"We're looking at dropping about $1.5 million below revenue expectations this year," said Peter Glover, director of sales and marketing for Ottawa Solar Power.
A big part of the attraction for residential solar projects has been the high price the province has typically paid for surplus power.
But the Ontario Power Authority dropped the rate from 80.2 cents per kilowatt hour to 58.8 cents in early July, and some say the business implications were felt immediately.
"We've lost 16 clients within the last week," said Mr. Glover.
Ontario's microFIT program, began last October, sets the prices for surplus power from small solar energy projects – those producing 10 kilowatts or less – much higher than the going rate of below 10 cents per kilowatt hour.
But the drop from 80.2 to 58.8 cents is still enough to sour the deal for many customers.
Ottawa Solar Power had 42 ground-mounted contracts awaiting approval, Mr. Glover said. But when the rate dropped all these deals fell through, after customers complained the new six-per-cent rate of return wasn't high enough to cover the installation cost, he added.
The saving grace for Ottawa Solar Power was that the changes only affect ground-mounted systems.
"Many of our clients have opted to move [the solar panel] to their roof," said Mr. Glover.
According to an Ottawa Power Authority press release, the new rate reflects lower costs associated with installing a ground-mounted solar photovoltaic project compared to a rooftop one.
For Ottawa Solar Power this means refocusing their business toward roof mounted systems, said Mr. Glover.
But other solar panel installation companies have adopted a different strategy.
"Lots of companies went out in good faith and invested in infrastructure for sales under the assumption that the market would be boosted by subsidies," said Jim Cummings, president of Ottawa solar panel installer Clearly Solar.
He added Clearly Solar isn't trying to move its customers to roof-mounted systems – instead, Mr. Cummings says he's choosing to fight.
"Right now we're taking the position that if all of us get together and voice our outrage it's possible they may back down on this," said Mr. Cummings, adding that the government didn't give the industry fair warning.
Clearly Solar has between 50 and 75 ground-mounted contracts pending, each worth around $80,000, said Mr. Cummings. "That's about $4 million in jeopardy."
Most of their microFIT customers are rural farmers who might not have a roof facing the right way, he said.
Mr. Cummings added the province originally said it would evaluate all applications for the microFIT program within 30 days, but that the time frame for evaluations kept getting pushed back.
"Some companies haven’t had a job in six months," he said. "It's the worst case of political and bureaucratic bungling I've ever seen."
Rural farmers are leading the backlash because they were early adopters of the program, said Warren Abor, president of Ottawa solar installation company ISolara.
"I don't know if the government will be able to make this stand because I've never seen so many angry people before," he said.
Indeed, the rate change seems to have shifted the solar marketplace from land-rich rural areas to more rooftop-inclined urban markets, said Mr. Abor.
"It woke up the market for people in the city," he said, adding many urbanites now realize they can earn a high rate of return with rooftop panels, said Mr. Abor.
During an Ontario Power Authority conference call on July 6 and 8, five neighbours explained they had pooled their money to get a deal on five installations. But because of the timing of their applications, only three got the conditional offer at 80.2 cents, while the other two landed at 58.8 cents, according to Mr. Glover.
The OPA is holding a 30-day consultation period on the proposed new price.
"The change has hurt public perception of the program," said Joshua Pearce, a renewable energy engineering professor at Queens University, in an e-mail.
Mr. Pearce said there is reluctance on the part of solar businesses to set up full-scale manufacturing operations because they are unsure about long-term support from the Ontario government.
"Literally thousands of people who supported the program (are) now likely to pull out disappointed, and feeling cheated."
-By Mathew Klie-Cribb
