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MESSAGE FROM THE CANADA’S SOLAR ELECTRICITY
PRESIDENT AND CHIEF INDUSTRY ROADMAP 2020 ACTION
EXECUTIVE OFFICER PLAN
Action 1: Stabilize the policy and
regulatory environment
Action 2: Simplify access to the grid
02
THE CANSIA VISION Action 3: Reduce soft costs
FOR CANADA’S SOLAR Action 4: Develop public awareness
ELECTRICITY INDUSTRY IN and education campaign
2020 Action 5: Enhance technology and
application enabler relationships
03 24
EXECUTIVE SUMMARY CONCLUSION
04 25
SOLAR ELECTRICITY – A
GLOBAL AND CANADIAN GLOSSARY
CONTEXT
ROADMAP 2020: POWERING CANADA’S FUTURE WITH SOLAR ELECTRICITY | Page 1
3
John Gorman
President and Chief Executive Officer
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In 2020
1 2
EXECUTIVE SUMMARY
Solar electricity is the smart choice for By 2020 solar electricity will:
Canada’s energy future.
SOLAR ELECTRICITY
– A GLOBAL AND
CANADIAN CONTEXT
ROADMAP 2020: POWERING CANADA’S FUTURE WITH SOLAR ELECTRICITY | Page 5
Globally, solar electricity has grown at a compound annual rate of nearly 50% for the past
decade. The International Electricity Agency (IEA) forecasts that by 2050, solar electricity could
account for 27% of the world’s energy mix. If the IEA’s forecast is accurate, solar electricity will
become the leading source of electricity worldwide1.
In Canada, growth in the solar Figure 1: Global Electricity Mix in 2011 and 2050 Forecast
electricity sector is rapid. In 2013,
100%
installations of solar electricity systems
grew by nearly 60% over the previous 90%
year, and the total value of the industry 80%
sales in 2013 was nearly $1.5 billion, 70%
up from just over $1 billion in 2012.2 60%
50%
The majority of Canada’s growth is 40%
centered in Ontario, where more than 30%
99% of Canada’s solar electricity is 20%
generated. Ontario has developed 10%
a globally recognized solar market 0%
sector. While it has experienced 2011 2050 Forecast*
challenges, it is today one of the
Solar Energy Other Renewable Energy Non-Renewable Energy
top 20 solar electricity markets in
the world, based on solar installed * High renewables scenario
capacity.
Source: International Energy Agency
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Megawatts (MW)
opportunities for renewable
projects, thus creating a 1500
green economy”3. As a result,
the province has gone from 1000
having virtually zero to almost 2
GW of installed solar electricity 500
capacity.
0
Other provinces have also taken
steps to support and grow the solar
market. For example, most provinces
have various types of grid connection
(e.g. net-metering) programs while a Source: International Energy Agency, CanmetENERGY & CanSIA
few provinces provide small financial
incentives to encourage solar
electricity installations.
BARRIERS SOLUTIONS
Develop a supportive and stable policy and
Unsupportive and unstable policy and regulatory regulatory environment that recognize the total value
environment of solar electricity, including externalities.
Simplify and streamline permitting and processes for
Confusing, slow and expensive electrical grid
grid interconnection and metering of solar electricity
interconnection requirements
systems.
High non-hardware costs (i.e. soft costs) of solar Reduce soft costs to levels consistent with global
electricity systems best practices.
Removing barriers will require the collective efforts of key stakeholders, including industry, utilities (e.g. electricity
distribution companies), energy and safety regulators, and all levels of governments including federal, provincial, territorial,
and municipal.
The challenges Canada faces in its solar electricity sector are common in countries around the world, particularly as global
markets reach a critical threshold. In Canada, this threshold is approaching quickly. In more mature markets, programs
and solutions have addressed barriers, and Canada is learning from these experiences and successes. Roadmap 2020
will enable industry and stakeholders to be better prepared to deal with challenges along the way. It will also ensure
Canada’s solar electricity industry is sustainable, while solar energy technologies are cost competitive with other
generation sources, without the need for subsidies.
ROADMAP 2020: POWERING CANADA’S FUTURE WITH SOLAR ELECTRICITY | Page 9
CASE STUDY 2
These factors led to a boom in new installations that saw solar rise from 8 GWh of production in 2007
to 378 GWh in 20138. However, the industry came to a crashing halt in late 2013 when Hawaiian
Electric Company (HECO) abruptly stopped approving residential solar grid-connected applications for
most communities on the island of Oahu. HECO claimed the grid was over-saturated with solar and
that further study and infrastructure upgrades were required to restart the interconnection process.
