The Solar Energy Market in Canada
The solar energy industry is having rapid growth in Canada.
Notably, solar energy in the country has been 20%, which totals 1,804 MW. The largest solar facility is the Loyalist Solar Project with 54 MW capacity, which is undergoing construction in Ontario.
Canada has substantial solar energy resources due to its vast area. So far, the most valuable resources have been found in Alberta, Manitoba, Ontario, and Saskatchewan.
The latitude of Canada, however, causes a relatively low-level of solar irradiance (solar power per unit area). This reason, along with cloud cover, results in a 6% capacity factor, which is much lower compared to a 15% capacity factor in the United States.
The northern territories in the country have a relatively lower solar potential and get less direct sunlight due to their even higher latitude. According to the National Energy Board’s prediction, solar electricity will account for 1.2% of Canada’s total energy by 2040.
Fig.1: State-wise Solar Energy Capacity in Canada (Source: energyhub.org)
Particularly, the solar electricity market has grown quite fast. Since 2013; nearly 2,000 MW of capacity has been added in Canada.
Fig.2: Solar Electricity Capacity in Canada (Source: cansia.ca)
Currently, more than 98% of Canada’s solar power generation capacity is in Ontario, as the province has developed a solar market that is recognized in the world.
In fact, globally, Ontario is one of the top 20 solar electricity markets based on solar installation capacity.
Commercial Viability of Solar Energy in Canada
A recent report by the Canadian Solar Industries Association (CanSIA), Solar Vision 2020, has looked into various scenarios for commercial use of solar technology. Commercially, the adoption of solar technology has not been as expected.
The surge in the commercial solar sector in Canada over the coming decade will depend on a wide range of variables such as financial support to technology, costs, and infrastructure requirements.
If all the plans fall into place, solar energy may account for 20% of the new electricity supply source in the next 20 years.
As mentioned earlier in this post, the efficiency and competitiveness of solar power generation in Canada depends on its geographic location. It is because the power price range can vary widely between the 10 provinces and the three territories, according to a report by the Canadian National Energy Board.
The local electricity prices largely determine the competitiveness of solar power in a province than the amount of sunlight received. This factor remains static even if local breakeven prices are among the lowest in the country.
Fig.3: Solar Energy Incentives in different Canadian provinces (Source: energyhub.org)
An example of how pricing can vary shows in residential energy charges, which may range from CA$0.068/kWh in Quebec, to $0.167/kWh in Saskatchewan. The reason being the cost in each province related to production or import power, transmitting the energy across large areas, and eventually distributing to residential customers are drastically different.
When it comes to residential solar breakevens, Alberta province has the lowest in Canada. However, because of its current low power prices, it makes more financial sense for the province to purchase electricity from a solar distributor than deploying a solar project.
Among other regions, the Northwest Territory and Nunavut have competitive solar breakevens compared with relatively high local electricity prices. The pricing has been high as it is expensive to produce electricity in remote areas that depend on diesel.
The rating of solar panels is typically based on their peak power output, which means the maximum amount of power that solar panels can produce under ideal conditions.
It also depends on the size of the panels, and the size is between 250 and 400 Watts for most commercially available panels. A higher power rating of the panel indicates that you will need fewer panels to offset your energy usage.
Overall, Canada has a bright future ahead when it comes to solar energy. According to the National Energy Board, solar energy has the potential to become a more valuable option. Particularly, in the likely scenario when the energy pricing can be 19.1% higher than current prices in 10 years, and 47.75% costlier than current prices in 25 years.
Canadian Solar Industry compared with the Global Growth
In the global context, currently, solar electricity is the fastest-growing energy source.
According to a forecast by the International Energy Agency (IEA), that by 2050, solar electricity could account for 27% of the global electricity mix. Thus it may become the largest source of electricity in the world.
According to CanSIA, solar electricity is likely to be a mainstream energy source in Canada as part of the country’s diversified electricity mix.
By 2020, solar electricity in Canada is expected to:
- Produce nearly 1% of the total electricity generation, with having almost 6,300 megawatts (MW) of installed capacity.
