does not recognize any certification body for Domestic Content
• May be useful in providing comfort to the developer or investor as a starting point
• Don’t limit yourself to any type of “certified” products or services
When Should Planning Start?
• Day 1• Starting with commitments &
documentation from consultants– You need to be confident that
individuals working on your project are living in Ontario
• This should be the first question you ask a supplier of equipment or services
Areas of Uncertainty• Construction Costs
– 95% of labour hours– What about specialty equipment or
materials?
• Grid Connection– Is it only the transformer that is
required to be from Ontario or other equipment as well?
• Missing the Mark– What happens if an audit reveals a
shortfall?
DC Report Requirements
• Often underestimated by developers
• More detail is better• Will need timesheets and proof
of residence for labour• Serial number part tracking
through the entire manufacturing process
• Invoices and proof of purchase from Ontario Suppliers
Recommendations• Understand the Requirements and
Implications– Legal counsel and consultants can
help• Start Planning Early
– Communicate early and often with the OPA and contractors
– Vet consultants, suppliers and contractors’ understanding and ability to meet the requirements first
Recommendations• Be Prepared
– Assume you WILL be audited and keep records accordingly
– Maintain your own records and get all documentation as soon as possible
– Don’t rely on your suppliers to make the information available down the road
• DC Risk Can Be Managed
