Government Department Urges PV Incentive in Canada

The Canadian government should educate its citizens on the potential value of solar photovoltaic systems, and consider an incentive for residential PV rooftop systems.

VARENNES, Quebec, CA, 2002-01-22 [SolarAccess.com] Launching an incentive by 2005 “could be a means to stimulate domestic market growth in the field and facilitate wider use of PV in Canada,” says a report from the CANMET Energy Diversification Research Laboratory of the Department of Natural Resources Canada. The report shows that such an initiative would cost Cdn$7 to $28 per tonne of CO2 emissions that are displaced compared with the use of conventional energy fuels. “Global emissions of carbon dioxide, methane and other greenhouse gases into the earth’s atmosphere are altering the climate with potentially dire consequences,” says lead author Josef Ayoub. “Photovoltaic systems avoid expensive investments in large central power stations and in transmission and distribution systems, provide greater reliability, and leave a lighter ecological footprint.” Commercial and residential buildings account for 30 percent of total energy in Canada and half of its electricity, notes the report. There are seven million detached homes in Canada, consuming 62 TWh of electricity at a cost of $6 billion. If a 30 m2 PV array were to be installed on a typical roof, it would supply 4,000 kWh, or 45 percent of the electrical load. “While costs of PV have been falling at about 5 percent per year in real terms over the past 20 years following a well-established learning curve, it still remains an expensive technology,” adds Lisa Dignard-Bailey of the NRCan lab. “The study addresses the question of how can costs go down to the point where solar power can compete in the mass market for power, and identifies several key barriers that must be addressed before greater inroads can be made in Canada in this market segment.” A PV system would generate surplus electricity in the summer but would have a deficit in winter, although the seasonal and day-evening variation would not be a problem if the utilities allowed net metering. A combination of an aggressive PV program, with energy-efficient lights and appliances, “has the potential to meet all the electricity needs in residential housing.” “As the cost of photovoltaics comes down and as Canada addresses the problems associated with climate change, the barriers to the wider deployment of photovoltaics in Canada must be removed,” notes the report, which presents an action plan to accelerate the widespread use of PV throughout Canada. There are 430,000 commercial and institutional buildings in Canada with 517 million square meters of floor area, which consume 100 TWh a year of electricity (excluding space and water conditioning) at a cost of $10 billion. An energy efficient building could install a PV rooftop system to supply 65 percent of its demand on an annual basis. If south-facing façades were fitted with PV panels, the solar system would meet 100 percent of electrical load. “Integration of PV into buildings offers benefits beyond cost savings,” explains the report. “The aesthetics of the building can be improved by integrating photovoltaic modules into the building façade instead of rack mounting the modules on the roof or on the ground.” More than 1,000 MW of PV has been installed around the world during the past 25 years, half of it within the last four years when the market experienced average annual growth rates of 26 percent and continued cost reductions. The breakeven point for sales of PV modules would be reached as cumulative production reaches 300 GW and the break-even point for current PV technology to compete with electricity generation in Canada, based on lowest production cost, will be reached in the 2020-2030 timeframe. “The growing experience base in conjunction with the technological improvements from the R&D labs leading to higher photovoltaic module efficiencies is expected to lead to significant cost reductions and large scale use of photovoltaics,” notes the report. Each kilowatt of PV has the potential to offset 1.58 tonnes of CO2 a year when replacing coal, 1.30 tonnes when replacing oil, or 0.73 tonnes when replacing natural gas. The NRCan report models an incentive program for homes in Toronto and Edmonton that runs for 15 years, and found that 51,490 systems would be installed with total capacity of 36.5 MWp. The total incentive would be $8.5 million, with private investment of $108 million and 0.46 MT of CO2 displaced by the PV systems over their life. The incentive includes an emissions credit of $6.90/tonne in Edmonton and $28.20/tonne in Toronto. Total job creation in the service and manufacturing industries was 800 jobs. “While wide implementation of solar energy as an option to slow greenhouse gas emissions is a long-term investment, limited deployment of photovoltaics is essential to drive the economies of scale of manufacturing so that significant CO2 offsets can occur,” concludes the report. Based on two years of consultations, the report recommends that the Canadian government seek research funding to accelerate the development of PV products for integration into buildings for the purpose of making Canadian products available, and install demonstrations of grid-connected on-site generation on buildings using PV technology. It should also remove both technical and non-technical barriers to the deployment of PV in buildings, and educate Canadians on the potential and value of PV in Canada by raising public awareness through demonstration activities such as building-integrated PV systems on educational facilities. Government should “consider the replicability in Canada of a residential ‘early adopters’ PV rooftop deployment initiative such as those in Japan, Germany, the Netherlands and the U.S. by 2005” which would stimulate domestic market growth and facilitate wider use of PV in Canada. Photovoltaics is a US$2.2 billion annual business that is projected to grow at rates exceeding 15 percent per year for the next 30 years. “Hundreds of PV manufacturing plants will be required to meet world demand as experience renders this option cost competitive,” it notes. “Renewable energy sources are expected to play a significant role in the energy supply mix of the global energy economy of the near future. The deregulation of the Canadian electricity markets, the commitments to Kyoto and the growing market opportunities of renewable energy technologies, especially for photovoltaics, provide additional reasons for Canada to act now.” The CANMET Laboratory is responsible for Canada’s solar PV activities.

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