Been away on vacation and largely unplugged, so apologies for the content dead zone for the past week. Just to get things started again, here is my Clean Break column from last week’s Toronto Star. It takes a look at both the real potential of creating a solar PV export market in Ontario and the many reasons it will now be an uphill struggle. See below:

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Tyler Hamilton

Here’s a question I get asked all the time: Can solar modules made in Ontario compete in a global marketplace?

Many have their doubts, and those doubts are grounded in reality. The solar photovoltaic modules coming off Ontario assembly lines today are probably not going to find many customers in Europe or the United States.

The key word being “today.”

But give it two or three years. That’s the answer I get from manufacturers that have set up shop in this province, lured by a generous renewable energy purchase program that pays top dollar for electricity produced from solar panels.

We can get our costs down, they say — just give us the breathing room to do it.

That was the whole point of the province’s feed-in tariff (FIT) program. It was designed to provide above-market incentives for the first few years, after which rates would fall, owing to declining technology costs and manufacturing efficiencies that come from volume production.

Knowing the party won’t last, many Ontario manufacturers would ostensibly work to drive down their costs to where they could sell product in the United States and Europe at a globally competitive price-point.

All of that, however, was based on some assumptions. First, most manufacturers assumed a certain demand. Second, they assumed the Ontario grid could accommodate that demand. And third, they expected the program would survive long enough to follow through on their business plans.

The demand part happened. Ontario’s FIT program has resulted in contract offers for more than 1,300 megawatts of solar, exceeding most market forecasts. For example, Spanish solar-module manufacturer Siliken established a plant in Windsor based on the expectation that there would be a need for 400 megawatts of solar panels annually in Ontario.

But things fall apart after that. The program has been in effect for nearly two years, and so far only 10 megawatts worth of large projects have been built and injecting electrons into the grid, according to the latest figures from the Ontario Power Authority.

This may be a bit confusing. The province boasts the largest solar PV facility in the world in Sarnia, rated at 80 megawatts. How could we have built only 10 megawatts?

It turns out most of the solar development in Ontario over the past two years is the result of an earlier initiative, one that didn’t have domestic content rules. In other words, no manufacturers had to lay roots in Ontario to tap into market demand. That’s why panels for the Sarnia project came from U.S.-based First Solar and were made in Michigan.

The newer FIT program does require some domestic content, which is why we now have 18 solar manufacturers in Ontario. To their frustration, they see big demand for their product but their customers can’t get approval to connect their projects to the grid. No connection means no purchase order.

Manufacturers, for good reason, blame Hydro One for dragging its feet. In the meantime, assembly lines have been shut down and employees have been laid off until projects start flowing. Not the kind of environment in which product costs can be reduced and efficiencies gained.

“We came here thinking we could use the local market to support us while we brought our factories up and wrung efficiencies out of systems, getting us closer to competing against our brothers and sisters in China,” says Milfred Hammerbacher, president of Canadian Solar Solutions, whose parent company operates primarily out of China.

“We thought it would be achievable. But we needed two years to get to that level, and right now we’re just not getting that cushion. In a start-up operation where you have two or three of your lines not being used, there’s no way you can come close to being competitive (globally).”

Canadian Solar is committed to getting through this rough patch, as is Siliken. Many, however, are thinking seriously about packing up their bags and moving back home to their corporate parents.

It doesn’t help that Ontario Progressive Conservative Leader Tim Hudak wants to cancel the program if elected, pulling the rug from under a promising industry that’s already off balance. Thousands of jobs are at risk, as well as an export sector that — despite the spears we keep throwing at it — still has the potential to thrive if we’d let it.

“We set up in Windsor with the intention to serve the northeast of the U.S.,” says Paco Caudet, Siliken’s general manager in Canada. He just sold his flat in Spain. “I plan to stay here.”

It’s a courageous attitude. Still, why do we make it so easy for them to come, then turn around and make it so difficult for them to stay?

Tyler Hamilton, author of Mad Like Tesla, writes weekly about green energy and clean technologies. Contact him at tyler@cleanbreak.ca

The SolarShare Co-operative, developed by the TREC Renewable Energy Co-operative, began offering its community solar bonds this week to support eighteen solar projects that are already built and generating revenue under the provincial feed-in-tariff program. Together, these projects total 600 kilowatts and about $3.7 million in investment, but SolarShare hopes the community bond models will allow it to expand over the coming years.

Why might this interest you? Well, we don’t all own homes, and even if we do, our homes don’t always have the right rooftops for a solar installation. And some of us really don’t want the hassle of investing and owning a solar installation. Here’s what many people do want: a way to contribute to the greening of the Ontario economy and energy system while also having a safe place to invest their money.

