Sun Edison announced today a partnership with the electronic manufacturing facility Flextronics to begin construction on solar photovoltaic (PV) panels in Ontario, Canada. A specific aim is to help the region fulfill product demand for its new feed-in tariff program (FIT) — the first such electricity pricing structure in North America. A FIT ensures that an owner receives a premium for the clean energy they generate.

As a result of the partnership, 100 new solar manufacturing jobs will be created in Newmarket, Ontario, where workers will begin making the panels in the first quarter of the 2011 fiscal year. And with the globally recognized Sun Edison investing in a long term plan in Ontario, people in the region can expect the number of available clean energy jobs in the region to rise over the next few years.

Both companies expect a continued increase in solar installations in Ontario because of the tariff program — SunEdison, for instance, foresees another 50 megawatts (MW) of added annual solar panel capacity. That figure could grow to as high as 200 megawatts.

According to Fox News 44, the partnership will allow Sun Edison to exceed the 60 percent Canada-made equipment requirement for the FIT. Vice President and Country Manager of Sun Edison Jason Gray discussed why the company chose to be a part of Ontario’s new program:

“We are partnering with Flextronics, the Town of Newmarket and the Region of York because of their clear dedication to sustainability. We are committed to creating green jobs and building a green economy for Ontario.”

Singapore-based Flextronics, for its part, provides design, engineering and manufacturing services to the automotive, computer and medical sectors. Most recently, Flextronics has developed a high-density, high efficiency cell phone charger that, according to the company, could help 5.6 billion phone users worldwide save enough energy to light up the Las Vegas strip for an entire year.

A number of places in the U.S. have tinkered with FIT pilot programs, like Gainesville, Florida, Hawaii, parts of Oregon and Vermont. The success (or failure) of these programs will likely impact the viability future FIT initiatives, so we’ll be sure to keep a close eye them.

Related: see this recent report suggesting that the net impact of Ontario’s feed in tariff — which does pass along added costs to utility customers — is equivalent to less than the cost of one donut per month, per customer. In exchange for paying those added costs, Clear Sky Advisors suggests Ontario residents will see 70,000 new solar-related jobs created over the next five years.

Hawaii’s plans for a feed-in tariff — which have been in the works for quite some time — are one step closer to being realized, thanks to a decision Wednesday by the Hawaii Public Utilities Commission (HPUC). The decision is part of a broad push in Hawaii to get 40 percent of the state’s electricity from renewable resources by 2030.

According to the regulator’s ruling, homeowners and commercial property owners who install solar panels in Hawaii will get paid for any excess electricity they generate. Those who sign up and participate in the program will get paid 21.8 cents for each kilowatt hour (kWh) that is fed back into the electric grid. Since the going rate for residential electricity is higher on many parts of the islands, the feed-in tariff will really be best suited to homeowners — and businesses — that have solar energy systems that produce more electricity than they use on an annual basis.

As Scott Seu, VP for energy resources at Hawaiian Electric, told Bloomberg News, “[t]his [feed-in tariff] is an option for people who generate more energy than they use. It’s for anybody who has a fair amount of open space that’s not being used.”

Under Hawaii’s net-metering rules, homeowners and businesses must be credited monthly at the retail rate for any excess electricity generated by their solar panels. This means that if you live on Oahu and pay HECO 25 cent per kWh, HECO is required to issue monthly credit for any excess solar electricity at 25 cents. Seems fair enough. The catch? At the end of the 12-month billing cycle, any excess credit is automatically granted (without compensation) to the utility, like HECO, MECO or HELCO.

The feed-in tariff program rectifies this issue by ensuring that owners of solar photovoltaic (PV) systems receive compensation for any over-production on annual basis. Also, unlike net-metering, which provides credit on ensuing electric bills, a feed-in tariff approach provides a cash payment.

Once in place, Hawaii’s feed-in tariff is also expected to streamline solar project development and financing. The approved program includes provisions for set pricing, terms and conditions, standard form of contract and clarified interconnection procedures — all of which, it’s expected, will help make it easier to propose, close and complete solar installations.

As it stands, HPUC has approved the feed-in tariff for solar PV installations up to 500 kilowatts (kW) in size. Next up will be a similar ruling for systems between 500 kW and 5 megawatts (MW).

Hawaii — the most fossil-fuel dependent state in the country and also, not surprisingly, home to the country’s highest electricity rates — has adopted a strong mandate to develop homegrown electricity-generating assets.

You can read more about HPUC’s ruling in its press release (PDF).