The sudden shift left thousands of consumers and investors stranded and caused large-scale lay-offs,
resulting in significant setbacks for the Hawaiian solar market9.
ROADMAP 2020: POWERING CANADA’S FUTURE WITH SOLAR ELECTRICITY | Page 15
70
60
Price per Watt (USD)
50
40
30
20
10
CASE STUDY 3
The U.S. Department of Energy`s SunShot Initiative In 2012, US soft costs accounted for
52% of the price of a large commercial
Figure 4: Total Electricity System Price in U.S.A., by Sector and System system at $2.10/W, 61% for a small
Size (First Half of 2012, in 2010 USD) commercial system at $3.01/W,
and 64% for a residential system
at $3.32/W. This is broken down in
$6.00 Figure 4 (in 2010 USD)11. These 2012
soft costs have remained virtually
Installation Labour
stable since 2010, while during the
$5.00
same period total hardware costs were
Permit
cut byFee
half.
$4.00
2010 USD
The SunShot
Transaction Initiative has established
Costs
$3.00 soft cost targets. They are:
$- Overall,Developer
Installer/ the objective is to make solar
Profit
2012 SunShot 2012 SunShot 2012 SunShot energy cost competitive with other
Goal Goal Goal forms of electricity by 2020 at $0.06/
Supply
kWh12.Chain Costs this goal, the DOE
To achieve
< 250 kW ≥ 250 kW is supporting activities led by private
Residential Commercial companies, academia, communities,
and national laboratories to drive
research, manufacturing, and market
solutions for solar energy.
Hardware Costs Installer/Developer PII
Profit
SunShot funding for soft costs
Total Soft Costs Indirect Corporate Permit Fee supports market transparency,
for SunShot Goals Costs workforce training, local solutions, and
Sales Tax (5%) Customer Acquisition Installation process improvements to make solar
Labour deployment faster, easier, and less
Supply Chain Costs Transaction Costs expensive. The program has been
successful in fostering collaboration
Source: Friedman et al between stakeholders and in lowering
costs for customer acquisition,
inspection, financing, installation, and
permitting13.
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Canada, led by CanSIA and the solar industry, will launch a program similar to SunShot to ensure solar electricity in
Canada is cost competitive on a stand-alone basis by 2020. This effort will require collaboration from a wide range of
stakeholders, as soft costs tend to be localized within jurisdictions. Stakeholders include:
Together with its members and other key industry players, CanSIA will actively lead this initiative by providing
data and participating in sponsored projects. By making soft cost reductions a priority, 2020 is a realistic
timeframe to achieve substantial reductions.
CanSIA’s initiative will be an effective and pragmatic response to addressing soft costs targeting and isolating
individual costs through separate unique projects, and focusing on small scale successes to develop solutions
for the broader market. CanSIA will reduce soft costs to levels consistent with global best practices. Initial steps
will be implemented to gather information and create a framework for further action. These steps are outlined in
the table below.
Step 2 - Benchmark soft cost information against best practices (By 2015)
Provincial and territorial baselines will be benchmarked against national and international
data points to target soft costs that can be improved in Canada and its regional jurisdictions.
This exercise will assist CanSIA and its partners to understand the potential scale of cost
savings opportunities.
Conclusion
Solar electricity is a proven and in developing and building solar together to realize the potential of
reliable source of energy today, while electricity projects. solar as a viable, cost effective and
at the same time having the potential sustainable choice for Canada’s energy
to be a ‘game changer’ and completely On the other hand, there are barriers mix, it will become the natural choice
revolutionize the energy system that must be overcome before Canada for individuals and businesses alike.
tomorrow. can benefit fully from the potential
that solar electricity offers. However, Roadmap 2020 provides the pathway
It is apparent that Canada’s solar the barriers are not insurmountable. to solidify solar electricity as a
electricity sector is a complex yet For each there are practical, workable mainstream energy source and an
very promising one. On the one hand, solutions—from creating a more integral part of Canada’s diversified
solar electricity has many appealing supportive and stable policy and electricity mix. This objective will not
attributes. Canadians love solar as it regulatory environment to educating happen of its own accord by 2020.
is abundant, clean, creates jobs, and Canadians about the value of solar To realize this vision, solar industry
is the fastest growing energy source electricity. participants and key stakeholders all
in the world. Furthermore, Canada have important roles to play.
has developed an emerging solar Canadians are making the transition
industry and market place which has from consumers to prosumers, and If we work together, we will not only
put Canada on the global solar map. it is clear that solar electricity is the power Canada’s electricity future with
The sector has seen rapid growth smart choice for Canada’s electricity solar energy, we will create a country,
and now boasts world-class leaders future. As industry, governments and and a world, that future generations will
in manufacturing, technology and other stakeholders work increasingly be proud to call home.
