mounting systems, have been entirely machined or formed or cast in Ontario.
The metal for the structural components may not have been pre-machined outside Ontario other than peeling/roughing of the part for quality control purposes when it left the smelter or forge. The machining and assembly of the mounting system must entirely take place in Ontario (i.e. bending, welding, piercing, and bolting).
Applications are made online. The basic applicant and project information required is set out in an OPA document entitled “Renewable Energy/Micro feed-in tariff program” on the OPA website – MicroFIT section . A second document, entitled MicroFIT Program – Program Overview , may also be helpful.
If the application is complete, and your project is determined to be eligible, the OPA will issue you a “conditional offer of MicroFIT Contract”. This offer will become a firm offer to contract once you satisfy the conditions in the offer.
The conditions are straightforward: • You must comply with the MicroFIT rules (the key rules are in this article but you or your legal advisor should consult the document entitled MicroFIT Rules, September 24, 2009, Version 1.0, found on the OPA website). • Your project must be connected to a distribution system with proper metering. • Your project must comply with Ontario content requirements (see above). • You must provide the OPA with your LDC connection details and formally accept the offer to contract.
The conditional offer is valid for 12 months and cannot be transferred to another person or other legal entity. The conditional offer should be sufficient to allow you to obtain a loan for the project from your banker, provided you have good credit and a reasonable relationship.
The conditional offer in hand, you then apply to your local distribution company for connection. The LDC must renew your application and make you an offer to connect with 15 days, provided your application is completed (see above cited documents for contents of the application to connect).
You will work directly with your local distributor throughout the project.
If you decide to proceed, you will probably hire a qualified contractor, if you have not already done so, and need to apply for a building permit.
Once the facility is constructed you complete, as a condition prior to connection with the grid, a safety inspection with the Electrical Safety Authority. If you are using a qualified installer, this inspection should not be problematic.
Complete your connection to the grid, including the payment for any outstanding connection costs incurred by the distributor.
Once your connection to the grid is complete, the LDC will inform the OPA and the OPA will make a final offer of contract.
The effective contract start date will be the connection date if you accept the offer within 15 days or the later of the connection date or the first day of the LDC’s settlement period, if you take longer than 15 days to accept (my emphasis).
Other Issues
Taxes In assessing the tax impact of developing a MicroFIT project, you must consider three taxes: • GST/PST/Harmonized sales taxes, on both the sale of the electricity and the purchase of the generation equipment; • Income tax or income received on the revenue the project generates, as well as any income tax deduction of the operating expenditures and capital cost allowances for the installed equipment; and • Property tax on your building. As with any home improvement, a renewable generation facility may increase the assessed value of your property. GST So long as the contract value of the electricity sold to the OPA (together with any other “taxable supplies” made) in any 12 month consecutive period is less than $30,000, and the vendor is not GST registered, the sale of electricity would not be subject to GST, due to the “small supplier” exemption. However, the sale of electricity constitutes a “taxable supply” and is normally subject to GST at 5%, so if the value of the electricity sold (together with any other “taxable supplies” made) exceeds $30,000 annually, then the vendor is required to be GST registered, and would have to collect GST. Second, the purchase of solar panels, invertors, other hardware and costs of installation would be subject to GST. However, if the person who acquires solar panels, equipment and installation services is registered for GST purposes, such person could claim an input tax credit against the GST that such person collects on the sale of electricity. An individual not registered for GST purposes is not able to claim an input tax credit. PST There is an exemption from PST on the sale of “electricity for all purposes”, so the owner would not charge PST on the sale of electricity to OPA.
Solar panels, invertors and other related equipment could possibly be purchased by a property owner on a PST-exempt basis using the exemption for “manufacturing and processing equipment”. However, manufacturers or producers of electricity (other than utilities) are excluded from being eligible for the “manufacturing and processing equipment” PST exemption. There is, however, an exception for certain “small” manufacturers and producers of electricity who may be able to purchase such equipment on a PST-exempt basis if the total fair value of tangible personal property (e.g electricity) sold by such person in a fiscal year is less than $5,000 or where the fair value of tangible personal property manufactured for such person’s own use is less than $50,000 in a fiscal year.
