CanSIA Calls for Dramatic Growth of Solar PV in Ontario Through Higher Tariffs

Paul Gipe, Contributing Writer
January 23, 2009 | 18 Comments

In a much anticipated -- and long awaited -- release, the Canadian Solar Industries Association (CanSIA) has publicly called on the Ontario government to increase the tariffs for solar photovoltaics and boost their expectations of what solar can do in the province.

In a series of presentations in late 2008, including a presentation to Ontario's Ministry of Energy and Infrastructure, CanSIA offered its vision of what solar PV could do in Ontario and how best to get there. Titled "Solar PV in Ontario: A Roadmap for Success," CanSIA proposed two approaches for a rapid increase in solar development: solar for export to the grid, and solar for distributed applications. Each approach, or market, would be subdivided by project size much like the differentiated tariffs for solar PV in Germany and France.

Equally significant is CanSIA's bold suggestion that solar PV alone make up 10% of Ontario's electricity supply by 2025. Such a contribution, about 16 TWh per year, would require the installation of 16,000 MW of solar PV under Ontario's climatic conditions, making CanSIA's proposal the most aggressive in North America. In achieving this objective, CanSIA estimates that Ontario could create as many as 19,000 new jobs in the province.

For comparison, California's Solar Initiative is limited to 3,000 MW.

The province has a long ways to go. There are only 500 kW of solar PV currently in operation despite the more than 500 MW of contracts executed under Ontario's groundbreaking Standard Offer Contract program. CanSIA notes that if all the existing contracts were fulfilled, solar PV would still only provide 0.5 percent of Ontario's electricity.

By 2025 CanSIA suggests that 300,000 residential rooftop PV systems could be in place alongside another 100,000 installations on commercial buildings.

To drive development CanSIA suggests a range of feed-in tariffs to encompass the different applications and different size projects it envisions. For example, CanSIA suggests that a payment of a range of values from $0.42 CAD/kWh on the low end for 10 MW plants to as much as $0.70 for generation from solar PV at plants 250 kW in size. For smaller commercial projects in the hundreds of kilowatts, tariffs up to $0.70 CAD/kWh will be necessary, according to CanSIA's chart (below). Residential and small commercial rooftop solar installations will need from $0.70 CAD/kWh to as much as $0.80 CAD/kWh for rapid deployment. There are no tax subsidies that reduce the upfront cost of solar PV in Canada or in Ontario.

The public release of the presentations by CanSIA marks a new, bolder, and more assertive trade association. Previously, CanSIA was reluctant to go public with the tariffs needed for the industry to grow rapidly enough to be taken seriously by provincial utility planners.

In early 2005, the Ontario Sustainable Energy Association (OSEA), in consultation with stakeholders from Ontario's small solar PV industry, estimated that a tariff of $0.83 CAD/kWh was needed for residential rooftop solar to be sufficiently profitable to drive rapid growth.

CanSIA proposed instead a tariff of $0.42 CAD/kWh or one-half the OSEA suggested tariff as a placeholder for solar PV in the new Ontario program.

In mid 2007, OSEA re-examined solar PV tariffs in the province, and concluded that $0.80 CAD/kWh was still needed for small systems less than 10 kW in size and suggested that tariffs $0.75 CAD/kWh to $0.42 CAD/kWh should be paid on a sliding scale for projects from 10 kW to 10 MW in size.

The Ontario Ministry of Energy is widely expected to introduce a Green Energy Act in this session of parliament. Though the details of the Ministry's proposal remain unknown, a Green Energy Act drafted by a consortium of environmental groups, including OSEA, contains an extensive revision of the province's Standard Offer Contract program.

Such a contribution, about 16 TWh per year, would require the installation of 16,000 MW of solar PV under Ontario's climatic conditions, making CanSIA's proposal the most aggressive in North America.

18 Comments

Gregory Lang
February 2, 2009

Steven; I'm offended. (comment #11)
I'm offended by your failure to read what I wrote...
" The maintenance and operation of a nuclear facility - ignoring the nuclear waste - produces an equivalent amount of CO2 as is emitted from a coal plant. " which is factual.
I'm also offended by your attributing to me what you call "hyperbole" - have you read any studies on the Full life Cycle Cost of Energy? Perhaps the german economic analysis of delivered energy costs that underpinned their decision to go with renewables would be a good starting point.

Every properly managed business will consider and plan for the deterioration of it's property and its access to raw materials. The silo of nuclear power where it is thought to be a good thing that only the nano-second of energy generation is clean is of the same shortsighted and ill-considered logic where capital and economic considerations are bounded by the walls of ones own enterprise - "econopia" - perhaps being the source of the current global economic crisis.