- Create roughly 65,000 jobs annually, employing a labour force of nearly 10,000 people per year. The primary sectors of employment will be construction, manufacturing, operations, and maintenance.
- Reduce nearly 1.5 million tonnes of greenhouse gas (GHG) emissions annually, which is equivalent to removing 250,000 cars and trucks off the road every year.
The solar electricity industry can be sustainable and commercially viable without direct subsidies and operating in a supportive environment and with favourable regulatory policy.
Worldwide vs. Canada: Capacity of Solar PV – 505 GW (in 2018)
Fig 4: Canada’s Solar Capacity compared with the top nations (Source: www.nrcan.gc.ca)
Compared with the leading solar energy-producing countries in the world, currently, Canada does not have any solar electricity policy at the federal level. By rolling out a favourable federal solar electricity policy can provide excellent opportunities to Canada’s solar energy industry.
A solar electricity policy, if implemented, could create a framework to open up new markets all over Canada. The foundation will be even more consolidated with the implementation of provincial /territorial solar policy to support the federal policy.
Solar PV in Canada
Currently, Canada is among the top 10 countries globally in terms of having a total installed solar PV. The country’s solar capacity is estimated to reach around 2GW very soon.
Recently, Canada has added nearly 444MW of PV, which about a 58% increase compared to the growth in 2012. It is also a cumulative growth of 1.2GW, which is double the capacity compared to previous years, and the extremely low solar capacity of 33MW in 2009.
As mentioned earlier, most of the solar capacity in Canada is centred in Ontario. In 2018, the capacity of the Canadian solar photovoltaic industry was 3,040 MW.
Fig 5: Installed Capacity of Solar PV – Canada (Source: nrcan.gc.ca)
Among other provinces, British Columbia is set to have the largest PV plant. The international contractor, Conergy, will manage the SunMine project in Kimberley with the capacity of 1.05MW.
Also, solar energy is making its way into the minor markets in Canada. Manitoba and Saskatchewan both have implemented solar net metering programs. The capacity of the program in Manitoba will be 10MW. Net metering is aLso available in New Brunswick, Nova Scotia, and Prince Edward Island.
There are major success stories like the small town Raymond in southern Alberta being 100% solar reliant.
Also, solar PV is reaching to rural and remote areas. For example, in Vancouver Island, BC, the T’Sou-ke First Nation aboriginal community that began building solar PV in 2009, has now more than 400 rooftop PV solar panels. It is the largest instance of solar installation in the province, which during the peak operation, can produce up to 90% of the total community’s power.
Solar PV Installers in Canada
The Directory of Solar Companies in Canada has listed 836 solar installers in the country. These companies undertake solar panel installation, including standalone and rooftop solar systems.
The solar installations are both on-grid and off-grid. On-Grid Systems are solar PV systems that can produce power only when they are connected to the utility power grid.
Off-grid systems, on the other hand, allow to store solar energy in solar batteries for later use if the utility power grid does not function or someone is not operating the grid.
The statistics below show the demand for solar photovoltaic (PV) power in Canada between 2009 to 2014, along with a forecast for 2015 to 2020.
Fig 6: Demand Forecast for Solar PV in Canada – 2009 to 2020 (Source: statista.com)
Related article: Top Solar Statistics You Need to Know in 2019
Currently, in Canada, remote off-grid solar systems are seeing moderate growth. However, it can be a viable market by bringing about incentives. As of now, the solar market in the country looks more like a small market segment.
If we talk about grid-connected solar PV, there is a long way to go before becoming cost-competitive compared to other renewable energy options. However, micro-grids that are using multiple energy sources, including solar PV offer positive growth options. Particularly, in remote regions, micro-grids can be cost-competitive with current energy supplies.
Related article: Solar Power Statistics in the USA 2019
Since the early days, Sumit has been deeply concerning for the climate crisis and always felt hurt seeing how the human intervention is disrupting the ecological balance. He 100% believes that solar energy is the missing puzzle to our energy transition, and we have to go all out to implement this energy solution all over the world.