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Ontario’s new green energy act

New legislation removes barriers to the development of renewable energy


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Get on the fast-track to powerThe days of burning through financing while waiting for renewable energy project approvals are quickly fading into the past. The Green Energy and Green Economy Act, 2009 (the Act), passed in May 2009, is removing the barriers to investing in the province’s renewable energy sector. The result? Growth of a robust green economy that puts Ontario on a leadership path for investment in renewable energy. While regulations won’t be in place until summer 2009, investors, project developers and other industry players must act now if they hope to identify the most lucrative investment opportunities. Getting on the fast track can maximize your success in Ontario’s new business landscape. Here’s how the new Act will help:

Get to market faster
To date, investors in renewable energy projects had to deal with multiple provincial and municipal authorities to get permits indicating compliance with a wide array of regulations and by-laws. With the new streamlined approval process, the Act will create a “one stop shop” for all necessary permits, allowing you to bring projects to market faster. The Honourable George Smitherman, Ontario’s Deputy Premier and Minister of Energy and Infrastructure, plans to implement a six-month service guarantee for renewable project approvals, compared to current waiting times in excess of one year.

Creative coaching
In addition to shortening the approval process, the new Act will connect investors with a Renewable Energy Facilitator to guide them through project development – eliminating complexity and confusion along the way.

Full speed ahead
Administrative complexity is not the only barrier the Act will remove. New Planning Act exemptions also help investors build renewable energy generation facilities and engage in other renewable energy projects despite municipal zoning by-laws that may otherwise prohibit development. This will overcome potential municipal obstacles to some projects.

Realize revenue certainty
To make it easier for developers to complete proposals, a feed-in tariff program will mandate standard contracts and pricing for renewable energy project developers. This helps developers avoid costly and time-consuming proposal processes, and pricing certainty delivers revenue certainty, positioning investors to gain greater access to financing.

A direct connection
The Act also promises to replace the current “first come, first served” approach to electrical grid connections. Instead, distributors and transmitters will be required to offer a priority connection for all renewable generation projects that meet Green Energy Act and Ontario Energy Board (OEB) requirements. With set time limits for these connections, investors can limit the financial exposure they currently face while waiting to be hooked up.

Build your power base
To realize first mover advantage in this rapidly evolving environment, investors, developers and corporate executives should identify optimal investment opportunities. Areas of particular interest include smart grid investing and smart metering, along with more conventional renewable energy projects. Municipalities also stand to benefit with new rules that allow them to own and operate certain renewable energy facilities.

As an added advantage, the province plans to provide grants and loans on favourable terms to encourage renewable energy projects. You need to lay the groundwork to access this capital, and take advantage of other tax and funding incentives. With the Act now in effect, you have no time to lose. Deloitte can help you develop a tax-effective investment structure, gain access to capital, identify the most lucrative investment opportunities and help in determining a predictable return on your investment.

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