Mike McGahern, owner of Ottawa Solar Power. (Darren Brown, OBJ)

Although winter is finally here, it won't be too long before Ontario residents are again warned about smog days and told to turn down over-active air conditioners to prevent rolling blackouts.

This summer, however, will be the first time that small businesses and farmers from across Ontario can contribute to the Ontario Power Authority's (OPA) vast grid.

Last November, the OPA introduced its new Standard Offer Program, which for the first time in North America, will see the public utility pay individual small-scale power producers. Applications have been pouring into OPA's office to sign on to supply the government with 10 MW of energy or less for 20 years. The first round of contracts is expected to be announced in March, but the process is always open to new applicants.

Paul Shervill, vice-president of program operations and sector development for OPA, said applicants range from farmers to business owners to individual homeowners.

"We are just about to approve 22 applicants. There are three for solar PV (photovoltaic), three for biogas, two using water power and 14 using wind. These will produce 150 MW of power when operational," enough to power 45,000 homes, explained Mr. Shervill.

PV energy will be paid 43 cents per kWh and all others will be paid 11 cents, with a few cents more at peak periods. Over the 20 years of the contract, the base rate will be indexed for inflation according to the year-over-year change in the Consumer Price Index.

The Canadian Solar Industries Association (CanSIA) recently wrote in a report that 250 kW of PV systems had already been installed in the first six months of 2006 in Ontario in anticipation of the Standard Offer Program. It also projected 15,000 residential PV systems producing 40 MW will be installed by 2011 and 3,400 MW will be installed by 2025.

Mike McGahern, owner of Ottawa Solar Power in the west end of Ottawa, has installed systems to individual homes, government projects and businesses. He said there has been lots of interest in the program, but the program is more for businesses rather than individual homeowners.

"We have had lots of people ask about it, but once they start to read the fine print, they realise that on a small-scale it's not worth doing. It's not for the average small homeowner, even though I'd love to see homeowners take advantage of it," he said. "On a large scale, people with good accountants and lawyers and ways to structure a company can take advantage of the program and become a power-producer on a big scale. But I don't see the average homeowner investing in this."

Mr. McGahern pointed out rules in the contract that are keeping small-scale producers away include being forced to sell all the power to the government and not keep any for individual use, paying for a dedicated phone line so the OPA can check the system at any time and having to declare all energy sold as taxable income.

Problems like this have kept many of the most promising candidates from signing up for the program. Farmer Fritz Klaesi is perfect example.

Along with his brother, Mr. Klaesi owns a 140-cow dairy farm near Cobden, Ont. and is one of the few Canadian farms with an operational biogas electrical generation system that uses methane from manure pits to produce electricity. The system cost $280,000 to install with most of the labour done by the Klaesi family. The system is expected to pay for itself in 10 years without the OPA program.

An immigrant who left Switzerland 17 years ago, where he said such operations are common, Mr. Klaesi bought the manure digester three years ago and is hoping to sign onto the Standard Offer Program.

The digester generates 400 cubic metres of methane gas and produces 750 kW of electrical power daily, more than enough power for the farm and two houses. There are several Canadian companies producing small-scale digesters, including RENTEC Renewable Energy Technologies in Peterborough, Ont. Other benefits to the digester include odour reduction, weed seed destruction, and improved fertilizer.

"Right now we produce just what we need, but we want to produce way more. (The Standard Offer Program) would be excellent for farmers. A digester needs constant supervision and the farmers are always around on their farms. It is very environmentally friendly, there is hardly any downside. In Europe it is done quite a bit and it's growing," he said.

However, Mr. Klaesi is holding out for a better price before he will sign up to the program. He said farmers would need between 13 and 17 cents per kWh to be profitable, depending on the size of the operation. Right now they are offered 11 cents.

"We are not happy with the price or the length of the contract. It's not paying top price. We need a few cents more. If there was a clause where the price they would pay us would go up as the market rates go up we would sign on for sure, that's our goal."

Mr. Shervill said that he was not aware of any complaints about the prices or any other part of the contract and that there were no plans to increase the rates.

"I think the contract needs re-examining before it will really make sense for people. It's a step in the right direction. I think we're lucky that the Ontario government is even doing this," Mr. McGahern said.

"I'm excited, it could be good. From a company's perspective, if you have a lot of land or a farm, you could take advantage of it, for sure."