Once a contract has been signed, the generator will receive the price specified in the contract over the 20-year term of the contract (40 years for waterpower). The price will not change for the generator once the contract has been signed except for applicable inflation adjustments.

The program rules specify that the FIT and microFIT Programs (including prices) will be reviewed every two years. It is expected that prices for new projects will drop over time if project costs decrease. This means that if you sign a contract today, you will receive today's price for the contract term. If, on the other hand, you wait for two years to apply and sign a contract two years from now, you will receive the price applicable at that time.

By participating in the FIT and/or microFIT Programs you are entering into a business relationship with the OPA and will be receiving business income. We strongly advise all interested parties to consult the Canada Revenue Agency (CRA) or a tax consultant to understand the rules about reporting business income and about collecting and remitting GST on business income.

Please visit http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call 1-800-959-5525 for information on GST registration and collection.

The FIT Program prices were developed based on experience in Ontario and other jurisdictions. Prices differ based on project size and type of renewable energy technology. They cover facility construction and operating and maintenance costs and allow for a reasonable return on investment over a 20-year contract term (40 years for waterpower projects).

The FIT Program prices were also discussed during the OPA's stakeholder engagement sessions. The OPA incorporated much of the feedback from stakeholders into the price schedule. For greater clarity on how the prices were derived, please refer to the April 7, 2009 and May 12, 2009 stakeholder engagement sessions under the FIT Program Archive link.

A range of standardized prices has been established under the FIT and microFIT Programs based on the OPA's knowledge of typical project costs, stakeholder input and experience in other jurisdictions where FIT programs operate. These prices have been differentiated by project size and type of renewable energy technology being used in the project. They are intended to cover equipment, installation, operation and maintenance costs over the term of the contract and to provide a reasonable rate of return on investment. Click here for the FIT Program price schedule.

You will be paid the FIT contract price multiplied by the amount of electricity produced (kWh).

For projects connected to the distribution system - this includes all microFIT and some FIT Program projects - payments will be made by the local electricity distribution company (LDC) to the generator on a regular basis according to the LDC's normal billing cycle. Payments will begin when a project is built, is in-service and has a contract.

FIT Program projects connected directly to the high-voltage transmission system will be settled directly by the OPA for contract settlement amounts only.

Any FIT generator connected to the transmission system who is a market participant will register with the IESO as a "metered market participant" and will settle the "actual energy quantity injected" commodity value with the IESO at HOEP, or at MCP if dispatchable. The settlement schedules are in accordance with the IESO market rules and settlement calendar found at http://www.ieso.ca/imoweb/market/sspc_pm2009.asp#month9.

The OPA will settle any contractual incremental payments directly with the contracted generator. Once a FIT project is built and in-service, payments will be made on a regular basis, usually monthly.

By participating in the FIT and/or microFIT Programs you are entering into a business relationship with the OPA and will be receiving business income. We strongly advise all interested parties to consult the Canada Revenue Agency (CRA) and the Ontario Ministry of Economic Development and Trade to understand the rules about reporting business income and business registration. Please visit http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/menu-eng.html or call 1-800-959-5525 for information on GST registration and collection and http://www.ontario.ca/en/services_for_business/index.htm for information on business registration in Ontario.

There is no limit on generation output. However, payments vary depending on technology and project size. Click here for the FIT price schedule.

In addition, solar projects may not be greater than 10 MW in size and waterpower projects may not be great than 50 MW in size. For other technologies, there is no limit on project size.

Prices differ by type of technology and are based on the size of the project because there are different capital, installation, building and maintenance costs associated with different technologies and project sizes.

FIT Program prices are designed to allow a renewable energy project developer to recover the cost of purchasing, building and maintaining the projects and to earn a reasonable rate of return on investment over the contract period. Prices account for capital costs (e.g., purchasing, building, acquiring land, etc.), operating and maintenance costs, connection costs and a reasonable rate of return.

Solar PV prices are higher than prices for other technologies because of the high costs to buy solar PV systems. Technologies associated with solar PV are rapidly advancing and the current market is still small. The FIT Program prices are designed to kick-start the solar PV industry in Ontario. With regular price reviews scheduled every two years, the FIT price for solar PV is expected to decrease to reflect technological advances and growing market supply.

Experience from other places where a FIT program is offered served as input to the prices for Ontario. These prices take into account experience in other countries (such as Germany and Spain); they also specifically reflect the economic and resource conditions unique to Ontario.

The FIT Program prices cover the typical costs to install the specific technology plus a reasonable rate of return. Each renewable technology has different costs and provides different amounts of energy in different timelines. Wind and biomass projects have different prices since their cost components and performance characteristics differ. The intent is not to favour wind over biomass - the intent is to provide an incentive for each of these technologies. Prices are set so that each technology can earn the same reasonable rate of return on their investment.

The FIT Program prices are designed to enable renewable energy projects to recover the costs of construction, operations and maintenance and a reasonable rate of return on the investment over the term of the FIT contract. Prices account for the following:

• capital costs (e.g., building, acquiring land, connection costs, etc.)
• operating and maintenance costs
• cost of debt and percent of debt
• return on equity.

Experience from other places where a FIT program is offered served as input to the prices for Ontario. These prices take into account experience in other countries (such as Germany and Spain); they also specifically reflect the economic and resource conditions unique to Ontario.

The project size categories were based on the different costs associated with the different sizes. The OPA's experience with contracting for small and large generators was also considered.

Setting technology-specific FIT prices helps ensure development across a range of technologies and project sizes. Almost all existing and proposed FIT programs in Europe and the United States take this approach. They set specific rates for a particular technology in relation to project size to account for variations in generation costs depending on project size. Projects are separated into size categories by capacity and the rate is set at different levels for smaller and larger projects. The size categories are generally consistent with the Ontario Energy Board's Distribution System Code.

For some technologies, the price schedule includes an annual increase based on a percentage of the consumer price index (CPI). This increase will help protect developers against inflationary pressures. Click here to see specific prices and CPI factors.

Prices will be reviewed every two years to consider technological advances and other factors that may lead to cost decreases. Changes in prices related to the two-year review will only apply to new projects and the OPA will give due notice before any price changes take effect.