In Ontario, solar power makes the most economic sense when it is close to the source of consumption.  However, since the burden of transmission costs are directly on the consumer, companies have exploited government subsidies and the low cost of uninhabited land.  Despite this situation, the microFIT program has been enormously successful.

The response of local distribution companies to the FIT program has been mixed, but it seems to be for reasons unrelated to the company’s desire or lack thereof to implement renewable energy technology.  For example, Toronto Hydro has connected 97% of all FIT applications demonstrating that the program is very achievable.  However, other LDCs (local distribution companies) have not done the same.  One reason for this is that he entire infrastructure of Ontario’s power network is very large, old and heavily regulated.  Just recently, transmission lines installed in 1926 have been replaced.  It’s not that old lines such as these don’t fulfill their intended function; it’s that in the past, the entire system was designed to transmit very large amounts of power from stations like Darlington and Niagara Falls over long distances to into the GTA.  The systems were also designed to last and so it often doesn’t make sense to immediately replace them whenever slightly better technology becomes available.  Of course, newer LDCs will be able to accommodate more FIT applications.  But this shouldn’t reflect badly on older LDCs which can’t immediately accommodate applications.  These newer systems are designed with newer technology and the application of intermittent renewable energy technology in mind whereas older systems are not.

As an aside, energy investments are typically amortized over 20+ years.  So this has not historically been a fast paced industry like the electronics industry where your computer will become obsolete within a year.  Module costs are in fact falling at a rate beyond expectations.  However, adoption of solar power into existing infrastructure can be slow for economic and technical reasons.  This effect is compounded by the domination of current power generation incumbents like oil, natural gas, nuclear, and hydro.

It seems like solar power will inevitably play a significant role in the world’s energy mix.  However, unlike the latest smart phone which is sold by the millions within days, adoption of solar power will, by the nature of energy investments, be slower in comparison.

-Nathaniel Tanti, M.ASc

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