Ontario has various policies and financial incentives in place to encourage the adoption and growth of solar energy. One of the key policies is the Feed-In Tariff (FIT) Program which was launched in 2009. The FIT Program offers guaranteed prices and contracts for renewable energy systems, including solar PV, that generate electricity for 20 years. The prices offered through the FIT Program aimed to make solar energy economically viable and provided certainty for investors.
In addition to the prices paid for solar electricity, the FIT Program also includes domestic content requirements which mandate that a portion of solar projects must utilize locally sourced solar panels and components. This local content policy helped grow Ontario’s solar manufacturing industries. While the FIT Program is no longer open to new large solar projects, the existing contracts are still honoring the guaranteed prices for the full 20-year terms which continues to incentivize growth in the solar sector.
For small residential and farm-sized solar PV systems under 10 kW, Ontario offers a microFIT Program. The microFIT Program operates similarly to the FIT Program in that it provides 20-year contracts with guaranteed prices for solar electricity exported to the grid. This makes small-scale home and farm solar very financially attractive options. The microFIT Program is still open and continues to sign new small projects.
In addition to these feed-in programs, there are also several provincial rebate programs that lower the upfront costs of installing solar PV systems. The Solar Homes rebate offers a rebate of up to $10,000 off the pre-tax costs of a solar installation for eligible homes. There are also rebates available for installing solar hot water or solar air systems through programs like the Renewable Homes rebate. These rebates serve to make the initial investment in solar substantially more affordable.
At the provincial level, Ontario exempts the full assessed value of solar energy equipment from property taxes for eligible renewable energy generation systems through the Property Tax Assessment for Solar Energy Equipment Regulation. This regulation removes disincentives that might otherwise exist from higher property taxes due to adding solar equipment. The province also eliminated the debt retirement charge and smart meter entity charge from electricity bills for eligible renewable energy projects which further reduces operating costs.
In addition to direct financial supports, the Government of Ontario has enacted legislation and targets to grow the use of renewable energy. The Green Energy Act established renewable energy goals for the province, including phasing out coal-fired generation and mandated that renewable sources contribute a specified percentage of energy use each year. Ontario’s Climate Change Action Plan commits to eliminating all coal-fired generation by 2030 and reducing greenhouse gas emissions by 37% from 1990 levels by 2030 in part by expanding solar and other renewable energy deployment. Building codes are also evolving to promote solar-ready requirements for new construction.
At the municipal level, many Ontario cities and regions have also enacted supplementary policies and incentives to spur additional solar energy adoption. Some municipalities offer property tax incentives for renewable energy. Numerous cities have approved community power programs that enable groups of residents to purchase renewable energy as a bulk purchase. Municipal zoning practices are also helping make it easier to install solar panels on homes and businesses.
Through a combination of long-term electricity purchase guarantees, upfront cost rebates, favorable tax policies and legislation mandating increased renewable energy use – Ontario has put in place a comprehensive policy framework and financial incentives aimed at making solar power cost effective and driving continued growth in the solar energy sector across the province. While some initial incentive programs have wound down, many supports remain in place and Ontario continues to see strong growth in both its small-scale and utility-scale solar industries. The multitude of provincial and municipal programs and policies have played a major role in Ontario becoming a Canadian leader in installed solar capacity.