The current battle is to alter the thought process of governments and tired old players in industries that have no future. Once they open their eyes and their accounting practices it will be all too clear that a combination of RE modes are the most rational way forward and that maximizing the distributed nature of these energy installation saves more money - never mind saving the environment.

Each kilowatt hour is in human terms not equal. The inequality has to be measured at consumption not production and include all of the costs. A kWh employed to operate hospital equipment has a greater value than one consumed watching tv (unless the World Cup is on). Notwithstanding most governements failure to "see the light" and ask the right questions and seek the right answers, they are more responsible for keeping the hospital equipment operational than they are for caring about how they do that, though it will soon be the case that they care about both.

Steven Mielke
January 29, 2009

Vern writes in comment #16:
"... It is not about the money !!"

Here I have to disagree--subsidies are always about money. If a private citizen wishes to buy an inefficient solar system with their own money and site it in a cloudy low-insolation environment, that is one thing, but when someone else has to pay for it, it is quite a different matter.

With currently available technology wind (among other things) is a much better investment for renewable energy generation than solar is. This is especially true in Canada where the large amount of dispatchable hydro power should allow for easy inclusion of intermittent generation sources.

The notion that paying massive subsidies for solar PV now will one day lead to affordable solar power seems deeply flawed.

Vern Sherwood
January 29, 2009

Steven, Of course solar is expensive, but over time the price will decrease when compared to the cost of many other fuels. If you consider that the average consumer could invest in a solar energy system to cut there dependance on the grid and take control of there own power consumption as well as become close to independent of the utility, then the utilities could sell there power to manufacturers and large users at a price that lets them make a profit. It is not for everyone, but for the people who can afford it, it is a guilt free way to make there contribution to a cleaner world rather than a new Range Rover or BMW. Most pro solar consumers buy to power there homes and cottages in a non polluting way. It is not about the money !!

Steven Mielke
January 28, 2009

In Comment #13 an article titled "A better way" is hyped. This article refers to energy delivered via transmission lines as "an antiquated approach." Presumably the people of NYC will disagree because even if 100% of the surface area of the city was covered in solar cells it would not provide sufficient energy to meet their needs. I am guessing that they will prefer transmission lines rather than living in the dark.

The article also displays a very strong anti-wind bias; perhaps this is because wind power is substantially more affordable than solar PV....

Steven Mielke
January 28, 2009

In comment #13 the author uses terms such as "success models" and "already working" that are vaguely defined--probably intentionally. If some countries lavishly spend on the current generation of inefficient and ultra expensive solar panels, then naturally installations will increase in those areas. If you have a short term goal of making money from selling and installing solar panels, then massive subsidies are clearly "already working" for you if you live in one of those areas. If our goals are to mitigate the damage of global warming as efficiently and effectively as possible, or to foster the development of affordable solar energy products, or to promote the development of a robust and efficient energy generation system that does not rely on fossil fuels, there is scant evident that subsidy programs are the way to go--and plenty of reasons to think they are actively harmful.

Anyone who thinks of Germany's having produced 0.7% of its electricity from solar power in 2008--after years of massive subsidies--as a success story must be totally unaware of the scope of the problems ahead in converting to renewable technologies. Squandering resources on implementation of inefficient schemes rather than researching better ones is not going to save the environment--although it might make a few solar investors happy in the short term.

Alliance for Responsible Energy Policy
January 28, 2009

Thank you Paul for another informative article. Once again you make the point that we need to emulate the success models that countries like Germany are experiencing. Unfortunately some still continue to deny what is already working.

AREP wrote an article "The Better Way" which was recently published in the Sierra Club Desert Report. In it we advocate for the same policy changes you endorse here. After defining the incredible results of FIT and financing policy in Germany, CA SC regional director Carl Zichella still continues to deny the data.

Those who say a point of use PV model jumpstarted by FIT's and access to loans cannot work, need to know they are too late with that argument - it already is! All we need to do is allow it here.

"The Better Way" article is posted on http://www.allianceforresponsibleenergypolicy.com

Steven Mielke
January 28, 2009

In comment #10 Rich writes: "With all due respect, the current cost of solar is $0.21 / kWh according to Solarbuzz.com"

It should be carefully noted that this price is for industrial size installations in sunny climates (such as AZ), and even then neglects certain other costs. The price Solarbuzz.com quotes for an industrial sized system in a cloudy climate (which is closer to Canada's climate) is 47 cents/kWh and residential units are quoted as 82 cents/kWh. These are very high prices compared to wind, geothermal, new hydro, nuclear, etc. Why would anyone want to overpay by such large multiples?

