Ontario is on its way to becoming a major centre for solar power, and will soon see thousands of solar panels spread out over acres of land, feeding clean power into the power grid.
Year-end numbers show an explosion of interest in building solar generating systems, from individuals who want to put a few panels on their roof, to businesses investing in huge solar farms.
In 2007 the Ontario Power Authority signed 145 contracts for the future construction of more than 250 megawatts (MW) of solar power systems, far more than the agency initially projected. Each megawatt can power about 350 homes.
If all those who have promised to install panels follow through with their plans, Ontario will have some of the biggest solar farms on the planet, and an important "green" industry will be kick-started in the province.
Still, the solar-power generation business is essentially starting from scratch. At year-end only an infinitesimal 0.3 MW of sun-generated energy was being sold to Ontario's power grid. The biggest completed project so far is a series of panels on the roof of the horse barn at the Canadian National Exhibition in Toronto.
Even if all the current projects come to completion there will be far less solar power generated in the province than wind power. And Ontario won't even come close to the world's biggest solar player - Germany - which has more than 3,000 MW of solar power projects already in place.
The spate of solar contracts in Ontario is a result of efforts to boost the industry by paying a steep premium for power generated by the sun.
The deals fall under Ontario's "standard offer" program - the only one of its kind in Canada - which guarantees a set price over 20 years for alternative energy the province buys.
Ontario pays 42 cents a kilowatt-hour for solar-generated electricity, roughly seven times the price for conventional power, and almost four times what it pays for electricity generated by wind or biomass projects
The response to the offer has been "pleasing," said Ontario Power Authority spokesman Tim Taylor, especially since the OPA initially projected that only 40 MW of solar power would be in place in the coming 20 years.
However, Mr. Taylor noted that the contracts are just that - contracts - and they may not all come to fruition. If a project has not been built within three years of a contract being signed, the deal is dead.
Many contracts have been signed with individuals and community groups who plan to sell the province small amounts of power from tiny rooftop installations. But the vast majority of the solar power on the drawing board comes from three large developers that are planning substantial ground-level solar farms.
The three key developers are:
OptiSolar Farms Canada Inc., which has signed contracts to build 150 MW worth of solar farms in Southwestern Ontario, and has plans to add about 50 MW more to its portfolio. The company, a subsidiary of California-based OptiSolar Inc., plans to break ground this spring on its first 20 MW project on about 500 acres of land just outside Sarnia.
Pod Generating Group of Sault Ste. Marie, is planning to install 60 MW of solar panels near Sault Ste. Marie in Northern Ontario, an investment worth about $360-million. The company was founded by aerospace engineer Glen Martin, who once worked on building the power modules for the International Space Station. Pod also hopes to begin building this year.
SkyPower Corp., the Toronto-based wind power developer whose chairman is former CIBC World Markets boss David Kassie, signed contracts in 2007 to supply 30 MW of solar power to Ontario, and it added another 40 MW this month. It is working in partnership with California-based SunEdison LLC. SkyPower chief executive officer Kerry Adler is among those who say higher payments for solar-produced power are needed if the industry is to thrive.
Solar farms built at ground level should get around 50 cents per kilowatt-hour for their power to make them worthwhile investments, while rooftop systems only become economical at around 60 cents, he said.
Others think an even higher price is justified. A study conducted for the Ontario Sustainable Energy Association recommended an 80 cents per kilowatt-hour price for solar, in order to spur the industry and move Ontario in the direction of generating all its power from renewable sources.
Mr. Adler said the 42-cents rate means his company's planned projects will be just "borderline" in terms of profit.
Not everyone in the industry thinks a higher price is justified to light a fire under the solar industry Peter Carrie, vice-president of OptiSolar, said he feels the current price is sufficient to encourage the building of solar projects. "We think 42 cents works quite well for project investors," he said.
Big solar projects have the advantage of requiring fewer municipal approvals than wind farms, although permits are required and zoning issues still pop up.
And there is sometimes resistance from neighbours. Mr. Carrie said OptiSolar is now in discussions with residents who live near its first project in Sarnia, to work out what kind of fence to build around the site, what vegetation will be used to screen it, and to inform them of how much sound the installation will generate.
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GERMANY'S SOLAR SUCCESS
Ontario's "standard offer" program, which pays small power producers a set price for solar energy far above market rates, is similar to the incentive program that turned Germany into the world's biggest producer of energy from the sun.
In Germany, anyone who wants to connect solar panels to the power grid is paid a "feed-in tariff" of about 49 cents (U.S.) a kilowatt-hour, far more than the everyday price of electricity.
The program has been extremely successful, and Germany is now installing more than 1,000 megawatts of new solar power every year. Already, there are more than 300,000 separate solar installations in the country.
These kinds of incentives are more important than having a lot of sunshine, said Glen Martin, president of Pod Generating Group, which is building solar farms in Northern Ontario.
Germany has 30-per-cent less solar energy landing on it than Ontario, yet it has the most installed solar power in the world and is the leader in solar technology, he said. There are about 50,000 jobs in the solar sector in Germany.
Because Ontario has adopted similar policies, "in a couple of years ... Ontario will be in a very strong position in solar expertise," Mr. Martin said.
Declining prices for solar panels, along with more efficient technology, will make the industry even more viable in the future, he said.
Richard Blackwell
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Ontario's big players
OptiSolar FarmsPlanned power production
150 MW
Locations
Sarnia, Petrolia, Tilbury,
Hagersville, Belmont
SkyPower
Planned power production
68 MW
Locations
Port Dover, Napanee,
Thunder Bay
Pod Generating
Planned power production
60 MW
Locations
Sault Ste. Marie