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Greening Canada by Tapping Into the “Solar Gold Rush”. By Tim Murphy Presented to: Solar Gigawatts Location: Munich, Germany Date: May 28, 2009. Overview. Solar in Canada Federal incentives Ontario Incentives by other provincial and municipal governments

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Greening canada by tapping into the solar gold rush
Greening Canada by TappingInto the “Solar Gold Rush”

  • By Tim Murphy

  • Presented to: Solar Gigawatts

  • Location: Munich, Germany

  • Date: May 28, 2009


Overview
Overview

  • Solar in Canada

  • Federal incentives

  • Ontario

  • Incentives by other provincial and municipal governments

  • Roadblocks to solar energy in Canada


Introduction solar in canada
Introduction: Solar in Canada

  • Canada’s solar resources

    • More solar potential than Germany (a world leader in solar energy deployment)

    • “PV hotspots” such as Regina, Saskatchewan (Yearly PV potential of 1,361 kWh/kW)

    • Cold weather increases PV efficiency

  • Resources have been underdeveloped

    • Criticized by groups such as Green Cross International and the David Suzuki Foundation


  • Federal incentives
    Federal Incentives

    • ecoEnergy programs

      • Renewable Power program

        • $1.48 billion investment to increase renewable energy sources

        • Goal: produce 14.3 terrawatt hours

        • Open to businesses, municipalities, and institutions

      • Renewable Heat

        • $36 million investment

        • Encourage industry and commercial businesses to install solar heating systems


    Federal incentives cont d
    Federal Incentives (cont’d)

    • ecoEnergy programs

      • Retrofit program

        • Grants for making energy efficient upgrades to properties

        • Upgrades must be recommended by certified adviser

        • Residential: up to $5,000

        • Commercial: lessor of: (a) $10/GJ of savings; (b) 25% of cost; or (c) $50,000

        • Industrial: lessor of (a) $10/GJ of savings; (b) 25% of cost; or (c) amount to reduce net simple payback to no less than 12 months


    Federal incentives cont d1
    Federal Incentives (cont’d)

    • Tax incentives

      • Accelerated Capital Cost Allowance (CCA)

        • 50% deduction on cost of renewable energy generation equipment (acquired after February 23, 2005)

        • Certain intangible project start-up expenses qualify (feasibility studies, engineering and design work)

    • Canadian Renewable and Conservation Expense (CRCE)

      • Deduction for certain expenses related to getting project started (e.g. access road, clearing land, service connection, engineering) as long as at least 50% of expenses fall within category of qualifying equipment

      • Does not include most payments to non-residents, administrative and management expenses, land acquisition, depreciable capital property

      • Advantage of CRCE is ability to transfer benefit directly to shareholders through flow through share structure


    Ontario
    Ontario

    • Most populous province

    • Integrated Power System Plan (“IPSP”)

      • Ontario Energy Board (“OEB) approval

    • Supply Mix Directive: June, 2006 directive to the Ontario Power Authority (“OPA”)

    • Conservation measures to reduce peak demand 6,300 MW by 2025, including:

      • Solar heating

      • Small scale (10 MW or less) customer-based electricity generation

      • Generation encouraged by net metering

    • Increase renewable energy by 2,700MW by 2010 and 15,700 by 2025


    Ontario cont d
    Ontario (cont’d)

    • Renewable Energy Standard Offer Program (“RESOP”)

      • Launched November 2006

      • First initiative of its kind in North America

      • Features:

        • Simplified eligibility and contracting

        • Standard rates paid for grid-delivered energy

        • Available only to projects under 10 MW

      • Rates

        • Most technologies: base rate of 11.08 cents/kWh (20% indexed to for inflation) plus reliability premium of 3.52 cents/kWh

        • Solar PV: 42 cents/kWh

      • Project put on hold due to overwhelming response

        • 290 contracted PV projects, but most may never come online


    Ontario cont d1
    Ontario (cont’d)

    • Green Energy and Green Economy Act, 2009 (“GEA”)

      • Introduced February 23, 2009

      • Will amend 20 other Acts (including energy, real estate, planning and environmental legislation)

      • Measures include:

        • Feed-in tariff (the “FIT”)

        • Streamlined project approval process

        • Right to connect

        • Province-wide renewable energy standards

        • “Smart grid”

        • Financial incentive (e.g. low interest loans for small scale projects)


    Ontario cont d2
    Ontario (cont’d)

