Just an add to the recent post regarding the Ontario government and its plan to embrace a standard offer contract approach to renewable energy development in the province.

I’m hearing that, on top of opening up the grid to solar, wind, biomass and micro-hydro projects under what is likely to be 10 megawatts, the energy ministry is also seriously considering the creation of some kind of revolving fund that would offer low-interest loans for project planning and feasibility studies.

I’ve heard figures as high as $100 million.

This would be another terrific development, not unlike an experimental “green loan” program recently set up by the Toronto Atmospheric Fund and being tested by Tridel.

The Ontario Sustainable Energy Association recommended such a fund in its proposal to the ministry. It called it a “Community Power Innovation Fund,” which would set aside $5 million for 2005 and $10 million in 2006 initially. You can find details of it on page 54 of OSEA’s proposal.

As San Jose, Calif.-based Cypress Semiconductor gets closer to the initial public offering of its SunPower Corp. subsidiary, which is planned for the fourth quarter of 2005, I get the feeling that the folks at ATS Automation Tooling Systems of Cambridge, Ont., are watching closely.

I’ve pointed out before there’s a good chance that ATS, following in the footsteps of Cypress, may be considering an IPO of its solar operations, which would include France-based Photowatt and its new solar unit Spheral Solar in Cambridge.

One step in that process was to combine the two solar businesses into a new group with its own boss. Syl Ghirardi was appointed president and CEO of ATS Solar Group in May, and has since been getting up to speed on the two businesses.

“The new Solar president and CEO is currently developing a business strategy that will entail both technical and commercial aspects, including the SSP launch schedule and the funding strategy for the Solar Group,” the company said during its first quarter fiscal 2006 conference call on August 12.

ATS CEO Ron Jutras said Ghirardi is developing ”long range strategic plans” for the solar group.

Long-range plan? Funding strategy? It sounds increasingly possible that an IPO is in the cards. Of course, ATS will let Cypress sweat it out first, evaluate how well it does, and then make a decision.

Either way, the timing is becoming more and more favourable. The silicon shortage won’t last forever, and what’s increasingly clear is that the boom in solar demand has staying power.

ATS would be wise to unlock the value in its solar business. The question is when, not if, it should do so.