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Canada Needs a National Solar Policy

By Jared Donald, President, Conergy Canada
February 17, 2012 | 4 Comments

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Edmonton, Canada -- The solar industry has worked diligently over the last year to inform and educate the Canadian public and the federal government on the environmental and economic benefits of solar energy. As part of these efforts, representatives and members from the Canadian Solar Industries Association (CanSIA) met with the Department of Finance and Natural Resources to discuss a national incentive structure. In addition, CanSIA representatives stood as witnesses before the Senate Standing Committee on Energy and the Environment, presenting the benefits of solar PV for Canadians. These efforts were instrumental in garnering recommendations for the furthering of solar technology on a national level in the most recent Report of the Standing Committee on Finance. While the industry has made tremendous strides in the Canadian market in the past year, there is still significant work to be done and each province faces different challenges.

Without a national incentive structure, some provincial governments have developed policy infrastructures to support the deployment of solar within their respective provinces. In Ontario, the implementation of the feed-in tariff (FiT) and microFiT programs has increased employment and brought in local manufacturing. Ontario’s solar industry supports approximately 8,200 full-time jobs and more than 30 PV module and inverter manufacturing facilities. Through the FiT program’s first two years it faced a number of implementation challenges, mostly due to a lack of visibility and an inability of contract offers to keep pace with applications. The government has recently halted the program while it reviews how FiTs should be administered in 2012 and beyond.

Through this review Ontario requested that CanSIA, as the trusted voice in the solar industry, provide feedback outlining how the program can be improved. CanSIA members developed very specific and practical recommendations for presentation to the government. I believe that these actionable recommendations and the many in-person consultations between industry proponents and Provincial government representatives will significantly improve the design of the FiT programme for longer-term sustainability. One of the main improvements we hope to see in the new FiT programme is greater transparency, which will help all members of the value chain.

While Ontario’s solar incentive policies are far ahead of those of other provinces, the aforementioned FiT review process is having a detrimental impact on its industry. Most installers and manufacturers are in a holding pattern until the new rules are determined and released, causing layoffs across the industry and requiring solar professionals to either take extended vacations or search for new employment outside the industry. The work being done at the government and regulatory level appears to be occurring in a manner that will allow the development of a more sustainable FiT program, but until the policy framework is resolved the industry will remain in a very challenging state of flux.

Each province is at a different state in terms of solar energy implementation and each has very different goals, influenced by politics, economics and other considerations. Without a nationally administered solar energy directive, each province will continue to develop and administer its own policies in accordance with its own political, economic and environmental goals. This evolutionary development will greatly assist the growth of the solar industry in Canada, but it will occur in a slower and more fragmented manner.

The Ontario programme proved that FiTs are a very effective mechanism for creating market demand, but they are only one of many tools that support the effective growth of solar energy. It is hoped that jurisdictions outside Ontario take notice of the benefits the FiT program has generated for that province and implement funding programs with the same end goal: to further bolster the solar industry across Canada.

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4 Reader Comments

Comment
1 of 4

shepdaddy

February 21, 2012

A national solar program sounds like a good idea, and it wll help our Federal government with their image as they have put Canada on the world stage for being one of the worst polluters on the planet. It would also help solar manufacturers and distributors justify their huge investments in setting up shop in Ontario. So many installers are suffering right now as the Ontario government tries to figure out what to do next. It's really silly that each province should need to design their own program from scratch when there is a very successful model in Germany that we should be adapting.

Comment
2 of 4

Ruth_Cooper

February 27, 2012

Allowing each province to administer and develop its own policy including determination of the most effective mechanisms for market demand stimulation may well be the best approach.

Each province has its own electrical generation source mix, resource availability/suitability/abundance, infrastructural stengths/weakness, socio-economic constraints, etc. Attempting to create a one size fits all National Solar program may result in one that fits none.

Ontario is leading the way for the other provinces. Hopefully their policies will be based on Ontario's program revised to include improvements based on our lessons learned and taylored to meet the unique needs,conditions, and demographics of the municipalities under their jurisdiction.

That said, I am all for National, if not international standards, regulations, certifications, etc. for both system components and system design & installation services.

Comment
3 of 4

vineland_ca

March 2, 2012

Nice article, Jared.

In theory, a national solar policy in Canada sounds great. However, given that energy policy is developed and administered at the provincial level in Canada, this proposal would be difficult to implement without a review of how energy policy is implemented. In the end, it's likely that support from a majority of provinces to place energy policy administration with the federal govt would be needed, prior to a vote in the House of Commons and then perhaps rubber stamped by Canada's unelected Senate.

Of course, one of the exceptions that energy policy falls in provincial jurisdiction is the federal govt's continued subsidization of companies operating in Alberta's tar sands. Such companies continue to receive tax breaks amounting to ~$1.5-$2B annually - from personal experience, the actual figure is very difficult to obtain. This at a time when Canadians are paying record high gasoline prices, and oil companies are making record profits. Obama was right when he recently urged an end to oil company subsidies.

I agree with Ruth_Cooper that each province has different energy mix, resource availability, infrastructure, etc. At the present time, the federal govt can support solar in Canada the same way they support the tar sands - through the tax code. Canadians should demand that energy subsidies are either provided fairly and equally to the various energy sectors (nuclear, coal, solar, wind, etc) or eliminated altogether. Right now subsidies to the tar sands dwarf those provided to solar. The provinces are in the driver's seat when it comes to implementing incentive programs whether they be FIT like Ontario, SRECs in the US or other mechanisms. It makes sense to implement programs that have set objectives over a clearly specified time period (MIN 4 years) that encourage investment in manufacturing and job creation, but that also help to offset fossil fuel based energy sources to meet carbon emission reduction goals.

Comment
4 of 4

Ruth_Cooper

March 3, 2012

Jared, Thanks for providing the fantastic article facilitating discussion on these important matters.

Vineland, Thanks for pointing out that Energy Policy creation is currently a provincial responsibility. This would definitely complicate the development and implementation/administration of a National Policy.

On the matter of federal subsidies: Yes, I would be very interested in greater transparency on allocation policy. How is it decided how much to provide and to whom for what 'greater good'?

I cynically assume that it's primarily proportional to the estimation of the undertakings associated GDP contribution.

I recently learned about a new way of looking at the 'perceived value' of initiatives through Social Return On Investment (SROI) vs. ROI estimation, leading to a more holistic evaluation of an opportunity, including it's sustainability. Hope this type of thinking helps us as we move forward.

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