Where the solar panels, invertors and other equipment become fixtures when installed on a person’s real property and where such equipment is acquired from a contractor who installs such equipment as a fixture, it is the contractor who is subject to and who would pay PST on the equipment, not the customer. Presumably the PST incurred by the contractor on acquiring such equipment would be priced into and passed along to the property owner as part of the total contract price for the equipment and installation. HST Commencing July 1, 2010, PST will be eliminated and instead will be “harmonized” with the GST as part of a combined federal/Ontario sales tax at the rate of 13% (i.e. 5% GST, plus 8% Ontario sales tax). It is expected that the HST consequences will be the same as the analysis above concerning GST except that the rate will be 13% instead of 5%. Income Tax The homeowner or the small business would both be considered to be in the business of generating power, and the revenue received under the FIT Contract will be taxable income. The operating and interest costs of the facility should be deductible and the capital cost allowance can be taken, on the accelerated basis provided under the Income Tax Act (Canada) for renewable energy assets.
Conversion from “Net Metering Project” Net Metered Projects that are under the 10 kw threshold may be converted into MicroFIT projects. Environmental Attributes All environmental attributes, such as renewable energy certificates, carbon credits, or the like generated by the MicroFIT Contract belong to the OPA. Environmental Approvals Solar PV rooftop projects of 10 kw or less do not require a Renewable Project Approval. Wind projects do, if they are larger than 3 kw.
Assignment The project owner can assign its rights and obligations under the MicroFIT Contract (for example, if the owner sells its house) with the OPA’s consent, and such consent cannot be unreasonably withheld. Amendments Future price changes, other program amendments, or the elimination of the program do not affect the status and rights of parties that have already received a conditional offer to enter into a MicroFIT Contract. Price changes and other changes will not be retroactive.
Final Comments While MicroFIT Projects are not large relative to FIT Projects, they can represent substantial sums of money for homeowners, small business owners, institutions or communities. These parties should retain independent legal and accounting advice to assist them with the installer’s contract, (and FIT Contract), regulatory requirements, insurance and tax. Some LDCs may still use connection agreements that differ from the Board approved form. Installers/Suppliers will tend to have a “standard form” contract, but it may need to be adjusted to reflect the buyer’s particular circumstances and interests, and perhaps to more evenly balance the risks.
Thomas Brett ([email protected]) is a partner at Fogler, Rubinoff LLP.
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The Assignment Process is voluntary and requires the active participation of both the Assignor and Assignee. This requires that, without exception, both the Assignor and Assignee complete their respective steps in order for a microFIT Contract to be successfully assigned. The IESO facilitates the Assignment Process and is able to assist both ...
Optional: Use the filters to find a Contract that you want to initiate the Contract Assignment Request for. Select the Business Contract ID to view the Contract that you want to assign. Select Related Actions > Contract Assignment. Choose a reason for the Request, and then enter the reason for submitting the change.
microFIT Program. Ontario's microFIT Program has resulted in more than 30,000 contracts and has encouraged individuals, schools, municipalities, co-operatives and Indigenous communities to participate in clean energy projects and make meaningful contributions to a cleaner environment.
The microFIT Contract Assignment Process requires the participation of both the current Supplier (the "Assignor") and the prospective new Supplier (the "Assignee"), and must be completed through the IESO's online contract management portal, Beacon. The following steps will guide the Assignor in completing the Contract Assignment Request.
If you have a MicroFIT Contract with the IESO, the assignment of the MECA will not be effective until the IESO has assigned the MicroFIT Contract to the Assignee. IESO: In order to assign the MicroFIT Contract, the Assignor and Assignee must contact the IESO Support Line at 1-833-413-6348 (MFIT) or by email at [email protected].
Assignee. Should you require assistance with the IESO process, please contact the microFIT Support Line at 1-833-413-6348 (MFIT) or by email to [email protected]. Regarding the Hydro One process, in order to assign an existing MECA both the Assignor and Assignee must agree, complete and submit an "Assignment and Assumption Agreement
An assignment is required when an owner intends to assign all of its rights and obligations under a microFIT procurement contract under which the output of a micro-embedded generation facility is sold to the Independent Electricity System Operator (IESO) ("MicroFIT Contract") or the Micro-embedded Generation Facility Connection Agreement ...
The Supplier Approver is the microFIT Contract counterparty or an individual who has the authority to act on the behalf of the Supplier (i.e. a director or executive of a corporation, estate trustee, etc.). References to "you" and "your" throughout this user
To transfer an existing contract to a new person or entity, a MicroFIT supplier must "assign" the contract to a new supplier. Rules governing the assignment depend on the version number of the contract. Please see the IESO website for more details. The existing owner must submit the change request to the IESO through the Beacon portal.