Solar energy advocates at Solar Power International (SPI) this week are likely to promote the creation of a feed-in tariff program as an effective way for California — and other states — to generate more solar energy.

In a feed-in tariff model, homeowners and business owners with solar energy systems are able to sell their clean energy back to local utility companies at a long-term, premium rate. That, say advocates of the California plan — like Mayor Pro Tem Jim Ferguson of Palm Desert — would create a clear incentive for more individuals in California to install solar panels. The main draw? Steady income from feed-in tariff payments shortens payback periods and the boost return on investment on a given solar energy system. Armed with stronger financial projections, homeowners and developers alike are better able to finance — and complete — their solar power projects.

Feed-in tariffs have successfully boosted demand for solar power in a number of places — some that are down right dark and cloudy compared to California. Ferguson’s Palm Desert community, for instance, gets twice as much annual sunlight as Germany, a solar energy powerhouse that, as noted by the L.A. Times, pumps out four times as much solar power as the entire United States. This surge in solar energy generation is widely attributed to Germany’s national feed-in tariff program.

Feed-in tariffs do not come without their challenges, however. Utility companies invariably note that, if forced to pay out an above-retail rate for solar energy generation, they’d likely have to raise rates — an unpopular move, even if we’re talking fractions of a penny per kilowatt hour. Then there are other issues, like how to fairly determine the feed-in tariff rate and delegate oversight of the program.

In California — and at SPI — much of the debate is centering on something called a reverse auction mechanism. Slightly different from a classic feed-in-tariff program, an auction-based approach does not mandate a price that utility companies must pay. Instead, there is be a bidding process in which utilities contract to buy energy from those who offer the best rates. The program would apply only to mid-size systems on warehouse roofs and closed landfills.

We’ll keep you updated as the discussion progresses. The bottom line is that a feed-in tariff program in California would provide a clear boost to solar energy projects across the state.

Pointing out that three quarters of the world’s renewable energy was installed with support from a feed in tariff (FIT), Paul Newman of the Arizona Corporation Commission explained that Arizona “is pushing the possibility of a FIT to get some renewable infrastructure in the ground.”

Unlike up front rebates based on the size of a system someone installs, an FIT would reimburse renewable energy producers based on the amount of electricity they actually generate. From a financial standpoint, it is considered a strong policy because FITs incentivize production instead of simply installation. Practically speaking, FITs can be hard to enact, however. Paying renewable energy producers on a per kWh basis means the cost often trickles down to ratepayers. Commissioner Bob Stump qualified the proposal by explaining, “there would have to be parameters on the size and cost, and have a cap (on the money available).”

Will this be politically feasible? Maybe, but it’s not a sure thing. Germany FIT has been famously successful, but the approach is relatively new to the US market. Oregon’s pilot FIT just started this summer, to much fanfare and popularity, and other U.S. jurisdictions have tinkered with the idea.

If you’re interested to learn more, the National Renewable Energy Lab has a full report on FITs from a policy perspective. Also, for more in-depth discussion on what’s going on in California and at the federal level, see Ed Gunther’s piece, “U.S. Photovoltaic FiTs and Starts.”

On balance, FITs create strong demand for solar — which would be good for states like Arizona, which is actively promoting itself as a hub for solar energy manufacturers. While nothing is guaranteed, we’re happy to see that Arizona leaders are discussing the possibility of creating a feed in tariff.

Travel north of the U.S. border to the Canadian province of Ontario and you’ll run into a thriving solar energy industry. You’ll also find the work of Atlantic Wind and Solar (AWSL), a renewable energy company that has made considerable headway with solar installations and technology development across the province. Through the Ontario government’s Feed-In Tariff Program (FIT) and a relationship with the Ontario Power Authority, AWSL has become a leading solar installer in the Canadian province.

AWSL has been particularly busy over the last month. On June 2, the company announced a deal with an Ontario realty company in which AWSL will install a 250-kilowatt (kW) rooftop photovoltaic (PV) system atop a 45,000-square-foot commercial building in Brampton, Ontario, just west of Toronto. Six days later, AWSL announced a second deal to install another 250-kW rooftop solar energy system for a Toronto-area manufacturing company.

And just two days ago AWSL was at it again. The company announced its third deal of the month on Tuesday: an agreement with an Ontario real estate developer to design and install four more rooftop PV projects with a combined capacity of roughly 492 kilowatts. According to Marketwire, the electricity generated by these latest installations will be sold into the Ontario Power Authority’s grid for the next 20 years at a rate of 71.3 cents per kilowatt-hour (kWh).

