A Shelburne-area solar energy system provider is urging prospective clients to wait until next month to pass judgment on the province’s decision to “renege” on its commitment to pay 80.2 cents a kilowatt hour (kwh) for all approved installations.

“Reneged” is the term applied by the Toronto Sun to the McGuinty government’s decision to chop the Ontario Power Authority’s offer of 80.2¢ a kilowatt hour to 58.8¢ per kwh for stand-alone solar panel installations. The cut does not apply to roof-top installations.

The cuts were made after the OPA had received as many as 16,000 applications for the program at the 80.2-cent offer. It couldn’t be determined whether the cuts were because of the large, perhaps unanticipated numbers, or possibly a decision that the 80.2-cent offer had been ill conceived.

Whichever, the word “renege” had been applied as there appears to have been an offer, an acceptance of the offer by 16,000, and a withdrawal of the offer following the acceptance. The effects might be complicated.

Brian Horner of Whitfield Farm-based Land & Sky Green Energy near Shelburne, distributor of German solar systems through Fritz Group of Chetlow, ON, said in a phone interview that the cuts appear to be having a devastating effect on prospective producers of the panels as well as potential stand-alone installations.

“It has had a dramatic effect,” he said. “There’s a loss of confidence by manufacturers who would have moved in (to Ontario). How would you feel about (doing business in Ontario in the face of the government backing off an offer that had been made publicly).”

He acknowledged that the 80.2¢ figure might have been too much. “But the 58.8¢ might be too little.” He said the OPA had never revealed how it had arrived at either figure.

Complicating matters, Mr. Horner said the figure of 16,000 applications is misleading. No one applying had to tender any money. Not all stand-alone (farm fields) were serious, and not all rooftop installations would realistically have qualified, he said.

“You have to have a building permit (to install a rooftop panel).” He said this would often require structural changes. And, if erecting a new structure, you could not include solar in the design. You would have to complete the structure, and then apply for a permit to add solar panels, he said.

Mr. Horner said there was a potential return of 11% on investment at the 80.2¢ rate. According to his calculations, hat would be cut roughly in half, to between 5% and 6% at the 58.8¢.

It is somewhat disturbing to him that the province would chop the stand-alone price while leaving the rooftop installations at the 80.2¢ offer. Also disturbing is the application of the cuts to those applications that had been made in acceptance of the original offer.

The changes apparently are to become law on Aug. 6. Meantime, Mr. Horner said there’s “a lot of lobbying going on.” His advice to his prospective customers is to hang tough until Aug. 6.