Is it Sunny Days Ahead for Solar Energy in Canada

1
Is it Sunny Days Ahead for Solar Energy in
Canada?

• Presentation to the CHA Conference - October
  2005
• Rob McMonagle Executive Director
• Canadian Solar Industries Association

2
Solar Myth 1Canada does not have enough
sunshine

• Cold does not mean a lack of sunshine

3
Canada Has The Solar Resource
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Solar Technologies

• Solar consists of a number of technologies and
  market niches
• Solar Electricity grid and off grid
• Solar Thermal
• Water Heating
• Pool Heating
• Air Heating Cooling
• Passive Heating

5
The photovoltaic effect

• PV converts electrons directly to electrical
  current
• Other technologies use mechanical
  methods (i.e. hydro, wind, nuclear)

6
PV Power is Modular

• PV systems are composed of arrays of solar
  modules
• A 1 kW or a 100 MW PV power plant uses the same
  basic building block

PV Cell PV Module PV Array
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Solar Energy Powerful, Proven Practical

• The amount of solar energy falling on 15 km2 in
  Canada equals the entire energy capacity of all
  the nuclear power plants in Canada
• Solar modules have no moving parts, no operating
  costs, require no maintenance, and have a life
  expectancy exceeding 25 years
• Energy 1 kW of PV produces 1,000 kW/year in
  Canada
• Capacity Rating 17
• Peak Demand Capacity Rating 62 at 99 of peak
  demand

8
Historical Price of Hydro Electricity

• Between 1915 - 1950 500 price reduction (5
  cent to 1 cent/kwh)

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PV - Sales Climbing Prices Dropping
10
The Price of Solar PV is Declining
20
1982
10
(4-fold reduction 1982-2000)
PV Module cost ( per Watt-peak)
5
2000
2
(est. 2-fold reduction 2000-2010)
1
1
10
100
1,000
10,000
100,000
source Shell Solar
Cumulative installed capacity (in MW)
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International Deployment of PV
78 On grid
Source IEA (www.iea-pvps.org)
12
Canadian Deployment of PV
3.5 On Grid
Source IEA (www.iea-pvps.org)
13
Canada Lags Other Nations
Installed Capacity in 2003
Canada - 14th of 20 reporting nations - Only 28
of the IEA average (0.28 v.s. 1.0
watts/capita) International growth was 36 in
2003 -
Canada growth rate is 20
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Comparing Austria to Ontario
Population Austria 8 million Canada 32 million
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The Fundamental Price Issue of Solar

• Solar is on the customers side of the meter
  thus it needs to be compared to the price of
  delivered electricity and not the cost of
  producing electricity
• PV has about the same premium price factor (3x)
  as wind they compete with other electricity
  generation on different sides of the meter

This is a fundamental point about PV and one
that is not well understood in Canada
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Understanding Electricity Prices
Energy 0.057 Taxes 0.006 Total 0.098
Hydro Ottawa (CAN /kWh)
Austria (Vienna) (CAN /kWh)
Energy 0.064 Taxes 0.077 Total 0.223
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The Advantage of Solar - Solar is a Peaking Power
Supply

• PV provides power during peak demand periods
  (very high correlation especially in summer
  peaking locations)
• Peak Power Capacity is gt60 at 99 of peak
• Varies depends on location in Canada and type of
  customers (demand of air conditioning)
• Solar and wind are complimentary
• wind peaks in winter solar peaks in summer
• Both need storage high value placed on hydro
• Value of peak power is high (Ontario was paying
  0.60/kwh this summer)

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Monthly Load vs Renewable Energy - PEI
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Daily Load vs Renewable Energy - PEI
Summer Months
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Distributed Energy Generation

• As solar is modular it is ideal for
  distributed generation
• Benefits of distributed power not
  well understood in Canada
• Although well documented in other
  countries
• Solar also has benefits to the electrical
  grid also not generally understood
  in Canada

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Quantifying the Benefits

• Four broad categories
• Avoiding investments in peaking power plants and
  operating those plants
• High correlation between utility peak demand and
  PV power production
• Improving the operation of the grid by reducing
  the losses associated with transmitting
  electricity
• Solar power is located at point of use thus
  line losses are avoided
• Deferring investments in upgrading and expanding
  the grid to meet growing demand
• Solar is mainly owned by the utility's customers
  thus opens up the opportunity to leverage
  customer investments
• Solar is one of the greenest energy sources
• Environmental benefits are beginning to be
  quantified

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Quantifying the Benefits
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Non-Quantified Benefits of Solar Power

• Broad public support
• Recent national opinion poll places solar 1st in
  public support (solar 92 wind 90 hydro
  82)
• Solar provides local voltage support
• Solar can reduce the need for operating and
  spinning reserves need to assure electric
  reliability
• Reduces the risk of forecasting due to the ease
  of deploying solar projects
• PV requires no Environmental Assessments
• 1 MW PV power plant can be operational within
  6-months of tender!
• Reduces financial risks
• Short development time, leverages customer
  financing
• Reduces risk of technological obsolesce
  reducing stranded costs
• No operational maintenance costs long life
  expectancy