The Ontario Feed-In Tariff Program was put into law as part of the Green Energy and Green Economy Act of 2009 and is being implemented by the OPA. The goal of the program is to help Ontario completely eliminate the use of coal-powered electricity by 2014. To that end, the FIT Program offers stable prices and long-term contracts for energy generated from biomass, biogas, landfill gas, on-shore and off-shore wind, solar photovoltaics and waterpower.

A little over a year ago, we reported that Oregon lawmakers were developing a pilot feed-in tariff program, following the passage of House Bill 3039. Now, countless meetings later, the Oregon Public Utilities Commission (PUC) has finally issued rules on the new initiative. Assuming you don’t want to read the hundred or so pages of background and draft rules, we’ve set out to provide a quick overview of the most pressing questions.

What is a feed-in tariff? A feed-in tariff ensures that you get paid for all the electricity generated by your solar panels. Under Oregon’s feed-in tariff, homeowners could receive payments as high as 65 cents per kilowatt-hour (kWh) for up to 15 years. Considering that the average retail price for residential power in Oregon is around a dime per kWh, the new program promises to offer strong incentive to install solar panels.

Who can take part? Residential and commercial customers of Portland General Electric (PGE), PacifiCorp and Idaho Power, utilities that together serve about three-quarters of Oregon’s population.

For how much can I sell my solar power? It depends on your region, the size of your system and whether you’re a homeowner or a business owner. The PUC has set up four regions, across which the rate ranges between $0.55/kWh to $0.65/kWh. See this great outline from SunPluggers for full details.

Can I still take advantage of other solar incentive programs? Yes and no. If accepted into the program, you’ll still be eligible to take the 30-percent federal solar tax credit. It seems you won’t, however, be permitted to take the state tax credit, Oregon solar rebates or other incentives available through Energy Trust of Oregon.

How is it funded? Ultimately, ratepayers. Electricity generated by solar energy systems is still more expensive that power that comes from conventional sources, like coal, natural gas and, particularly relevant to Oregon, hydroelectric dams. Since a feed-in tariff establishes an above-market rate for electrons that come from solar panels, that extra money has to come from somewhere. In practice, a utility will raise electricity rates across its service territory — usually to the tune of a couple of pennies per customer, per month. This does not, by any measure, represent a big increase for any one customer. But those pennies can add up to hundreds of millions of dollars. And the approach, which is essentially a redistribution of resources, can be controversial. This is one of the considerations that led Oregon to limit the feed-in tariff pilot to four years, as PUC official Ray Baum noted in a news release: “We are trying to strike a balance between providing an incentive while keeping an eye on controlling utility costs.”

How many Oregonians can participate? The total pilot program is capped at 25 megawatts of solar electricity generation capacity. Assuming an average home system size of five kilowatts, 5,000 households could participate (5,000 watts x 5,000 households = 25,000,000 watts, or 25 megawatts). In practice, owners of larger systems — both residential and commercial — are likely to sign up, which means the total number of participants will probably be fewer than five thousand.

When does it start? Systems installed after July, 2010 will be eligible.

How do I sign up? It’s not yet clear. As we always say, our network of qualified solar installation firms is the best source of information on solar rebate, rules and regulations. Stay tuned to the PUC website and feel free to post questions or suggestions here.

In the interests of information-sharing, we just wanted to alert you to the National Renewable Energy Lab’s (NREL) newly released report on feed in tariffs. It will make your knees weak if you’re a policy wonk or an energy lawyer–I mean heck, it’s entitled “Renewable Energy Prices in State-Level Feed-in Tariffs: Federal Law Constraints and Possible Solutions”–but it includes an overview for the FiT neophyte, as well. Don’t read the whole thing, unless you’re really, really having trouble sleeping, but do check out some basic definitions and context for the FiT programs developing across the country.

The feed in tariff is a production-based approach to solar energy incentives that until recently has been almost the exclusive property of European solar markets. But FiTs are gaining traction on home soil: California, Hawaii, Florida (just Gainesville–but still), and other American markets are dipping in. If you’re following solar power growth in the United States, the inner workings of a FiT is no longer optional.

Access the full report here as a PDF on NREL’s website.

Unless some massive prank is being played on the solar industry, April 1st will kick off enormous changes in Europe (though solar stocks have already begun to react): Germany’s feed in tariff will scale back by 16-17 percent, while the United Kingdom will enact a FiT for the first time.

