Solar series, part III: Debate over agricultural land for solar energy heats up, cools down

solar part 3

It would seem that, as a result of media coverage, counties discussions, presentations to council members across the region, and the regular arrival of new projects, the term 'solar energy' has entered the vocabulary of Eastern Ontario and is now here to stay.

In that respect, the year 2009 may be looked back upon as a milestone for solar energy development in the region, for it witnessed the arrival of large-scale development on agricultural land and, in the process, set off a tumultuous discussion over its belonging - one that led to significant changes in the provincial Green Energy Act.

Last February, in East Hawkesbury, local support was growing steadily for a group of St-Eugene farmers rallying against an Ottawa-based solar development company. The 11 farmers - backed by the Ontario Federation of Agriculture (OFA) - had taken issue with a slated 300-acre solar panel project as it was being planned on "prime farmland," something the group considered scarce, and due to concerns over stray voltage.

While the group argued the project could be built on a rooftop, or on more marginal land, the firm behind the project, Solaris Energy Partners - who later sold it to Enfinity Canada - countered that the farmland it had purchased for the project was certified class 3, and that they would allow sheep to graze on the site.

As interest grew in the case across the province, the OFA added its voice to the debate, saying solar development had its place - but only on class 5, 6, and 7 farmlands.

"Ontario farmers have access to only 13 per cent of the private land in Ontario for production of food, fiber, and we don't want to lose any of that to the installation of solar panels," OFA vice-president Don McCabe wrote in a press release.

The East Hawkesbury debate eventually came to a close after an Ontario Municipal Board hearing last June ruled indefinitely on the development's future, allowing it to go ahead with some modifications. Visual barriers, such as hedgerows and berms, were to be installed while livestock would not be permitted to graze on the site.

Although noting they were pleased with the modifications, the St-Eugene residents released a statement saying the ruling was not a settlement: "Solaris did not have to build on prime farmland. They chose to. Through allowing the land severance to proceed, without notifying residents, the United Counties of Prescott Russell has opened the door for more of these power plants to come and set up shop."

Since that time, a handful of other sizeable solar projects have indeed been announced or completed in Eastern Ontario. However, the East Hawkesbury case was influential in sparking significant revisions to the Green Energy Act, the provincial bill that sets the guidelines and price schedule for renewable energy in Ontario.

Following these revisions, which apply to all renewable energy projects approved after October 1, 2009, the Green Energy Act now specifies that large-scale solar projects are not permitted on class 1 and 2 farmlands and are limited on class 3 farmland.

Under the new Feed-in-Tariff (FIT) rules, the government directed the Ontario Power Authority to prohibit ground-mounted solar development above 100 kilowatts on class 1 and 2 lands and speciality crop areas, while projects of up to 500 megawatts would be permitted on class 3 designations. The East Hawkesbury project was approved under the original Renewable Energy Standard Offer Program (RESOP).

"These restrictions may preclude development in some of Ontario's sunniest locations," the Ontario government wrote in the accompanying press release.

Premier Dalton McGuinty was soon quoted as saying, "We're going to do a much better job of harnessing energy from the sun and biomass (and) at the same time not compromise quality of life or the environment and not compromise our access to good farmland as well."

Elizabeth McDonald, president of the Canadian Solar Industries Association, countered, "All we've said we need is 0.11 per cent of the agricultural land in Ontario [about 20,000 acres], and much of this land isn't being used right now (for farming)."

McDonald also said that solar industry developers are not asking the government to allow development in the protected Greenbelt land.

Jon Kieran, director of solar development at EDF EN Canada - the company responsible for solar projects in Fournier and West Carleton - said the farmers and residents his company has discussed the issue with have been "extremely favourable" to the idea of solar energy on farmland. In fact, he added, farmers with class 1 and 2 lands have expressed their disappointment to the company in light of the government ruling, as they no longer have the option to lease their lands for profit.

"The issue of using agricultural land for solar projects is informed by the following three observations," wrote Kieran, in an e-mail last month. "All the Class 1/2/3 land used for all RESOP projects in Ontario (e.g. 525 megawatts) - should they ever all be built - would represent one-tenth of one per cent of available lands in Ontario; solar projects typically lease land, which means the land will be returned to farming (in a more nutritional state) at the expiration of incentive programs; and most Ontario farmers tell us they wish to protect their entitlement to develop their private property as they best see fit."

Kieran elaborated further during a phone conversation: "There's been a lot of concern expressed [over the use of agricultural land] but I want to be very clear - the concern is from the farming community, that (the government) has moved too quickly to remove opportunities for family farms to participate in the program.

"It's an example of a position that was taken that did not include a representation, resulting in a policy that does more than disadvantage the family farm; now, there is no option to diversify income, by leasing land, and I can be clear that the farmers that we have worked with have [appreciated] the idea, to rotate and improve the quality of the land while we grow solar and (eventually) return the land. It is disappointing to us and the farmers involved."

Robin Hutcheson, press liaison for Solaris Energy Partners, told The Review last December that events surrounding the East Hawkesbury project were "the worst scenario for public opposition" in his experience and had "gone on long enough." The latter comment referred to an old farmhouse that was vandalized at the project site in October.

In any case, it seems the debate surrounding the East Hawkesbury case was not only instrumental in determining the outcome of solar energy development in the province, but that it is also a debate not likely to be reopened in the near future.

Asked about his interpretation of public opinion surrounding the West Carleton solar development, 60 kilometres west of Ottawa, journalist Derek Dunn said the local population was generally pleased with the landowner's success and that the only opponent was a neighbour - who simply confided that he would have also liked to sign a deal with the solar company.

