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May 19, 2015 | Oh, Canada: Let’s Spread Solar Around
Canada has long been a perplexing market. Solar growth in Ontario has been spectacular, but the other nine provinces in the country have been slow to adapt.
There are a few factors affecting solar growth outside of Ontario:
•Low electricity prices. Outside of Ontario, electricity prices remain so low there is no incentive to bring solar into the power-production mix. Without governmental subsidies, solar often doesn’t make financial sense.
•Low oil and gas prices. While the battle over the Keystone XL pipeline rages in the United States, Canadian provinces can’t seem to break their addiction to fossil fuels. The sources are close to the customers, prices are relatively cheap (though they have risen recently) and environmental concerns don’t seem to faze the governments. Alberta, however, is suffering a significant image problem because of its commitment to fossil fuels. The government is currently discussing a renewable-energy (RE) framework to boost its potentially lucrative RE market.
•Alternative clean energies exist. In Ontario, there’s an ongoing debate about whether to refurbish nuclear plants. If they decide in favor of doing so, that will limit the necessity for further solar installations. In Alberta, the presence of large natural gas reserves makes a move to solar appear unnecessary (though natural gas and solar are complementary energy sources that could work together).
Still, solar’s success in Ontario offers some clues about how to boost the solar industry in other provinces:
- Jobs, jobs, jobs. Instead of focusing on the environmental advantages of solar (which, though important, don’t affect most citizens daily), Ontario’s government has focused on the jobs in the industry creates. Worker training opportunities are also expanding, despite having no official certification program like NABCEP as the United States does. This emphasis allows consumers to understand solar’s real importance to the economy: It puts money in their pockets.
- An aggressive feed-in-tariff (FiT). The Ontario government periodically procures solar through a FiT, which provides incentives for its citizens to connect to solar power systems. Carefully managed, FiTs are the most effective way to grow a solar market (Germany’s world-leading solar market was built on a robust FiT program). In Ontario, the FiT is scheduled to scale down gradually to make it sustainable in the long term. But even at its lower rate, it will continue to fuel the market.
- Driving down soft costs. This area is the trickiest, but driving down the costs of construction, development and permitting is critical. Though Ontario is not there yet, the Ministry of Environment is working hard to streamline the permitting process, particularly on ground-mounted projects. There is no question costs will come down. The only concern is whether they will come down fast enough to ensure all current projects will be completed.
Overall, the Canadian market provides great potential for growth. But it will be driven by other provinces emulating, as much as possible, the wildly successful Ontario model.