The move comes six weeks before a provincial election that experts say will put the McGuinty government's energy and environmental policy under a critical spotlight.
Industry observers called the directive a positive step, but said many renewable project developers in Ontario have been discouraged by a number of barriers, both infrastructure and policy related, that have delayed their plans or scared away investors.
"There's a significant amount of money that's been invested in the area, and people were encouraged to invest those dollars, but investment doesn't sit forever," said David Timm, Ontario policy manager for the Canadian Wind Energy Association.
Timm said transmission constraints, particularly in a large area of southwestern Ontario, called the "orange zone," have prevented many developers from moving ahead until adequate capacity can be added to the lines.
And even with new capacity, many observers say the government is giving priority to nuclear power, not renewables.
Permitting delays have also played havoc with developers' business plans, an issue that needs to be addressed if the province wants its latest power purchase negotiations to be successful, added Timm.
"Investors need to be able to sell their power somewhere, and they need to know when that will happen."
The government has directed the Ontario Power Authority to begin talks with native groups, industry and other stakeholders to determine how it will go about purchasing the power and determining schedules for connecting the green energy to the power grid.
The procurement will be broken into phases, with the process for a 500-megawatt purchase put in place by the end of this year.
Only projects above 10-megawatts will be considered. Duncan said the requests for proposal will be open to all forms of renewable energy, including hydroelectric and landfill gas.
Though a long shot, even enhanced geothermal energy projects could qualify.
"If there was a practical electricity generation application, it would certainly be looked at," said Steven Erwin, a spokesperson for the energy ministry.
Successful proponents will have to demonstrate they have adequate access to transmission lines, meaning projects located in the orange zone will likely be excluded.
The devil will be in the details, said Joyce McLean, director of strategic issues at Toronto Hydro Corp., which wants to build an offshore wind farm in Lake Ontario near the Scarborough Bluffs.
"Unless they have a mechanism to procure higher-cost offshore wind, it doesn't really benefit the proposal from Toronto Hydro," she said.
Premier Dalton McGuinty's government has set a long-term goal of creating 15,700 megawatts of renewable generation by 2025.