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Photovoltaics in Canada: Ontario

Area: 1,076,395 km2
Population
: 13.5 million
Installed Photovoltaics
: 289 MW (2011)

Ontario has a clear lead in Canada’s solar photovoltaic (PV) industry and is even one of the leaders within North America. Approximately 91% of Canada’s 289 MW of PV was installed in Ontario alone, in 2011. Ontario is a leader in Canada’s renewable energy race due to its various procurement programs. These programs have all lead to increases in solar energy investment. It also helps that southern Ontario has one of the greatest solar resources in Canada.

Green Energy and Green Economy Act

In May 2009, Ontario’s government passed the Green Energy and Green Economy Act (GEA). Its main goals are to:

– Promote growth in renewable energy production such as  solar, wind, and biomass;
– Encourage energy conservation through savings and well-managed household energy expenditures;
– Create 50,000 jobs for people in Ontario within its first three years.

Ontario is one of the leaders of solar energy in North America. iStockphoto.com©xyno

The GEA promotes energy conservation and attempts to build an economy based on clean energy. This act makes energy efficiency a key part of Ontario’s building codes and creates energy efficiency standards for household appliances. It also works with local electricity utilities to achieve energy conservation targets. Nevertheless, the GEA has been surrounded by some controversy as it demands a certain amount of labour and manufacturing to be done within Ontario in order to receive the tariffs. Ultimately, the GEA is part of Ontario’s effort to protect the environment and prevent climate change.

Ontario’s Feed-in Tariff Programs

One of the GEA’s most prominent features is its Feed-in Tariff (FIT) Program that acts to support its goals. In October 2009, the Renewable Energy Standard Offer Program (RESOP) was replaced by Ontario’s FIT program. RESOP was an incentive offered through the Ontario Power Authority (OPA) which enabled small-scale energy producers to sell their renewable power to the grid at a fixed price.

The FIT program offers a guaranteed funding structure through competitive pricing and long-term contracts for energy that come from renewable sources. Cansia, a national trade organization for Canadian solar companies, stated that FIT is the, “…single largest climate change initiative in North America.” Eligible electricity generators can sign a contract with OPA to sell energy produced by a renewable energy source and receive a fixed amount per kilowatt hour for 20 years. The FIT program is designated for larger solar projects while the microFIT program is intended for installations with a 10 kilowatt capacity or less (ie. homeowners, farmers, and small business owners). The tariff rates are reviewed annually and have decreased since its establishment. As of April 5, 2012, the FIT and microFIT rates are as follows in Table 1. A significant number of PV projects have been installed since FIT was introduced; Table 2 indicates the number of contracts and FIT applications in kilowatts. Approximately 75% of FIT projects are ground-mounted. This program also enabled one of the largest solar parks in the world to be built in Sarnia, Ontario at 97MW.

Table 1. Tariff rates for solar photovoltaic installations for FIT and microFIT program as of April 5, 2012.

Fuel

Project Size

Price (cent/kWh)

Solar Rooftop ≤10kW

54.9

>10 kW ≤100 kW

54.8

>100 kW ≤500 kW

53.9

>500 kW

48.7

Solar Groundmount ≤10 kW

44.5

>10 kW ≤500 kW

38.8

>500 kW ≤5MW

35.0

>5MW

34.7

Table 2. FIT contracts and large FIT applications as of January 31, 2013 (kW for contracts and applications).

Energy Type

Total Contracts (kW)

Existing Applications (kW)

Solar (rooftop)

250,722

63,864

Solar (ground-mounted)

938,571

3,786,710

Net Metering

Like most other provinces in Canada, Ontario has a net metering program available for those generating their own power through a renewable source. This program enables consumers to be paid for any excess electricity that is produced. The consumer connects to a distribution company that will read the meter and receive a credit for the excess power being supplied to the grid. Only generator facilities with less than 500 kilowatts are included in this program

Ontario’s Future

A shift in electricity supply in Ontario is expected in the near future. By 2030, 70% of electricity generation must occur in new or refurbished facilities. The demand for electricity will also increase, regardless of energy conservation measures. Ontario has developed the Long-Term Energy Plan (LTEP) to accommodate the change in Ontario’s energy supply and demand. LTEP calls for the majority of energy produced to switch to different sources such as solar and wind power. Solar PV is expected to contribute 1.5% of total generation by 2030. Ontario’s decision to phase out coal-generated energy by 2014 has also been revolutionary in promoting the move towards renewable energy. Ontario’s programs have attracted a significant amount of private investors towards the PV market. Its PV market is expected to generate $12.9 billion of total private investments by 2018.