ROADMAP 2020: POWERING CANADA’S FUTURE WITH SOLAR ELECTRICITY | Page 25
GLOSSARY
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TERMS DESCRIPTION
Distributed solar Solar energy produced at or near the location that it is consumed.
Feed-in-Tariff A Feed-in-Tariff (FIT) is a policy mechanism that promotes renewable energy investments.
FITs are created and regulated by government. FITs consist of long-term agreements between
electricity producers and the local or national electricity utility whereby the producer receives
fixed payments in exchange for the energy they produce and feed into the power grid.
Net billing Allows producers of solar energy to use the power they generated and sell the excess energy.
The excess energy is sold to the utility company.
Net metering A method of compensating electricity consumers who use electricity produced by their solar
electricity system over a certain period of time. The compensation is typically a credit on the
consumer’s electricity bill.
Net zero building A building that creates as much energy on site as it consumes on an annual basis (also known
as a zero-energy building, zero net energy building, etc.).
Pay all, buy all Consumers who produce their own energy are paid for all the energy they produce, regardless
of whether they used it or fed it into the grid. The consumer then pays for all energy they
consumed, regardless of the source.
Peak shaving Reducing electrical power consumption during periods of maximum demand on the power grid.
Solar cost Solar produces electricity at or near the same levelized cost of electricity as other generation
competitiveness sources.
Utility scale solar Large-scale solar production that is sold to wholesale utility buyers rather than end-consumers.
ROADMAP 2020: POWERING CANADA’S FUTURE WITH SOLAR ELECTRICITY | Page 27
References
01
International Energy Agency (IEA). Technology Roadmap Solar Photovoltaic Energy, 2014 Edition.
02
IEA, CanmetENERGY & CanSIA. National Survey Report of PV Power Applications in Canada 2013.
03
Green Energy and Green Economy Act, 2009, Preamble, http://www.e-laws.gov.on.ca/html/source/statutes/english
/2009/elaws_src_s09012_e.htm
04
The International Monetary Fund (IMF). Energy Subsidy Reform: Lessons and Implications, January 28, 2013
05
Solar Energy Industries Association (SEIA). Solar Investment Tax Credit (ITC). Retrieved from http://www.seia.org/
policy/finance-tax/solar-investment-tax-credit
06
U.S. Department of Energy (DOE). Renewable Electricity Production Tax Credit (PTC). Retrieved from http://energy.
gov/savings/renewable-electricity-production-tax-credit-ptc
07
Wesoff, Eric. A Solar Permit Slowdown is Chilling Oahu’s Installed Market, Green Tech Media, June 12, 2014.
08
Hawaii State Energy Office. Hawaii Energy Facts & Figures, May 2014, State of Hawaii Department of Business,
Economic Development and Tourism.
09
Yost, Colin A. The Interconnection Nightmare in Hawaii and Why It Matters to the US Residential PV
Industry, Renewable Energy World, February 12, 2014.
10
The Economist. Sunny Uplands: Alternative energy will no longer be alternative. Retrieved from http://www.economist.
com/news/21566414-alternative-energy-will-no-longer-be-alternative-sunny-uplands
11
Friedman, B., et al. (2013). Benchmarking Non-Hardware Balance-of-System (Soft) Costs for U.S. PV Systems, Using a
Bottom-Up Approach and Installer Survey. Second Edition, NREL/TP-6A20-60412, October 2013.
12
Ardani, K et al. (2013). Non-Hardware (“Soft”) Cost-Reduction Roadmap for Residential and Small Commercial Solar
Photovoltaics, 2013-2020, NREL/TP-7A40-59155, NREL, Golden, CO, United States.
13
Solar Technologies Office, US DOE. SunShot Initiative, Tackling Challenges in Solar: 2014 Portfolio.
14
Artisan Research. January 2013.
15
Vote Solar. Vote Solar 2013 Annual Report
16
Retrieved from PowerStream website.
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