The community bond delivers this. SolarShare is offering $1,000 bonds that earn a 5 per cent annual return over 5 years. Because the projects are already built and generating electricity, and because revenues from the electricity sold onto the grid are guaranteed under the FIT program, this is a very safe investment. “SolarShare bonds enable socially responsible investors to participate in an environmental initiative that positively impacts communities throughout Ontario,” according to SolarShare. “In an emerging ‘impact investing’ market, where returns are measured not just by economic, but also social and environmental benefits, SolarShare projects provide local economic development, generate clean, safe renewable enrgy that tackles climate change, and pay a competitive rate of return to investors.”

Now, at the moment, people can only purchase a single $1,000 bond. SolarShare is waiting for final approval from the Financial Services Commission of Ontario before it can offer multiple bonds. Anyone interested can go to Solar Share’s website Solarbonds.ca.

Personally, I’m hoping to see dozens of these community bond offerings sprout up across Ontario. It’s a great way to secure community participation in green energy projects. ZooShare, another community bond offering in the works, wants to produce green electricity from biogas made from Toronto Zoo animal manure. I wrote recently about the community bond trend. You can read it here.

Here is my Clean Break column from this past week’s Toronto Star:

By TYLER HAMILTON

Ontario has its own modern-day Stonehenge.

Didn’t you know?

Walking through a field of wild grasses and flowers at the Kortright Centre in Woodbridge you can see it as you approach: an organized display of majestic, sun-worshipping structures.

Instead of mysteriously erected stones dating back to 3,000 BC, however, these structures are solar modules mounted on tall poles or laid out on racking systems. The Kortright Centre calls the area PVPV, which aims to become country’s premier facility for testing and showcasing made-in-Canada solar technologies.

“We call it Solarhenge,” says Paul Luukkonen, who as sustainable technologies co-ordinator at Kortright is leading the PVPV initiative.

The centre is located on 325 hectares of woodlands, a little northwest of where Highway 400 and Major McKenzie Dr. intersect. There, about 130,000 visitors a year can go on hikes, watch wildlife, taste maple syrup or participate in one of dozens of practical workshops focused on renewable energy.

Owned and operated by the Toronto and Region Conservation Authority, it also has the space to grow. When the province introduced its feed-in-tariff program to encourage the deployment of renewable technologies, including solar power, Luukkonen and his team saw an opportunity.

Before the program, there was only one company in Ontario making solar panels, a Woodbridge-based firm called SolGate. With new local content rules in place, more foreign manufacturers have started setting up assembly operations in the province. Luukkonen figures there are now about 18 brands of solar photovoltaic panels made in Ontario, and that number is expected to grow.

“Problem is, we’ve been seeing a lot of funny promises from companies about the return on investment from their panels and how much energy their systems provide,” says Luukkonen.

For example, research from Natural Resources Canada indicates a typical 1-kilowatt solar panel can produce 1,161 kilowatt-hours per year in southern Ontario, yet some manufacturers and developers are claiming their products can produce up to 1,500 kilowatt-hours – on par with Los Angeles and Mexico City.

“Out of concern for sustainability of the industry, we want to make sure these salespeople are giving consumers realistic expectations,” adds Luukkenon, explaining how the PVPV initiative came about.

The plan now is to launch a facility that will test Ontario-made panels side by side at the same angle of exposure to the sun. Using the latest data-collection equipment, PVPV technicians will measure panel performance under a variety of conditions, taking ambient temperature, wind, snow fall and light conditions into account.

“Everything that qualifies to be sold in Ontario under the feed-in-tariff program, we want to test it and make that information available in an unbiased way to the consumer,” says Luukkenon. “We’re trying to instil consumer confidence with this third-party verification.”

Data will be publicly posted at on a monthly basis.

The test facility won’t be formally launched until September, but the first of several large racking systems designed to carry the panels is already taking shape.

Eclipsall Energy, which has a 120,000-square foot manufacturing facility in Toronto, and Heliene, manufacturing out of an 18,000-square foot facility in Sault St. Marie, are among those expected to cough up the $12,000 annual fee to join the testing program.

“Obviously, the more we have the more value that brings to this project,” says Luukkenon. “Another purpose here is to provide a showcase for Ontario-made technology and manufacturing for the tens of thousands of people who pass through each year.”

Manufacturers would be wise to join, even at the risk of having their panels rank at the low end of the pack. Those who don’t join will be sending a signal to developers and consumers that they don’t want their equipment being closely inspected.

“It will sort out who’s confident in their product and who’s putting crap out there while trying to capitalize on the current situation,” says Luukkenon.

And nobody, when they’re dishing out tens of thousands of dollars, wants to purchase crap.

Tyler Hamilton, author of Mad Like Tesla, writes weekly about green energy and clean technologies. Contact him at tyler@cleanbreak.ca

Canadian sites are taking pre-orders for a few more days still, but for my U.S. readers Amazon.com has started shipping my new book Mad Like Tesla: Underdog Inventors and Their Relentless Pursuit of Clean Energy. The book tells the stories of some clean energy entrepreneurs/inventors taking huge risks and thinking outside the box to solve some of the world’s most pressing issues. Each one is at a different level of development but all face similar barriers along their journey. The stories set the stage for discussion about a specific type of clean energy, technology or field of discovery (e.g. fusion, solar, waste-heat recovery, biofuels, energy storage, biomimicry, etc.) supported by some historical context and current-day examples.

