Canadian Lawyer

LEGAL REPORT/Energy The risks of renewable energy S hane Freitag has been working in the area of renewable energy law across Canada since before wind turbines and solar panels became part of the landscape. ���It wasn���t so sexy when I started but it sure has become more so,��� says Freitag, Toronto regional co-chairman of the electricity markets group at Borden Ladner Gervais LLP. ���I think we���ve seen renewables take greater focus in almost every part of Canada.��� Investors and developers of renewable energy projects need to cover a broad area of due diligence to make sure they don���t get burned. Many of the lessons learned along the way came the hard way for those who jumped into the sector early. In Ontario, when the feedin-tariff program was launched in 2009, many thought just landing a contract with the Ontario Power Authority was the hardest part, when it was really the process of development that became an equally challenging pursuit. The technology is also rapidly changing, which heavily influences projects. As the market evolves, so does the approach developers are taking to wind and solar projects. ���Three-and-a-half years ago, I described this to some early clients as being like the Oklahoma land grab,��� says Randy Williamson, a partner with Aird & Berlis LLP. ���When the FIT program was launched in 2009, people were running around to line up rooftops and land spaces for solar ground mounts. In large numbers those developers were new at the business and perhaps because they were too eager they perhaps forgot development is not a straight line. Just like in the real estate business you may have the zoning you want and land you want, but developing the appropriate condo or commercial development you���re looking for is not a straight-line activity.��� Three years later, the technologies are becoming more efficient and that is changing the price paid out, says John Vellone, a lawyer with BLG and a member of the firm���s electricity markets and IT group. ���The fact is the cost per panel has gone down substantially since 2009. If you look at the Ontario feed-in-tariff rates you saw the highest price paid in 2009 was 82 cents and the highest price paid now is 54 cents. That change is reflective of the decreasing costs of the technology.��� The cost of the technology is linked to FIT prices because the Ontario Power Authority is using a cost-plus-rate-ofreturn model to set the FIT pricing. All these factors should be taken into www.CANADIAN L a w ye r m a g . c o m March 2013 43 Juan Carlos Solon Success in renewable energy projects comes from an honest evaluation of the challenges to entry. By Jennifer Brown

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