D.1. The Green Energy and Economy Act

On May 14, 2009 the Ontario government passed Bill 150, the Green Energy and Economy Act (GEA).

The purpose of GEA is to facilitate the development of a sustainable energy economy that protects the environment while streamlining the approvals process, mitigates climate change, engages communities and builds a world-class green industrial sector.

The centrepiece of GEA is the Feed-In Tariff [FIT] program.

• The first guaranteed pricing structure for renewable electricity production in North America.
• It offers stable prices under long-term contracts for energy generated from renewable sources.
• It is managed by the Ontario Power Authority.

By encouraging the development of renewable energy in Ontario, the FIT Program will:

• Help Ontario phase out coal-fired electricity generation by 2014 – the largest climate change initiative in Canada.
• Boost economic activity and the development of renewable energy technologies.
• Create new green industries and jobs.

This act is a significant departure from the large-scale, centralized power systems that have been dominant in the past decades.

• Switching from coal to renewable energy is significant in terms of climate change.
• It also marks a shift in who generates power and who benefits from that generation.
• Because renewable energy systems are smaller in nature, they have the opportunity to be community owned and managed – with the benefits brought to the entire community.

These are questions the church can play a prominent role in asking and answering:

• How might our consumption of energy change if we had a direct hand in generating it?
• How can we ensure all members of the community, especially the marginalized, benefit from community-based energy systems?

What does Feed-In Tariff mean?

At its most basic, a Feed In Tariff (FiT) is a way to subsidize alternative energy until it is a viable enough energy source to “compete” on its own.

The definition for renewable energy sources being viable is called grid parity.





How the FIT Works

A FIT is a production incentive that pays a generator of renewable electricity a fixed rate for every kilowatt hour (kWh) of electricity that the generator produces over a 20 year period.

This differs from conventional generators whose compensation fluctuates with the Hourly Ontario Electricity Price (HOEP).

As a result, the FIT allows for much easier economic modelling of revenue for small projects, lowering development costs for these projects.


Even more important is the ability of a FIT contract holder to access capital.

A 20 year FIT contract, guaranteed by the entire Ontario rate base, significantly lowers risk for financial institutions and lowers the cost of borrowing.