The microFIT Contract Assignment Process requires the participation of both the current Supplier (the "Assignor") and the prospective new Supplier (the "Assignee"), and must be completed through ... User Guide for instructions). Once the Change Request is completed, you can reinitiate the Contract Assignment Request.
MicroFIT: An introduction. On September 24th, in conjunction with the Feed-In Tariff (FIT) Program, the Ontario Government announced the MicroFIT Program (MicroFIT). MicroFIT is for small renewable generation, up to 10 kw in size. To be eligible for a MicroFIT Contract, the generator must be renewable, have its own meter, be capable of being ...
Forms. Connection Cost Agreement (CCA) and Connection & Cost Recovery Agreement (CCRA) Application Form. Connection Impact Assessment (CIA) Form B Application. CIA (Form B) Instructions. CIA (Form B) Study Agreement. CIA (Form B) Study Agreement Checklist. Distribution Connection Agreement (DCA) Application.
microFIT-Contract-Version-4 - Free download as PDF File (.pdf), Text File (.txt) or read online for free. This document is a microFIT contract between the Independent Electricity System Operator (IESO) and a supplier. It contains details of the supplier and their electrical generating facility. The contract has two parts - Part 1 provides details of the supplier and facility, while Part 2 ...
The microFIT Contract Assignment Process requires the participation of both the current Supplier (the "Assignor") and the prospective new Supplier (the "Assignee"), and must be completed through the IESO's online contract management portal, Beacon. The following steps will guide the Assignee in completing the Contract Assignment Request.
The IESO does not email microFIT Contracts. Contracts are accessible through your Beacon account by following the instructions below : Following login, please select "Online IESO" and then "FIT/microFIT Supplier". Click the "Manage Contracts" tab at the top of the page. Select the microFIT Contract Reference Number (FIT-Mxxxxx ...
The IESO microFIT Contract Assignee's Declaration is a form that needs to be completed in order for a current supplier to assign a microFIT contract to a new supplier. Situations where a Contract assignment request may be submitted to the IESO include: Sale of property; Adding or removing a party from the contract
During the lifecycle of your microFIT Contract(s), there might be changes to the ownership of the project. In some instances, you might be required to register a new Supplier. ... For instructions on how to Add and/or Remove Contacts from a Contract, please refer to the Contract Management user guide document. Adding Supplier Contacts to ...
If the microFIT Contract is version 1.5 or above, they must include a copy of the Land Transfer or Parcel Register when completing their Supplier Registration. The Assignee must provide their Supplier ID and Supplier Legal Name to the Assignor for the microFIT Contract Assignment Request.
MicroFIT PROGRAM microFITContractAssignment Instructions for Version 1.5 and 1.6 microFIT Contracts DATED April 1, 2017, Independent Electricity System Operator, 2017The microFIT Contract Assignment
I am an Assignor. The Assignment (transfer) of the microFIT Contract is a separate transaction from the purchase and sale of the property containing a microFIT Facility (e.g., A house with solar panels installed on the roof). The microFIT Contract Assignment process must be initiated by the current contract holder, also known as the Assignor.
Please wait for further instructions from the IESO.Execute microFIT Contract Novation and Assignment Agreement (Assignee)Once the Assignee's portion of the microFIT Contract Assignment has been verified by the IESO, a Contract Novation and Assignment Agreement is generated for the Assignor and Assignee to review and accept.
For microFIT Contract versions 1.3 and 1.4: Supplier may assign the Co ntract to any legal entity.. For microFIT Contract versions 1.5, 1.6, 1.6.2, 2.x, 3.x and 4.x: Supplier may only assign the Con tract to an Eligible Participant.. The Eligible Participant Schedule(EPS) versions can be found here: Version 1, Version 2, Version 3, Version 4. If the Supplier's version of the Contract includes ...
During the term of your microFIT Contract(s), there might be changes to the Contacts who manage your Supplier(s) and/or Contract(s) project. The following instructions will guide you through how to Add and/or Remove Contacts from Supplier(s) or Contract(s) in Beacon. Adding Supplier Contacts to Supplier Procedure 1. Select the MANAGE SUPPLIERS ...