Harnessing Renewable Energy
By Treena Hein
Opportunities are growing for poultry producers, especially in Ontario
By Treena Hein
They’re becoming more common all the time – Canadian poultry farms
where alternative energy is used to heat and ventilate barns and/or
produce electricity. To the benefit of poultry producers’ pocketbooks –
and the environment – they’re about to become even more commonplace.
They’re becoming more common all the time – Canadian poultry farms where alternative energy is used to heat and ventilate barns and/or produce electricity. To the benefit of poultry producers’ pocketbooks – and the environment – they’re about to become even more commonplace.
|Solar panels can be installed in your yard or on your roof. Investigate each option carefully and go with a well-established company.|
In February 2010, Agriculture and Agri-Food Canada announced the Farm Credit Canada (FCC) Energy Loan, “designed to assist producers and agribusiness owners who want to make the move towards producing their own renewable energy.” Available on March 1, the Energy Loan helps both producers and agribusiness operators purchase and install on-farm energy sources like biogas, geothermal, wind or solar power, with interest terms of up to five years at variable or fixed rates with various payment options.
Ontario farmers are fortunate to have extra incentive in adding renewable energy systems to their farms. Since late 2006, Ontario Power Authority (OPA, the agency that “plans and procures” Ontario’s electricity supply) has offered a “Renewable Energy Standard Offer Program Contract and Option Agreement” to anyone producing electricity using alternative energy (such as wind, bio-digesters and solar). This year, OPA is going a step further, and providing a special offer under its microFIT (FIT stands for feed-in tariff) program.
For very small (micro) renewable electricity generation projects – 10 kilowatts or less in size – registered under the program this year, OPA will offer a guaranteed 20-year contract of 80.2 cents per kilowatt-hour produced. Applicants can also install larger FIT systems (up to 250 kW), but these are offered at a lower price, need to pass connection testing, and take longer to commission.
It’s almost certain that there will be changes to these rules by 2011, so “clearly, there is a huge opportunity for Ontario farmers to benefit from installing solar this year,” says Ontario Federation of Agriculture researcher Ted Cowan, who has given multiple presentations on microFIT to farmers. There were more than 7,300 microFIT solar applications submitted by the end of March, notes Cowan, with a large but unknown fraction of these being from farms. It is also not known how many are for solar, wind or biogas projects, although solar is definitely popular.
“Once it’s paid for, a solar system provides additional income of about $10,000 a year, and enhances the value of the farm,” he says. “You will also feel great about going ‘green,’ show the general public that Canadian agriculture is progressive, and learn about a new technology. However, you have to do your homework very well.”
The three steps involved in participating in the microFIT Program are submitting an application and receiving a conditional offer, building the project, and getting inspected and accepting the contract.
The cost for a solar system is anywhere from $70,000 to $100,000, so Cowan advises comparing this option with other investments you may have in mind – such as quota, land, machinery and energy conservation projects. “Ask yourself which pays best, which adds most to your overall farm value, which has manageable risks, etc.,” he says. “For poultry or pork operations that require substantial amounts of heat, often supplied by propane, a solar heating system can be a money-saver. Installations are lower cost and the payback period is under five years.”
First things first
Once you’ve decided to proceed with installing a solar microFIT project, the first piece of advice Cowan offers is not to buy from the first company that comes along. “Check out the competition,” he says. “Ensure the company is reputable, and research the pros and cons of various options. In short, do your homework. Customers should look for firms that have been in business 10 years plus and that use well-established electrical contractors.”
|What’s right for me? |
In your research, Cowan strongly advises focussing on panels and inverters that will withstand the elements. “These are advisable over high-efficiency panels that take less room but don’t last,” he says. “Properly installed, good components will earn $9500 to $12,000 a year with a 10-kW system. The loan will be paid out in seven or eight years, so with the profit part in years 9 to 20, you’ll need good components that are still earning for you during that time.” Cowan adds that you may also want to look into cost-sharing offers that some vendors offer.
However, cost-sharing is one thing and leasing your land is another, something which Cowan strongly advises against. “Letting someone build a solar unit for themselves on your land won’t be worth it,” he notes. “The rent is paltry, and it certainly won’t cover the cost of a lawyer if there is a dispute. You’ll have insurance costs and higher taxes to deal with too, and you may be obligated to help maintain the system.”
