Monday, October 25, 2010

Update on Ontario Solar Market

A recent study conducted by independent research firm, ClearSky Advisors, reveals that Ontario’s economy is on its way to having one of the ten strongest solar markets in the world. Propelled by the province’s Green Energy Act and its progressive feed-in tariff (FIT) program, Ontario, the study shows, will likely have 3GW of installed solar power by 2015. However, the research also reveals a number of weaknesses that Ontario must overcome if its economy is to reach its full potential.

While the study makes little mention of the province's shortage of solar energy training programs or workforce numbers, demand for solar modules is projected to exceed supply by next year, particularly due to FIT requirements mandating that up to 50% of participating projects’ labour and materials be sourced in Ontario. This number goes up to 60% in 2011. The study warns that this may drive up prices, which have otherwise fallen in Europe and North Americaover the last few years. One contributing factor is “lack of long-term market visibility,” which hinders investment in manufacturing. A looming provincial election also leads to uncertainty, since a change in office could potentially spell the end of the FIT program.

High Prices for Clean Energy Encourage Solar Manufacturing and Training

The Ontario FIT program pays producers of renewable energy premium rates to feed electricity into the province’s power grid from solar, wind, and other “green” sources. The domestic content requirements of the FIT have increased investment in the economy, particularly in PV manufacturing and solar installation training. While a change in Ontario’s Premier in 2011 would likely have little impact on 20-year projects already approved for the program, it could potentially put an end to future subsidization of renewable energy installations.

Although the ClearSky study reveals potential weaknesses in the Ontario solar economy and the FIT, it nonetheless confirms that the province is a leader in the pursuit of renewable energy alternatives and that it is doing its part to transition to more sustainable methods of meeting local, national, and global energy needs.

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