Series in Photovoltaics in Canada
1. Photovoltaics in Canada – Introduction
2. Ontario

Source: Cansia, Ontario Power of Authority

 

American Utilities Predict Their Own Downfall

It has been predicted that solar power may be a significant hindrance on the electric utility industry… by an electric utility company. In January, a report that went fairly unnoticed by the media was published by the Edison Electric Institute (EEI). The EEI is an association of American share-holder owned electric power companies. The report predicts that as more customers opt for distributed energy resources (DER), specifically photovoltaics (PV), the US electric utility industry could be destroyed. A similar situation has already occurred in Germany and now the US is predicting the same downfall.

American Utility Background

The electrical utility industry is an old system that has been mostly unchanged since its establishment. There are two main types of utilities:

1. Regulated monopolies that generate electricity in a power plant and then sell and provide it to consumers through the power lines within their service area.

2. Deregulated utilities manage a grid that consumers are connected to. However, it is separate from power generation plants so they must buy energy from the market and then provide it to consumers through their grid.

PV energy is causing the slow destruction of American utilities. iStockphoto.com©Richard Schmidt-Zuper

A utility first has to present its case to the public utility commission (PUC) by stating how much electricity they have to produce (or purchase) based on consumer demand for electricity as well as the rates they want to charge for the power. When the PUC accepts their rates, they also guarantee the utility a reasonable return on power investments and grid upkeep.

The electricity utility business model is quite an old and accustomed one. It relies on high demand for electricity and selling this electricity to make a profit. With higher demand for electricity, investments also increase and thus, lead to greater profits for utility shareholders.

Essentially, utilities thrive as they sell more power which could lead them to oppose energy efficiency and demand response programs such as incentives to lower electricity use during peak hours. The ability for solar power to be at its strongest close to peak times also affects utilities’ profit-making mechanisms. PV systems on residential and commercially-owned rooftops are not owned by the utilities so power produced by the PV (or any other DER) is not being returned to the utility as profit. Rather, each kilowatt produced by PV energy is reducing demand for utility produced energy. Power during peak hours are the most expensive and utilities can generate the most profit during this time. Yet, as solar also reaches its maximum near this time, it takes away much of the profit utilities could be making during the peak hours.

Vicious cycle downwards

Normally, the cost of investment and maintaining the grid are placed on ratepayers within the service areas. However, as consumers start to opt out of the grid and produce energy independently, the costs will be placed on a smaller group of ratepayers. When this occurs, the rate for the remaining ratepayers increases and damages the utility’s credit rating. As the rate increases, consumers will switch to DERs such as PV energy. The EEI forecasted up to 20% increase of rates for people without solar energy. This is a vicious positive feed-back cycle that could change how utilities function in America. Solar energy is directly interfering their profit mechanisms, however, utility investors seem to be paying little attention to this issue.

The inevitable changes in a fairly old business model were also compared to the changes experienced by some companies like Kodak and the US Post. However, unlike most companies, electricity utilities are unaccustomed to constant changes in the market and have benefited from a fairly untouched market until now. The EEI report discusses ways to avoid these issues mostly by revising their own tariff structures and by planning for “disruptive challenges” like PV. EEI presents measures to maintain the old business model and the utilities. However, is that what consumers also want or will we soon see the downfall of a possibly outdated industry?

Sources: Grist, Edison Electric Institute

Obama presents US budget for 2014

 

Last Wednesday President Obama presented his budget for fiscal year 2014.

The Dept. of Energy (DOE) was awarded 28.4 billion in discretionary funds, an 8% increase from last year, to position the US as a world leader in “clean energy and advanced manufacturing” among other goals. 153 million were awarded to R&D for grid modernization efforts.