But the taxes relating to solar systems are not particularly onerous. “Property tax will increase by about $400 per year and income tax will be your marginal rate on about $10,000,” says Cowan. “The capital cost allowance is also favourable.” For those with tax concerns, Cowan suggests considering shared ownership of the unit with family members to split income, putting the income into such investments as RESPs for grandkids, RRSPs for yourself or your spouse, and tax-free savings accounts.
The paperwork is fairly straightforward. “Applications are online, and most people can do them, but most vendors can also do it for you,” Cowan notes.
Solar panels can be installed in your yard or on your roof. Investigate each option carefully.
Bruce Lidner, a broiler producer near Amulree, Ont., northeast of Stratford, installed a ground-mounted microFIT 60-solar panel system in early March 2010. (In 2008, Lidner also installed a solar hot-water barn heating system using grants that have since been severely reduced. He doesn’t regret the project, but says the setup he has is not financially feasible for others, with those grant amounts no longer available.)
“For me, having it on a roof was not the way to go,” says Lidner. “You can’t track the sun and so your efficiency is cut, you probably have to get an engineer to check out your roof for load, and you may need to add support trusses for snow load and panel weight.” It’s also easier to remove snow from panels on the ground if needed.
Lidner went with Copperhill Solar Systems, which has distributors across much of southern Ontario. He says having a larger number of panels in his array provides much better return than a smaller number would. In addition, the system’s electricity output is maximized with sun-tracking, accomplished by one large motor every 10 minutes. “It’s a very solid structure with a heavy gear box,” Lidner notes. “It’s also designed to absorb some shock to buffer the effects of the wind.” The larger array, in addition to the system’s sun-tracking capability, ensures that more than 10 kW is pretty much always being produced – but as with all microFIT projects, only about 10 kW goes through the inverter into the grid in compliance with the agreement.
Most companies ensure their systems generate more than 10 kW as much as possible – many through the use of high-output panels – so that return on investment is maximized. Each option – automated or manual sun-tracking, more panels, high-output panels, or any combination of these options – should be investigated carefully in terms of initial cost and cost return.
Jessica Tracey of Ag Energy Co-operative in Guelph, Ont., also recommends 10-kW ground-mounted solar microFIT systems. Ag Energy Co-operative is an independent, farmer-owned co-op formed in 1988 to provide energy products and services to its members and Ontario agriculture. It offers both roof and ground installs. “Roof-mounted systems can be more costly, approximately $1 more per watt and may incur additional costs if structural engineering and reinforcement are required,” says Tracey. “Our ground-mounted systems are turn-key and only take up 1,500 square feet of space.” Manual angle adjustment of the array is required four times a year to maximize output during each season, which only takes a few minutes each time. In addition, Ag Energy’s 48-panel array is “oversized” in terms of electricity output, ensuring 10 kW goes through the inverter as much of the time as possible.
Sales representative Nick Harper of Home Energy Solutions (Barrie, Ont., with head office in Victoria, B.C.) recommends its roof-mounted array. “It is a quicker and much cheaper installation than ground-mounted systems,” says Harper. “Our panels weigh only three pounds a square foot, and we’ve found that 90 per cent of the roofs we’ve dealt with didn’t need any modifications. Trusses every 48 inches are sufficient and, with barn roofs, there should be no issue.”
Harper says a sloped, roof-mounted system “should” cost about $70,000 to $80,000 installed, and a typical fixed ground-mount system costs about $6,000 to $10,000 more than that. “The most expensive type of ground-mounted option is the solar trackers,” he says. “Although companies offering these claim to produce 20-40 per cent more electricity from the array, they tend to cost anywhere from $90,000 to over $100,000. That’s a lot of difference to make up for.” Harper also points out that trackers require substantial long-term maintenance. HES systems are oversized to 11.5 kW, “so you’re getting close to full output all day long on a south-facing sloped roof,” he notes.
Lidner’s overall advice echoes that of Cowan. “Go with a well-established company,” he says. “Take your time. You don’t want to make a mistake.”