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The Potential of PV on the Grid

• Potential Markets
• Residential
• Commercial/Industrial/Institutional
• Each are critical for the market to grow
• Large public buildings provides public
  exposure, builds confidence in technology by
  policy makers, allows utilities and designers to
  gain experience
• Residential has greatest potential as a first
  market based on international experience

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PV on Canadian Homes

• Canada 47 of all homes have the potential to
  install 3 kW PV array (9,000 MW now)
• By 2025 7.5 million homes in Canada will have
  the potential 21,000 MW or 21,000 GWh
• Limit is the sustainable growth of the industry
• CanSIA believes that 1,000,000 PV powered homes
  by 2025 is an achievable target (3,000 MW)
• In Canada 2 mechanisms
• Existing Homes Standard Offer Contracts
  (Feed-in Tariffs)
• New Homes - Net Zero Energy Home Initiative

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Feed In Tariffs for PV An International
Perspective

• Feed In Tariffs (Standard Offer Contracts) pay a
  premium rate for small distributed generation
  placing a quantified value to their benefits
• Feed In Tariffs were introduced by many nations
  in the 1990s
• Germany introduced Feed In Tariffs in 1992
• PEI Ontario has announced intentions to
  introduce Feed-In Tariffs

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Feed-in Tariff Rates in Other Countries
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PV Feed In Tariffs for Canada

• CanSIA proposes
• A feed-in tariff of 0.42 / kWh
• Program length of 10 years
• Contract length of 10 years
• Support level approximately 40 of system costs
• Benefit for the industry is the selling period
  not the contract length as the industry does
  not own the power plants (unlike wind, biomass,
  hydro)
• Rate needs to be set so that growth is
  sustainable overheating the market could
  create problems

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Net Zero Energy Homes

• Building homes that require no outside energy on
  average through a year
• Integrates on site power and heat generation with
  energy efficiency
• CMHC announced a target of 1500 net zero energy
  homes with 5 years
• Long term target all homes by 2030 to be built
  to this standard

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Communities as Solar Power Plants
Japan
1 MW community PV project on 500 houses in the
Netherlands
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Large Buildings - Building Integrated PV

• Reduces cost by 50 100
• Eliminates other building materials
• The building becomes the power supply

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And now for something completely different

• Some considerations of green heat

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Solar Hot Water Facts

• Solar Domestic Hot Water (SDHW) systems provide
  50 of the annual load
• Provides 100 of load during peak summer periods
• Typical SDHW system is 4-5 kWt
• Average installed price is 3,000 - 4,000
  (600-1,000 per kW)
• Water heating accounts for 25 of a homeowners
  energy demand (all other non-space heating
  electrical loads are 25)
• In Ontario there are 400,000 homes with electric
  water heaters (varies in other provinces)
• SDHW is an effective DSM measure energy
  efficiency can only go so far

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Solar Hot Water Austria Canada
Annual Sales
Austria
Canada
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Time to Think Outside the Box

• Creating new business models for utilities

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How Can Utilities of Today Become the Energy
Providers of Tomorrow?

• The future of energy supplies will have
  distributed, customer owned energy generators as
  a major component
• Major changes coming on how energy is sold and
  purchased
• Green power has greater value than dirty or
  gray power is this an opportunity?
• Solar peak power (owned by its customers) allows
  the utility to sell its peak power where its
  needed
• Great interest is the thermal utility selling
  of energy from solar hot water system
• Providing financing for customers who want to
  produce their own energy

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Solar Huge Potential

• Solar Technologies (PV and SDHW) have huge
  potential for electrical energy generation and
  reduction in demand
• Base is small so impact of solar is not immediate
• Impact begins in the 2015-2025 period. By 2025
  solar technologies could be providing 25 million
  mega-watt hours of energy.
• Need to begin building the infrastructure and
  capacity now
• Waiting for solar to be ready to make a
  difference delays the time when solar will be
  able to make a difference

For more information on CanSIAs solar plan for
Canada see Sunny Days Ahead 25 million
megawatt hours by 2025 available at www.cansia.ca
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Solar The Timing is Right

• Reason for success is there is public acceptance
  consumers are willing to pay for solar energy
  as a societal benefit
• Priming the market now means that solar PV will
  be prepared to contribute in 2015-2025 period
  when its price will be competitive
• SDHW is competitive now it needs to be
  accounted for using the correct financial model
  the solar utility
• Time is right for Canada to go down this path

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Solar Forum 2005 The World of Solar

• CanSIAs Annual Conference
• November 3-5, 2005
• Ottawa
• www.cansia.ca

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Contacts

• Rob McMonagle (Executive Director)
• Canadian Solar Industries Association (CanSIA)
• 2378 Holly Lane, Suite 208
• Ottawa, ON K1V 7P1
• 1-866-522-6742
• rmcmonagle_at_cansia.ca