Regarding Rich's comments on subsidies, when measured on a per kWh basis, the US government subsidy for coal or nuclear is less than 1 cent/kWh, which is much less than the subsidies for renewable technologies even if one neglects R&D funding.

Steven Mielke
January 28, 2009

In comment #9 Gregory Lang writes:
"Nuclear power costing in excess of $1.50 per kilowatt hour. (down from more than $10 that these studies typically conclude) The maintenance and operation of a nuclear facility - ignoring the nuclear waste - produces an equivalent amount of CO2 as is emitted from a coal plant."

It seems to me that Gregory views hyperbole as so useful that it trumps the truth. Nuclear generated electricity is typically sold in the US to residential users at ~ 0.10 US dollars/kWh by private companies that earn profits. Commercial uses pay even less. He does not cite these "studies" that rate the cost as $1.5 to $10. per kWh, doubtless because he knows how flimsy such estimates are.

As to his belief that nuclear power plants emit as much CO2 as coal plants this is bizarre and entirely untrue. There is no CO2 emitted from the fission process.

Rich L
January 28, 2009

Steven: With all due respect, the current cost of solar is $0.21 / kWh according to Solarbuzz.com. Anything more than that is meant as an incentive to encourage early adopters. As volumes of scales increase and technologies improve the gap towards parity closes and we will eventually no longer need such high incentives.

By removing any socialization of nuclear power (much like the $15 billion subsidies on the US oil and gas sectors) we will see the gap close from the other end. Carbon taxes as many have been discussing will provide the same disincentive on coal and natural gas fired electricity. Whether we remove socialization on nuclear or tax carbon the net effect is a carrot and stick approach. In the end we need to know what true costs of various technologies are, not the socialized price at the plug or pump.

Rich

Gregory Lang
January 28, 2009

It amazes me that anyone still holds to the falsehood that nuclear power is inexpensive or a clean energy. Full life cycle costing of energy from all sources has been undertaken by a variety of groups and individuals, and a critical analysis of their models, leading to a reduction of their final number to something more conservative and realistic still leaves Nuclear power costing in excess of $1.50 per kilowatt hour. (down from more than $10 that these studies typically conclude) The maintenance and operation of a nuclear facility - ignoring the nuclear waste - produces an equivalent amount of CO2 as is emitted from a coal plant.

In my meetings with the Ontario Government I recommended variable rates for the feed in tariff that would consider the business model of the entity and a metric of system size, micro, small, large etc., that would be considerate of impact on the grid. I expect that the green Act will address and adopt both of these recommendations. The first because it would provide institutions and government organisations the opportunity to invest in RE even within a zero-based budget framework and the second because it automatically includes the conservation element of distributed generation.

A RE kWh produced AND consumed on site is currently worth twice as much as a delivered kWh from the grid (reverse engineer an Ontario Hydro bill to see this) - this also led me to recommend that all connections be behind the meter thereby minimizing the impact on the distribution system.

The entirety of my recommendations and their rationale are too complex to mention here but they included the suggestion that the distributed generator be paid for the RE (by my calculation 58 cents minimum) and then given it for free to consume and that excess energy be given to the LDC for free as well. This recommendation is specifically designed to inspire LDCs to want and financially support bigger micro distributed generation facilities across the province.

Steven Mielke
January 27, 2009

In comment #7 it was written: "every state in the US should provide loan funding and generous feed in tariffs to property owners willing to do the right thing by producing more clean energy than they use."

This is a strange notion. The cause of preservation of the environment is not favored by squandering money on ineffective technology.

stop killin our wilderness
January 27, 2009

this is great, and 80 cents accurately reflects the SAVINGS to the ratepayer that are created when massive Big Solar, Big Wind, Big Coal and Big Transmission boondoggles destroy millions of acres of our wilderness, emit huge amounts of GHGs in their construction and maintenance, force families from their land, and bleed us dry with their monopolies.

every state in the US should provide loan funding and generous feed in tariffs to property owners willing to do the right thing by producing more clean energy than they use. no dead ecosystems, no GHGs (yep, Big Solar, Big Wind and Big Transmission are all GHG spewers, especially the powerlines!), no monopolies - just regular people getting paid for doing the right thing.

i don't know about you, but my bill goes up every time Sempra manipulates the supplies of gas (oops, sorry to bring up your $360 million fine for that), SCE wants to own more remote generation capacity, and PG & E decides to externalize a few billion more bucks onto ratepayers and the environment by centralizing the generation that is much more efficiently and environmentally soundly located at point of use.

so, no, i wouldn't mind if my bill went up instead to pay a neighbor for sparing our intact ecosystems from total destruction. no, i wouldn't mind if i were creating hundreds of thousands more jobs, improving millions of property values, and engaging everyone in the new era of REAL renewable energy.

bring it on! we want it in CALIFORNIA, where the cautionary tale of steroid's negative effects on intelligence and environmental ethics can be seen from miles away. we need a REAL solution, not another Big Energy Boondoggle like Schwarzenegger is trying to shove down our throats.

