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Ontario Adds 2.5 Gigawatts of Renewables

Ontario announces 2.5 gigawatts worth of renewable energy projects, with as much as 760 MW being awarded to the solar industry over the next three years.

(Ontario renewable energy story updated for Recurrent Energy contract, comments)

ONTARIO, Canada (

TheStreet

) -- Ontario has awarded 184 renewable energy projects for a total of 2.5 gigawatts of alternative energy, under its feed-in tariff scheme for projects of more than 500 kilowatts in size, the most favorable FIT scheme that exists in North America.

Solar companies, including

Canadian Solar

(CSIQ) - Get Canadian Solar Inc. Report

most prominently, have pegged the Ontario market as an important growth driver as FITs are reduced in some European countries, led by the German FIT reductions. Canadian Solar has committed to building a module assembly manufacturing plant in Ontario.

The largest number of contract awards in solar were made to a Canadian solar company,

Northland Power Solar

, a company listed by the Ontario Power Authority (OPA) as

Ontario, Inc.

-- both received more than 10 projects -- and privately held San Fransisco-based

Recurrent Energy

.

Recurrent Energy won the most individual contracts, with 23 contracts for a total of approximately 165MW of ground-based solar. Recurrent expects to invest $400 million across the Ontario solar projects. The private solar company, backed by

TheStreet Recommends

Hudson Clean Energy Partners

, has a global pipeline of 1GW.

It was not immediately clear if publicly traded solar companies in the U.S. were among the contract winners, because the contracts were listed by the legal names of the specific solar project applicants in the OPA announcement.

Ontario Inc. received 166 MW of solar contracts, while Northland received 130MW of solar projects.

MEMC Electronic Material's

(WFR)

SunEdison subsidiary seemed to be among the winners, with one of the 10 MW award contracts by Ontario given to a legal company known as

SunE Rutley

.

Arno Harris, CEO of Recurrent Energy, said while the privately held solar company has most of its existing solar capacity in California, the southwestern U.S., and northeast U.S., the Ontario award was its single-largest contract win to date.

What's more, in conducting research for the Ontario market, the privately held solar company made sure that there would be an adequate supply of module manufacturing in Ontario to meet the domestic content requirements of Ontario's FIT program. Recurrent Energy has not announced solar module suppliers with which it plans to work on projects, but Harris said that all the major solar module manufacturers have Ontario plans, and Recurrent is in discussions with "all the names with which you would be familiar."

The Recurrent Energy CEO added that its $400 million estimate of capital expenditures for the solar projects so far awarded by Ontario, assumes a solar module price of $1.40 by year-end.

Wednesday was one of the biggest rally days for solar in 2010, as revised shipment guidance from

JA Solar

(JASO)

sent the entire solar sector to 2010 highs. While solar stocks are down again on Thursday after their big gains, the Ontario news is another positive demand indicator for solar.

It has long been known that Ontario would be introducing its FIT contract awards in 2010, though the exact level of the solar capacity was not previously available. A

recent bullish 2010 demand forecast from Credit Suisse for the solar industry led to the biggest rally in solar shares this year before JA Solar's Wednesday announcement.

Inverter company

Enphase Energy

has also recently set up a manufacturing operation in Ontario in light of the lucrative FIT scheme. Ontario's FIT scheme requires -- beginning in 2011 -- 60% of content for projects to be domestically manufactured, and solar inverters are counted as 10% of the total domestic content requirement.

Of the 2.5 GW across 184 renewable energy contracts that the Ontario Power Authority announced on Thursday morning, 76 of the projects are for ground-mounted photovoltaic solar. The total number of applications received for projects by Ontario equaled 8 GW of energy, with solar applicants dominating the project requests.

The largest solar projects are 10 megawatts per contract, and the total awards for the solar industry in the first major phase of Ontario's feed-in tariff program for large-scale, ground mounted solar are 651 MW of the 2.5 GW total.

A complete list of the

solar companies that were awarded contracts is available here .

A total of 93 projects were awarded by Ontario to the wind industry, equally divided between onshore and offshore wind.

-- Reported by Eric Rosenbaum in New York.

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