    • FIT

      • Replaces RESOP

      • First feed-in tariff of its kind in North America

      • Expected to launch June 2009

      • Renewable producers receive set price for energy fed into grid over a 20-year contract (40 years for water power)

      • Fears that program will raise electricity prices


    Ontario cont d fit rates
    Ontario(cont’d)Fit Rates


    Ontario cont d3
    Ontario (cont’d)

    • “Smart grid”

      • Provisions in GEA provide for its development

      • Defined as “advanced information exchange system and equipment”

      • Will allow for greater integration of renewables into energy supply mix


    Ontario cont d4
    Ontario (cont’d)

    • Incentives outside of the GEA

      • Ontario Solar Thermal Heating Incentive

        • $14.4 million program to entice industrial, commercial and institutional sector to install qualifying solar thermal heating equipment

      • Net metering

        • Credits consumers for energy they contribute to the grid; reduces electricity bills

        • Available for projects under 500 kW

        • Similar to programs offered in other provinces, such as Quebec, Saskatchewan, Manitoba, P.E.I. and Nova Scotia

      • Tax incentives

        • Rebate on provincial sales tax (8%) paid on solar equipment

        • Similar to rebates in other provinces, such as B.C.


    Provinces and municipalities
    Provinces and Municipalities

    • Alberta

      • No provincial PV incentives

      • 20 municipalities in the Alberta Solar Municipal Showcase

        • Provides funding for grid-connected PV installed on municipal buildings

        • Funded by the municipalities and the Federation of Canadian Municipalities

    • British Columbia (B.C.)

      • Released BC Energy Plan in 2007

        • Goal: achieve zero greenhouse gas emissions


    Provinces and municipalities cont d
    Provinces and Municipalities (cont’d)

    • Programs in B.C.

      • Standing offer program

        • B.C. Hydro purchases energy from small projects (0.05 – 10 MW)

        • Features simplified process

        • Rate is lower than Ontario’s RESOP

      • 100,000 Roofs

        • Goal: install solar water heaters on 100,000 roofs by 2020

        • Participants can receive up to 36% of the cost

        • progress was slow due to lack of installers

      • Innovative Clean Energy Fund

        • $25 million/year levy on sales of conventional energy

        • Funds provided to renewable energy projects to decrease technical application costs

      • Solar Communities

        • Seven communities in B.C. selected to be SolarBC Communities

        • Each receives $20,000 plus marketing, training and policy development assistance for solar energy projects


    Provinces and municipalities cont d1
    Provinces and Municipalities (cont’d)

    • New Brunswick

      • Embedded Generation tariff program

        • Producers are paid 9.445 cents/kWh fed into grid

        • Available for projects between 100kW to 3,000 kW

    • Northwest Territories

      • Alternative Energy Technologies Program

        • Provides funding to develop renewable energy projects; communities (half the cost up to $50,000/year), businesses (1/3 the cost up to $15,000/year) and homeowners (1/3 the cost up to $5,000/year)

    • Quebec

      • Net metering program

    • City of Toronto

      • Municipal government’s Sustainable Energy Funds

        • $62 million funds provide interest-free loans for renewable energy projects in the municipal, academic, social services or health sectors


    Roadblocks
    Roadblocks

    • Cost

      • More financial and tax incentives required to decrease capital and operational/management costs

        • e.g. Ontario’s RESOP and FIT

  • Targets

    • No federal solar targets

    • 88 MW target in Ontario too low considering potential

      • it is hoped that the GEA and the soon to be updated IPSP will address this problem

  • Caps

    • Decrease potential of incentives (e.g. Ontario’s net metering program limited to projects under 500 kW)


  • Roadblocks cont d
    Roadblocks (cont’d)

    • Connectivity

      • No grid priority for solar power

      • Inconsistency in connection costs and procedures

      • GEA should eliminate some of these problems in Ontario by making the following amendments to the Electricity Act, 1998:

        • Priority connection

        • Mandating time limit for connection assessments

        • Making the connection assessment process more transparent

  • Administrative Deficiencies

    • Delays during the planning and zoning phase for projects

      • Addressed by GEA’s amendments to the Planning Act

    • Application process can be cumbersome

      • Streamlined under GEA

    • Some programs are difficult to access; discourages involvement for projects under 1,000 kW

    • Proposed FIT lottery


  • Questions answers
    Questions & Answers

    4364786


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