SNL Power Week West November 26, 2007

Authorities in Ontario, together with Canadian federal agencies, have combined to put in place incentives designed to make the province North America’s leader in developing solar power.

Currently, more than 100 contracts are in place for potential solar projects. These range from residential systems to large-scale “solar farms” capable of powering thousands of homes.

The provincial government has established a target of installing 100,000 solar roofs across Ontario. With backing in place through a federally supported thermal heating incentive program, 25% of the cost of purchasing and installing solar hot water or air-heating systems is becoming an increasingly attractive option. In the commercial and institutional sectors, up to 10% of energy use is consumed for water heating and 50% for space heating, in the case of Ontario, the Ontario Ministry of Energy said.

For space heating, savings from solar heating can approach as much as 50% of a facilities’ heating load demand.

Four demonstration projects are currently under way in Quebec and Ontario, backed by federal funding channeled through a research network based at Montreal’s Concordia University.

But for the solar power industry to gain a stronger foothold in the country, it is essential that electricity – courtesy of the sun – be properly priced, says Kerry Adler, head of wind energy development at SkyPower Corp., in Toronto.

Currently, under Ontario’s standard offer program available to solar developers, the power authority pays 42 Canadian cents per kWh for electricity – four times more than is paid to wind energy generators and about seven times what residential customers pay for power.

Adler, according to a Nov. 20 article in the Toronto Globe and Mail, told a solar energy conference in Toronto Nov. 19 that for solar farms to be economic, a price of about 50 Canadian cents per kWh is required, while roofing systems only become economical at about 60 Canadian cents per kWh.

European countries where solar power projects are thriving are heavily subsidized by governments.

Meanwhile, SkyPower, one of whose investors is U.S. merchant banker Lehman Brothers Holdings Inc., is keen to pursue solar power project development, yet is concerned about complications resulting from onerous procedures for obtaining development permits.

Unlike European countries such as Germany and Spain, governments in North America have been reluctant,  by and large, to offer strong investment incentives for large-scale solar farm development.

Among public authorities in Canada that have been attracted to the possibility of solar energy technologies are the Quebec government’s energy efficiency agency and the city of Toronto.

One Ontario firm, Waterloo-based Arise Technologies Corp., which has its eye on international markets as well as Canada , has begun construction of a plant in Germany to manufacture solar cells, and is being backed in part by a C$68 million credit line. Arise is diversified in that it intends to refine silicon and install solar systems as well.

Meanwhile, the Ontario government has announced a program to pay grants of up to C$80,000 to businesses that install solar water or space heating systems, through a C$14.4 million rebate program.

The Ontario government has set a target of 100,000 solar roofs being built province wide.