Hello everyone! I was recently in Toronto attending Solar Canada 2012, a conference on the Canadian solar industry. The conference was put on by CanSIA “a national trade association that represents approximately 650 solar energy companies throughout Canada”. The conference featured panels of industry leaders discussing issues such as policy, market trends, and the future of the solar energy in Canada. I will be giving a brief summary of one of the talks I attended, which highlighted the current state of the solar industry. Panelists included Mike Crawley, President of International Power Canada, Doug Urban, Managing Director of Hanwha Solar Canada Inc. ,Mike Dilworth, Vice President and Country Manager of SunEdison Canada, Kerry Adler, Director, President and Chief Executive Officer, of SkyPower Global and Terry Olynyk, Director of Renewable Energy, PCL Constructors. Their discussion covered what the solar industry looks like in Ontario today, the issues that it is currently facing, both financially and politically, as well as what the future holds.
One of the most pressing issues that was brought up was the high level of uncertainty in Ontario’s solar energy market. Uncertainty scares away investors, and as a result less green-energy jobs are created, and the development of solar power slows. Canadian solar manufacturers are currently on the lookout for the recent ruling from the World Trade Organization (WTO), which claims that Ontario’s Feed-in-Tariff (FIT) program, part of the Green Energy Act, violates international trade law “by unfairly pressuring producers of clean energy to buy hardware and services from companies located in the province.” . To give a bit of an overview, the Green Energy Act stipulates that in order for a solar power producer to qualify for Ontario’s FIT program, 60% of the installation must be produced by Canadian manufacturers (this is the domestic content clause of the Act). This promotes the development of a solar manufacturing industry in Ontario. The WTO ruling challenges this part of the Act. Ontario solar manufacturers fear that if Ontario complies with the WTO and removes the domestic content requirements from the FIT program, then they will not be able to compete with foreign manufacturers. Without the FIT program, and without the requirement for Canadian produced content, manufacturers would go out of business. This leads into another point of uncertainty, and that is the government’s stance on green energy. There is possibility of an election coming up next year, and in the previous election opposition leader Tim Hudak said that he would abolish the Green Energy Act entirely. Even without a change in government, the Liberal leader Dalton McGuinty is leaving office soon, and there is a strong possibility that his successor will have a different approach to green energy. All in all, the level of uncertainty in the Ontario market makes investment quite risky.
The issue of uncertainty and the potential threat to Ontario solar manufacturers brings up a dilemma that was touched upon in the previous paragraph. Ontario solar manufacturers cannot compete with foreign competition (particularly China, who manufactures very cheap solar panels) without the domestic content clause of the FIT program. In the opinion of some panelists, we are wasting our efforts propping up an industry that is not meant to be. By forcing solar installations to be manufactured in Ontario where it is more expensive to do so, the final cost of the installation becomes artificially high, which can discourage investment. By getting rid of the domestic-content clause, overall prices will be driven down and more people will be willing to install solar panels. As well, with increased installations there will be more jobs available to people. What we have here is a fundamental difference in vision for the future of the solar industry in Ontario. Do we want to prop up manufacturing in Ontario and further develop our green-energy sector, even if prices are driven up? Or do we want to scrap manufacturing, and instead focus on the cheap installation of solar energy? It is tough to choose a side. We want Canada to play an active role in solar energy on an international level, and having a strong manufacturing sector is a way to do that. However, the ultimate goal of solar energy is to provide clean power on a large scale, and the way to do that is by making is cheap enough that more people will buy it. In any case, the panel highlighted that one of the biggest questions in the next few years will be whether or not Ontario has a future in solar manufacturing.
Another point that was stressed by the panel was the need to communicate with the public. Solar energy creates jobs through manufacturing and installation, and there are financial benefits to those who own installed systems through the FIT program. These aspects need to be stressed to the public to help drum up support for the industry. Public support will ultimately lead to political support, which will strengthen the industry, and make it immune to changes in government. Looking at the energy sector as a whole, solar is at an advantage when it comes to public relations. Coal is polluting and dangerous to the environment and health. Hydroelectric power is clean, but does irreversible damage to ecosystems. Nuclear power, while also clean and safe, still has a potential for catastrophic failure and its relationship with the public has always been strained; the accident at Fukushima is still fresh in people’s minds. Wind power is safe and clean, but often faces opposition from people who don’t necessarily have any grudge against it, but don’t want turbines built near their homes. This is where solar power stands apart from other power sources. It is safe, clean, renewable, and is more favourable to wind when installed near communities. Not to mention that it creates jobs, and through the FIT program average homeowners can make money from it. Considering all these aspects, acceptance of solar power is easy to sell to the public. With more money invested in advertising campaigns, we can rally more support behind solar power in Canada.
The use of renewables is growing across the world. Germany is leading the way, with over 24 GW of installed solar capacity in 2011 . This accounts for almost 15% of their total power capacity. In Canada for 2011, solar accounted for only 0.01% of energy production . Solar power is still in its infancy in Canada, and there is a lot of work to be done if we plan on becoming a world leader in renewable energy. Despite the uncertainty in Ontario’s solar industry, and in what the future may hold, one thing is for certain: solar power here to stay.
-Kevin Boyd, MASc Candidate, Year 1, McMaster University, Ontario