Germany’s FiT rate for rooftop and “free field” systems will be reduced 15 percent, while payments for solar panel installations on farmland or otherwise more valuable land will be reduced 25 percent (according to PV Magazine and PV Tech). Rates will also scale back further as new solar capacity goals are met (from the current 3 gigawatts per year to 3.5, then to 4.5).

In the United Kingdom, meanwhile, solar PV systems of all sizes–including home solar installations–will be eligible for generous FiT payments whose levels have been set for the next three years. The Department for Energy and Climate Change (DECC) said today that the”UK currently gets around 5.5% of electricity from renewable sources and that will need to increase to around 30% to meet the 15% 2020 [RPS] target” (DECC).

Just how incentivizing are these incentives? The British FiT is calculated to offer a return on investment of 5-8 percent across sectors. This has left some analysts a little cool on the plan, who think more attractive returns would encourage better participation in the program–and thus, higher levels of installed renewable generation capacity.

Still, owners of solar electric systems won’t be complaining. Systems that generate up to 5 MW will even be compensated for any energy consumed on site, and extra for what they may feed back into the grid. The DECC predicts that the typical homeowner could earn £900 in addition to a £140 yearly electric bill reduction, all from a 2.5 kw solar panel array. And a nice touch for forward-thinkers of the last year: systems commissioned since July 2008 (when this program was first announced) are eligible.

First-year rates for PV run from 29.3-41.3 pence/kWh.

As we’ve noted on this blog before, the apt phrase for the renewable energy industries is not, “If you build it, they will come,” but rather, “If you subsidize it, they will build it.” Such is the case of Ontario, Canada, which is seeing a boom in solar energy-related activity since putting in place a feed-in tariff (FIT) program earlier this year.

SunEdison, a large solar power services provider headquartered in Beltsville, MD, recently announced it expects to more than double its Canadian workforce in 2010.

“We are excited to be ramping up to meet the opportunities the FIT program in Ontario offers and to continue work on our established RESOP projects,” said Jason Gray, director of Canadian operations for SunEdison. “As a solar company committed to the Ontario market, we will establish local supply agreements and the necessary operations and maintenance teams to build out our pipeline. Moreover, we will commit financial resources to local developers through project partnerships.”

SunEdison, which was last month formally acquired by MEMC Electronic Materials, Inc., is no stranger to the Ontario market: they own and operate First Light, Canada’s first solar PV energy park. Located in Stone Mills, Ontario, First Light is a 9.1-megawatt project.

UPDATE: SunEdison isn’t the only firm to join Ontario’s solar power party. See this post, which explains that Canadian Solar (a Chinese-held company) will actually make some of its products in Canada.

Judging from the overwhelming response received by the state’s new clean energy subsidy program, it would appear that Vermonters have struck gold — renewable energy resources, that is, the kind that power solar panels and turn wind turbine blades.

This past May, the Vermont legislature passed the Vermont Energy Act of 2009, which, among other things, requires utilities to buy the electricity generated by eligible renewable energy systems — like solar PV panels. (See this post, for more details.)

As reported by Vermont Public Radio, the program opened this week and was promptly overwhelmed by over 200 applications, representing a total of 172 megawatts (mWs) of new renewable energy capacity. As a point of reference, New Jersey recently announced that, statewide, 100 mWs of solar PV capacity has been installed to date. Granted, Vermont’s 172 mW figure includes project proposals for biomass, wind and methane-capture technologies. But, even so, it represents an impressive number of renewable energy projects — especially considering that the program just started accepting applications on Monday.

See more from VPR host John Dillon:

(Seddon) “It was a huge surprise.”

(Dillon) Leigh Seddon is vice president for Alteris Renewables, a company that works with solar energy developers.

(Seddon) “We were thinking that perhaps more than 12.5 megawatts would be applied for the first day, but nowhere near 172 megawatts.”

(Dillon) Andrew Perchlik is director of Renewable Energy Vermont, which lobbied for the new law. He says Vermont’s program has drawn national attention.

(Perchlik) “Since Vermont was the first state to really enact this on a statewide basis, we’re going to see pent-up demand that was around the whole country come to Vermont.”

(Dillon) The state Public Service Board set a rate of 30 cents a kilowatt hour for solar projects. Lower rates were established for small scale wind, hydroelectric, biomass and methane generation. The rates are called “feed in” tariffs because they are designed to get new projects quickly into the pipeline.

For more details on Vermont’s feed-in tariff program — which is officially called the Vermont Standard Offer for Qualifying Sustainably Priced Energy Enterprise Development (SPEED) Resources Program — see the VT Public Service Board website.