Why Mad Like Tesla? That’s explained in the introduction, but in a nutshell Serbian-American engineer Nikola Tesla invented many important technologies in his lifetime. yet he faced constant struggle against naysayers and skeptics who couldn’t, at first, grasp the significance of what he was sharing with the world. Many dismissed Tesla as a mad scientist, and yet his inventions shaped the world largely for the better. So, in my view, if someone today is mad like Tesla, that’s not necessarily a bad thing. It’s quite a good thing, actually — we need more of these people, for the changes necessary in our world will not come from the kind of cautious, incremental steps being taken today.

I have a website for the book in the works, but it won’t be ready until end of August.

Thanks for your support!

This week brought more evidence that electricity issues will dominate the upcoming provincial election. The Ontario NDP vowed yesterday that, if elected, it will kill plans to build a new nuclear plant at Darlington and potentially pull the plug — or in its words, “hit the pause button” — on plans to refurbish the province’s existing fleet of reactors. Party leader Andrea Horwath said money earmarked for new nuclear would instead go toward funding household retrofits that would, by lowering energy use, partially eliminate the need for the new power.

Now, there’s no doubt the province could do A LOT more to promote conservation, and the Liberals deserve a wooden spoon to the back of the head for not pushing and supporting it more and, apparently, having no significant plans to do so. I also think we can avoid the need for new nuclear in this province. Regarding the existing fleet, we have to be very careful. Nuclear currently supplies about half of the electricity in this province. If we’re going to reduce our dependence on it, it will be a weaning process that will depend on the health of other generation assets and their ability to supply the grid reliably. There may be some wiggle room, but at a time when we’re phasing out coal we’re going to need most of those nuclear assets whether we like them or not. Refurbishments will be necessary, but should certainly be scrutinized — not assumed — keeping in mind we can’t afford to put unnecessary strain on the system. We need to stay focused on getting rid of coal, and doing it right.

In other news, the Liberals have been making some clever and necessary moves to defend its green energy and green economy plan, and by association the jobs and industry it has created, should they lose an election to the PC Party in October. On Tuesday, it was revealed that Energy Minister Brad Duguid had issued a ministerial directive that alters the rules of the feed-in-tariff program, eliminating the Ontario Power Authority’s right to cancel a FIT contract if a developer does not yet have a Notice to Proceed to construction.

To obtain a Notice to Proceed, developers must have all permits and approvals, including all project impact assessments, a renewable energy approval from the Ministry of Environment, a plan that verifies that all domestic content requirements have been met, and a financing plan that demonstrates the developer has the money in place to build the project as envisioned. The PCs, if they were to form the government, have indicated they would exercise their rights under Sections 2.4 (a), (e) and (f) of FIT contracts to terminate contracts in cases where developers had not yet obtained a Notice to Proceed. Now, there would be a penalty to this — the government would have to cover any pre-construction development costs. But Hudak and crew have said they’re willing to take that hit.

This would create a huge problem for the FIT program, because more than 1,800 FIT contracts would be at risk of being cancelled and at no fault to the developers. Many, including Samsung, have a contract in hand but are waiting for grid capacity or to receive their renewable energy approval from the environment ministry. To protect this group, the Liberals tweaked the rules. Now, those developer can request a waiver that takes away the power authority’s right to terminate a project, as long as that developer can show a domestic content plan supported by a manufacturing equipment agreement. Developers must still submit a financing plan and receive all permits and approvals before they can begin construction, but the absence of these are no longer an opening for contract termination.

The end result is that it salvages whatever confidence is left in the industry since Hudak announced his intention to scrap the FIT program. Renewable energy developers and manufacturers in the province are still worried, but less so now. The Liberals also announced improvements to the renewable energy approvals (REA) process that will see applications dealt with more quickly, so that should bring some more certainty as well.

Samsung is among those less worried. In fact, it was announced yesterday that the government has given Samsung a one-year extension to fulfill certain contractual obligations. But Samsung had to give a little to get a little. In exchange for the extension, Samsung agreed to accept a lower economic adder, which is the amount it expects to received on top of normal feed-in-tariff rates for bringing jobs and manufacturing to the province. Specifically, Samsung’s adder over the 20-year life of its contract has been reduced to $110 million from $437 million. This is good for ratepayers, relatively speaking, but in my opinion the FIT rates alone should be enough to make Samsung happy — so the Korean giant is walking away with this new contractual arrangement quite satisfied. But a deal is a deal, right?

The good news in all of this is that the Liberals are starting to put up a fight, and that will increase confidence in the sector and send a message to the public that green energy in Ontario is something worth fighting for. It has been a long time coming, though decisions like killing offshore wind projects have already hurt confidence in the sector. The Liberals will have a very difficult time regaining what it lost.