Obama & Jeffrey Zients, Office of Management and Budget

Other highlights include 6.5 million specifically earmarked to promote and decrease costs of renewable energy, an overall 40% increase in the DOE’s “clean energy technology activities”, and a move to make the production tax credit (PTC) permanent.

Finally, 4 billion in unnecessary oil, gas and coal subsidies have been eliminated from the budget. Cuts of this magnitude have been proposed every year Obama has been in office, and ignored by congress each time. With any luck, fiscal year 2014 holds something different in store…

The budget in its entirety can be downloaded and viewed here.

Additionally, the Senate Committee on Energy and Natural Resources will hold a hearing on the DOE’s portion of the budget this Thursday, April 18th, 10am EST. The webcast can be viewed here.

Solar Energy is a Finally a Net Energy Producer

There has always been somewhat of an unsaid irony that so much fossil-fuel emitting energy is required to create solar panels, a fossil-fuel free energy source. Recently, research from Standford University has found that the amount of clean energy produced from already installed solar panels is finally exceeding the amount of energy that was required to manufacture the panels.

There are high energy costs to purify silicon.

The amount of solar energy produced from all solar sources such as residential, industrial, and commercial, was compared to the energetic costs of manufacturing and installing PV systems as well as the costs required to maintain the systems. Michael Dale, a postdoctoral fellow from Stanford’s Global Climate Energy Project (GCEP) estimated that the world will reach net energy benefit by 2015 and at latest, 2020. Just five years ago, the manufacturing process was using 75% more energy than it actually produced. That value has decreased immensely due to continually increasing efficiency in the production of solar cells.

The manufacturing process of a solar panel can be heavily energy intensive. Approximately 90% of solar modules on the market are silicon-based. To extract silicon, silica rock must be melted at over 1500°C, often using coal-fired plants. Afterwards, the pure silicon must be melted again to obtain a crystalline structure, with an average purity of 99.9999%. Nevertheless, technology has improved and the process of making a solar cell has become more efficient. Thinner silicon wafers and less highly refined material for silicon feedstock are now used, while less expensive material is being lost throughout manufacturing process. The use of other elements for solar thin films such as copper, zinc, tin, and carbon can also be improved. The energy required to produce solar panels will likely continue to decrease over time.

The solar industry is still aiming primarily at reducing financial costs rather than energetic costs but there are several ways to reduce the latter. An easy solution is to place more PV installations in regions with greater solar resources. Using less material or switching to panels that have lower energy costs than silicon cells are also viable options. Other existing cells based on cadmium telluride and copper indium gallium diselenide can be also used. Together with silicon cells, these solar cells make up over 99% of the current market. Overall, Dale forsees a decline in the energy costs to manufacture panels, more durable panels, and more efficient conversion of sunlight with new technologies. Net energy production measurements should be taken into account in current and future renewable technologies to produce effective energy solutions. GCEP is also looking to apply these measurements to storage technologies and wind energy.

You can also see Stanford’s video on this topic

Source: Phys.org; Environmental Science and Technology

Warren Buffett and Solar PV

Buffett has an uncanny reputation for winning financial bets on undervalued markets. So when the Buffett-backed MidAmerican Renewables exploded onto the market in 2012, investors took notice.

Buffett and US-President Obama

Where Buffett invests, markets follow

The company bought three major solar PV projects totaling approximately 1,420MW in California and Arizona, and managed to do so at ideal stages of development. Not too risky – yet still early enough to come at a deep discount – these solar investments mesh seamlessly with the “buy and hold” strategy which has made Buffett’s Berkshire Hathaway the success it is today.

While environmental concerns play a role for many investors choosing renewables, rest assured that Berkshire-Hathaway is looking straight to the back page on this move. Buffett has famously stated that the deregulation of the energy industry will be the largest recorded transfer of wealth in history. Previously insufficient performance data on operational thin-film and polycrystalline modules has been cited as the factor preventing involvement until now.

Regarding next moves, while MidAmerican Renewables has looked abroad (primarily Chile and the Middle East), it is most likely to continue investing in US markets first, especially in the south-east (Georgia & Tennessee). Accordingly, future project sizes will be much smaller than the 300MW+ behemoths purchased during this most recent round.

What’s the bottom line? Green. Solar is powering both kinds.

Source: renewableenergyworld.com

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