The Ontario government hasn't said if it will ban solar panels on prime agricultural land. (Eric Risberg/Associated Press)

About $5 billion in potential investment could go elsewhere if Ontario bans solar panels from prime agricultural lands, the Canadian Solar Industries Association warned Tuesday.

The government has refused to confirm that it will ban solar panels from the best kinds of farmlands when it announces regulations later this week for its Green Energy Act, but that's what the industry is hearing, association president Elizabeth McDonald said.

The problem with a ban, McDonald said, is those farmlands also tend to be the ones that get the most sunshine, and they often provide easy access to the electricity grid.

"This agricultural land tends to be close to the transmission lines and, yes, sun is important for agriculture as well as for solar," McDonald said in an interview. "All we've said we need is .11 per cent of the agricultural land in Ontario, and much of this land isn't being used right now [for farming]."

That works out to about 81 square kilometres of land, some of which is already used for alternative energy production such as growing corn for ethanol, McDonald said.

Imposing a ban could scuttle large-scale solar farm projects in Ontario, which McDonald said have the potential to create 10,000 long-term jobs and, in the process, help train local workers for the green economy.

"You take a lot of people and teach them how to mount panels, etc., and then often … these are the people who become the local installers in the town or cities," she said, citing the experience with solar farms in several European countries. "[A ban] is going to limit growth and with that goes the jobs and manufacturing potential, etc."

Solar panels also provide rental income to farmers, and the companies have plans to decommission the solar farms after 20 years and return the land for agricultural use, McDonald said.

"We're very willing to do whatever studies that might be requested when we go into areas," she said.

Regulations coming

The Liberal government will unveil the regulations to support its highly touted Green Energy Act later this week, which will also include such things as mandatory set-backs from residential areas for industrial wind turbines.

Solar power companies have been anxiously awaiting the regulations, which could be the deciding factor in deciding whether solar farm projects get off the ground in Ontario or move to the growing U.S. market for alternative energy supplies, McDonald said.

"Companies are sitting here trying to make up their minds," she said.

"The competition is increasing and companies will be saying `is there enough of a market to stay in Ontario or are we going to go elsewhere where it might be less onerous?"'

A spokeswoman for Energy Minister George Smitherman wouldn't comment Tuesday on the potential ban on solar panels, and said any such restrictions would be announced as part of the regulations for the Green Energy Act.