"My overall impression has been that people in this area are interested in the science," said Dunn, who writes for the Arnprior Chronicle-Guide. "Most of the questions, whenever I talked to people at open houses, were 'How much money can be made off it?' The political stuff hasn't come up at all."

"I don't know why solar hasn't been that big of a deal."

Friday, March 5, 2010

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Debate heats up, cools down --- and the economics still sucks

http://network.nationalpost.com/NP/blogs/fullcomment/archive/2010/03/10/... Despite bubbles, governments keep pumping air into alternative energy By Terence Corcoran That eerie hissing you hear may well be the air beginning to seep out of the green energy bubble. The sound is similar to the pfffffft and sshhhhsssssp noises we heard in the early days of the dot.com bubble collapse or the subprime mortgage meltdown. If you can’t hear it, you are not alone. While investment analysts are telling their clients to get out of solar power firms and warning about the continuing risks in wind and bioenergy schemes, Ottawa and the provinces are on a mad populist stampede to throw billions of dollars at the green energy monster. The politicians don’t seem to be keeping up with the trends. “Don’t try to catch a falling knife,” warned J.P. Morgan this week in a report that told investors the market continues to fall out of the solar panel module market. It downgraded a bunch of solar companies that have already been in a tailspin since the fist signs of a solar crash back in 2008. Other alternative energy sectors are hitting walls. Jurisdictions with wind power regimes face continuing issues related to the fact that the wind often doesn’t blow much, turning investments in wind farms into cash-draining albatrosses. In Ontario, the 1,100 megawatts of built wind turbine capacity are often running a few megawatts at a time, and even on the best of days have trouble producing 150 megawatts. Despite the fundamental lack of economic justification for alternative energy, governments keep pumping air into the bubbles. They blew a small fortune on ethanol programs that didn’t quite work out, so now they’re betting vast sums on aggressive campaigns to create green industries using some of the most regressive interventionist methods known to economics. Subsidies, trade protectionism, market-distorting prices, back-door tax hikes, carbon taxes, massive regulation, big secret deals with rent seeking corporations, cross subsidies from one industry to another — no policy option is too crazy for green energy. The Liberal government of Ontario Premier Dalton McGuinty has already billed itself as possibly the greenest energy jurisdiction in the world, a claim that seems plausible given the IMAX scale of its economy-distorting Green Energy Act. Ontario’s main claim to power fame is a “feed-in-tariff” scheme under which the province will force power into the market at subsidized rates. Under the act, power distributors are obliged to pay 44 ¢ a kilowatt hour for solar power, 13.5¢ for wind power and up to 80¢ for solar power delivered from rooftop systems. Loblaw, the grocery store chain, yesterday become one of the first companies to agree to accept the 80¢ subsidy for power from solar panels installed on the roofs of its stores. The cost of that 80¢ power will be borne by all electricity consumers in higher rates. And now B.C. Premier Gordon Campbell is reportedly angling to topple Ontario for the greenest-of-them-all title. “There is not a jurisdiction that won’t try to win the clean energy race,” said Mr. Campbell. He promises to fast track alternative energy projects. The province’s B.C. Hydro monopoly is expected to announce new energy purchase agreements sometime this month. One of them is with a group headed by GE Energy Financial Services to revive the controversial Upper Toba Valley Hydroelectric Project. That project remains shrouded in financial mystery. While British Columbia’s purchase-agreements are not quite feed-in-tariff structures, the economic reality is that green energy tends to cost more and the higher costs will be borne by all consumers. None of these technologies — solar, wind, bioenergy — are economical on their own in competition with natural gas or coal — or even nuclear. At 80¢ a kilowatt hour, Ontario could theoretically be better off building a dozen new nuclear plants. Needless to say, all this is being driven by the fantasy of reducing and even eliminating carbon emissions so as to save the planet from global warming. Leaving aside the growing probability that global warming science will prove to have been a false alarm, little or no work has been done on whether any of the alternative energy spending will reduce carbon emissions. Ontario has yet to produce any evidence that its massive feed-in-tariff regime will appreciably reduce carbon emissions, even though consumers will pay billions of dollars more for electricity in years to come. Internationally, the alt-energy movement has taken on bubble qualities. The solar report by J.P. Morgan documents the rise and fall of a half dozen companies that are now trading at a fraction of their market highs (see two examples below). Solar panel prices plunged last year and appear to be heading lower still this year. Stock prices, already battered, could go lower. “We believe significant downside risk remains even from these levels and continue to be wary.” Making money in solar is still a problem. ENER has annual revenue of $367-million, but lost $1.54 a share. Evergreen lost $21-million on $74-million in revenue The dot.comish quality of the solar industry is obvious. Even worse from an economic perspective are the perverse government policies driving the market. Ontario insists on local content in solar and wind equipment, thus guaranteeing rate payers will pay high prices for equipment that is available on the open market at deep discounts. Even more perverse economically is that the subsidies for alternative energy come on top of other carbon-reducing programs. Programs such as carbon taxes in British Columbia and smart meters in Ontario compound the cost burden on consumers. If cap and trade were to be thrown on top of the green energy programs and existing taxes, the irrationality of the green energy system would become even greater. Maybe the hissing sound of deflating bubbles will eventually shake up the politicians and consumers. The worst is yet to come. Read more: http://network.nationalpost.com/NP/blogs/fullcomment/archive/2010/03/10/... The National Post is now on Facebook. Join our fan community today.