Catching a few rays

While debate rages about the pros and cons of corporate wind farming, solar power production has largely flown under the radar.

March 24, 2011 | | Back Issues

Local initiatives aim to cash in on the sun

While debate rages about the pros and cons of corporate wind farming, solar power production has largely flown under the radar.

However, since the Green Energy Act came into force in 2009, thousands of Ontarians have jumped on the solar power generation bandwagon. As of February 2011, more than 25,000 applications had been received by the Ontario Power Authority under their MicroFIT program, which provides both a guaranteed price and lengthy contract to prospective energy producers. Applications are coming in so fast, the OPA updates the tally on its website every two weeks. Ninety-nine per cent of them are for solar projects.

The program has been popular with Headwaters residents too, and a network of small power producers is appearing across the region. Some groups have even been examining the possibility of forming community-wide initiatives. Discussions have taken place in Belfountain and Mono, but perhaps the most advanced to date are in Orangeville. Green Pathways, a co-venture of Orangeville Hydro and Power Up Renewable Energy Cooperative Inc., is proposing a community solar energy co-operative.

Janina Lucci, the organization’s business development manager, explains that although landowners with access to capital have been quick to take advantage of the province’s Feed-in Tariff programs, many people in the community, including renters or owners who can’t afford their own systems, are excluded. As members of a solar energy co-operative, all residents would have the opportunity to participate in the new “green” economy and earn income from it, either through investment or by leasing their roof space to the organization.

The industrial/commercial/institutional (ICI) sector has shown less interest in solar power generation, though there are some exceptions, such as the Taoist Tai Chi Centre in Mono. That hesitation is curious in some ways, given that roof-mounted solar installations pay the highest per-kilowatt-hour return, and manufacturing plants, for example, tend to have a lot of roof.

Independent solar power consultant Tony Howard has met with local owners of ICI properties and he lists a number of reasons for their reluctance to get involved. Chief among them is capital cost. The cost of a large roof-mounted system could easily reach a million or more. Becoming a power generator is also a major departure from core business activities. If you’re focused on making widgets, selling socks or educating kids, chances are that becoming an energy producer isn’t even on your radar.

The Canadian Solar Industries Association expects solar power will displace between 15 and 31 million tonnes of greenhouse gas emissions per year.

Regardless of size, financing your own system isn’t as easy as it may appear either. Even though there are stable, long-term government contracts, Howard says, “The banks are very cautious” when it comes to funding projects. Among their concerns, he suggests, is the question of whether the equipment, and in fact the industry, will be stable and reliable long-term.

In Howard’s view, equipment reliability can be addressed at the planning stage. “Twenty years is a long time, and none of us knows what might come along,” he says. “You have to allow for the possibility that something nasty could happen. Your system could be off for three to six months.”

Of course, with so much solar money floating around, a bevy of new businesses have cropped up offering consulting, equipment and/or installation. Howard estimates that “maybe 10 per cent of these businesses existed before the Green Energy Act.”

Such rapid growth may be positive from an economic development perspective – particularly because in order to get a contract certain levels of domestic content must be met – however it also means there are a lot of newbies in the industry. Howard says, “Some of these companies are offering all sorts of different services, but they have no experience.” While he acknowledges there are a number who “know what they’re doing,” he adds, “Even the established companies don’t have much experience with large systems.”

A similar situation took place a few years ago, when a flood of new entrepreneurs entered the geothermal heating market. Many have since disappeared.

Howard collaborated with management firm Ernst and Young to develop a 40-point project checklist which, in part, assesses the credentials of prospective suppliers of solar services and equipment.

While solar generators are required to pay for the equipment, and for getting the power to the property line, it still falls to the utility companies to deal with it once it gets there. In some areas the rush of new solar systems is creating a bottleneck on the grid. This February, 1,000 homeowners across the province were advised by the OPA that, despite their approved contracts, “We regret to inform you that we are unable to provide you with an offer to connect your microFIT project at this time.” So for now, at least, their investment stands idle.

Capacity issues aside, late last year the Canadian Solar Industries Association released their vision for what solar power will look like in 2025. They anticipate that the cost of solar photovoltaic equipment will drop by more than 50 per cent. The cost of the power produced is predicted to be market competitive within the decade and employment in the sector to grow from a current 3,000 or so jobs nationally to 35,000. They also expect solar power will displace between 15 and 31 million tonnes of greenhouse gas emissions per year.

Regardless of those rosy predictions, there is still healthy opposition to Ontario’s renewable energy efforts. The argument is straightforward: The money doesn’t work.

The price we pay for power is predicted to rise by 5o per cent in the next five years alone.

Even during peak hours, residential customers are typically billed less than 10 cents per kilowatt-hour. Meanwhile, owners of small solar facilities are being paid either 64.2 cents for ground mounted or 80.2 cents for roof mounted systems to generate that power, with the difference funded by taxpayers. It does seem hard to justify.

However, Howard maintains that the naysayers’ concerns are “ill founded.” True, the rates seem high now, but he points out that the contract is over 20 years. By the end, he expects, that price will seem like a much better deal. “The price we pay for power is predicted to rise by 50 per cent in the next five years alone.”

The high rates will also be reviewed every two years and are widely expected to be reduced over time as the fledgling industry comes into its own. Pointing to Germany, a country with 145 times the solar generation capacity of Canada and with much less solar resource, Howard sees a model for development of the Canadian industry: “In Germany the price keeps coming down.”

Much of the debate about renewable energy in Ontario comes down to a central question: “At what price innovation?”

Tony Howard thinks the answer to that question is clear: “If we want to encourage renewable energy, we have to provide an incentive.”

Jeff Rollings is a writer in Orangeville.

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LET THE SUN SHINE IN, Solar energy gets personal
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About the Author More by Jeff Rollings

Jeff Rollings is a freelance writer living in Caledon.

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