Much like the California Gold Rush in 1848, the introduction of Ontario’s renewable energy Feed-In Tariff (FIT) program last October has prompted an all out race for renewable energy companies of all sizes to secure commercial rooftops across the Canadian province.
Through what is being regarded as the strongest Feed-in Tariff program in the world, the Ontario government has committed to paying up to 80.2 cents per kilowatt hour for electricity generated by solar rooftop systems for a guaranteed contracted period of 20 years. This is a staggering number when you consider that the Canadian government sells the same electricity back to the end user for as little as .05 cents per kilowatt hour.
Hotels, schools, manufacturing plants, shopping malls, office buildings and even hospitals are now prime locations for renewable energy installations. Boasting thousands of flat roofs across Ontario, all of these businesses have the opportunity to harness the sun’s rays, converting them into emission-free electricity.
In a province prepared to pay generously for solar power, it’s no surprise that the race is on to lock up leases on prime rooftop real estate across Ontario and the Greater Toronto Area.
One American company in particular seems to be leading this rooftop race in Ontario.
Rather than going from door to door, Atlantic Wind and Solar Inc. (OTC:AWSL) has taken a different approach to securing lease agreements through strategic alliances with commercial real estate giants Cushman & Wakefield and Remington Group.
AWSL is approaching commercial property owners with an offer that is almost impossible to refuse: Give us your roof for 20 years and we’ll give you 20 years of rent up front.
If the property owner doesn’t have the $2 million investment to purchase the solar rooftop system, AWSL offers the option of a 20 year, 50/50 joint venture partnership. With this secured access, the company will design, build and own 50 percent of the rooftop solar system and take on 50 percent of the cost. AWSL takes care of connecting the system to the grid as part of the Ontario Power Authority’s (OPA) Feed-in Tariff program, which pays an average of 71.3 cents per kilowatt hour for a large commercial system.
“At the end of the term the equipment, most of which is guaranteed for 40 years, is transitioned to the building owner,” said Brent O’Connor, Investor Relations Director for Atlantic Wind and Solar. “That way the owner can benefit from electricity production beyond the 20 year contract.”
There are always alternative methods of compensation however, companies like CarbonFree Technology of Toronto offers a guarantee to supply solar-sourced electricity over two decades for less than what a building owner currently pays. No matter what the price, building owners seem to have nothing to lose by installing a rooftop solar system while the FIT benefits are still so abundant. The market is becoming increasingly crowded, Canadian Solar, Greta Energy, Ozz Solar, Helios Energy, Rumble Energy and SunOne Energy Canada are all among a growing list of solar rooftop aggregators knocking on Ontario doors and joining in the race for rooftops.
O’Connor predicts that 90 percent of these new solar companies will begin disappearing and that a few of the established and well financed companies like AWSL will assume leadership of the market. He predicts this thinning out process will begin within the next six to eight months.
Rooftops must also be inspected to ensure they are strong enough to handle the weight of both the panels and winter snow. AWSL builds the support of its system into the building structure, opposed to resting all of the weight on the rooftop membrane.
“Some solar companies are looking to get in and out quick and will likely leave building owners with a lot of problems including leaky roofs and equipment that doesn’t work,” said O’Connor.
“It’s important for property owners to do their homework before entering any long-term leasing contract,” said Ben Chin, spokesman for the Ontario Power Authority.
The California Gold Rush made millionaires of those who were strategic enough to capitalize on the opportunity before it ended. In the same sense, Ontario’s aggressive FIT program will expectantly catapult the strategic and well-prepared renewable energy companies into green giants, virtually overnight.