Steven Mielke
January 26, 2009

In comment #5 Rich L. wonders as to the "true cost" of nuclear power if one includes accident risks, waste storage, etc. There have been many studies on these matters and one would be hard pressed to find a responsible study that comes anywhere near $0.42 kWh. These solar costs are totally unaffordable. People in China, India, and other developing countries won't be willing or able to pay such prices so anyone worried about global warming should be looking for a path to affordable options. Nuclear energy, for all its inconveniences, is one of these options.

Rich L
January 26, 2009

Steven wrote: "Additionally, if the concern is over global warming, nuclear power is also an affordable and reasonable option for new near-term electricity generation."

First of all, let's repeal any Nuclear Liability laws. Then we need to find an insurance company that is willing to fully cover a nuclear plant. Premiums need to be tailored to the potential risks for the 30 or so year life of the plant. Anyone know what all the land and buildings in the fallout zone around Pickering Nuclear is worth? Add to that the cost of keeping all that nuclear waste safe for even the next 50 years. Are there any special tax breaks they get? Pile all those socialized costs onto the $ 0.055 per kWh Ontarians currently pay for electricity and then tell me how affordable nuclear is.

Rich

Steven Mielke
January 24, 2009

In comment #3 Joseph writes "$.42/KWH is a small price in comparison to the environmental damage being caused by converting oil shale into useable oil. "

It should be noted that increased electricity generation will not reduce the demand for liquid fuels used in the transportation sector at all; thus, this is an irrelevant comparison. Other renewable methods such as wind or hydro as dramatically cheaper than solar PV so I can't imagine why anyone other than the solar industry insiders would want to overpay for electricity by such vast amounts. Additionally, if the concern is over global warming, nuclear power is also an affordable and reasonable option for new near-term electricity generation.

If the goal was strictly to promote the most efficient adoption of solar PV, the government would put additional money into R&D because the current products are not remotely economical for anything other than off-grid generation.

Mortimer Shnerdlyfrump
January 24, 2009

$.42/KWH is a small price in comparison to the environmental damage being caused by converting oil shale into useable oil. The U.S. imports about 3 million barrels/day of oil from Canada (converted from shale).

The faster alternatives can be incentivized to grow thoughout the world (even at high subsidy costs), the cheaper will our energy be in the long haul (it costs billions to repair extensive environmental damage).

Wesley Johnston
January 23, 2009

Paul Gipe has done another great job of promoting solar energy in Canada and the rest of the world. Thanks for the article.

Just to clarify, in this article Paul states "CanSIA suggests that the current payment of $0.42 CAD/kWh for generation from solar PV be maintained for multimegawatt, central-station projects."

In the roadmap CanSIA actually proposes a range for the price of large scale solar PV projects ($0.42 CAD/kWh - $0.70 CAD/kWh) to allow the new Ontario RESOP designers to consider new factors such as exchange rates, financing rates, etc. when determining the new rate (see roadmap page 6 - link provided above). With current economic conditions it will require a higher tariff rate than $0.42 CAD/kWh to make projects economically viable in Ontario.

CanSIA sees proposal as being more than just an renewable energy roadmap but can also serve as part of a larger economic stimulus initiative for Ontario to create jobs and get the economy moving again.

By the way, it is not well known but all major Canadian cities actually have greater solar resources than Germany.

Wes Johnston
CanSIA Director of Policy and Research

Steven Mielke
January 23, 2009

Naturally, if you have a technology that cannot possibly compete with other generation methods you would want to appeal to the government for massive subsidies. $0.42 CAD/kWh for rooftop solar is a ghastly high rate to force on the public--especially given that lots of those rooftop systems will be covered in snow during the winter.... Hopefully the Ontario government places this proposal in the "circular file" where it belongs....

Add Your Comments

To add your comments you must sign-in or create a free account.

Paul Gipe

Paul Gipe has written extensively about renewable energy for both the popular and trade press. He has also lectured widely on wind energy and how to minimize its impact on the environment and the communities of which it is a part. For his...