The Liberals, predictably enough, are bullish about the future. "The private sector has a way of organizing itself when these opportunities arise," says the current energy minister, Brad Duguid, who has spent much of the past year attending ribbon-cutting events at wind and solar plants. "Our read is that the integration has taken place." Others disagree. "The supply chain," states Ghezzi, "is a problem."
The poster child for Duguid's sunny outlook is a Canadian company that purports to be repatriating solar jobs from China. Kitchener-based Canadian Solar Inc., a $1-billion-a-year firm that makes solar panels, now employs 500 people at its subsidiary's factory in Guelph.
Corporate patriotism didn't drive CSI's decision to invest $60 million in Ontario. Like many other panel manufacturers, CSI leverages China's low-wage labour market to win business in Europe. In Ontario, the company had to pay to play. "We would not have built this plant without that Ontario content rule," says company executive Milfred Hammerbacher, adding that the firm plans to use the Guelph plant as a springboard into the entire North American market. "We don't intend to be here and leave a year from now."
The company, which claims to be the world's sixth-largest solar component supplier, was founded by Shawn Qu, an engineer who did his graduate work in semi-conductive materials at the University of Toronto. CSI made do with one-off contracts until 2004, when Germany set off a solar gold rush that mirrored the wind revolution in places like Denmark and Sweden. The firm hustled to build factories in China that crank out PV components (silicon wafers, solar cells and panels). Hammerbacher points out that several European countries, including Spain, Italy and the Czech Republic, moved to replicate the German formula, thus creating new markets for CSI.
Several foreign firms also appear to be testing the Ontario market, including giants like Siemens AG. SunEdison, one of the first American firms to make significant inroads into the commercial rooftop market, has enlisted two manufacturers-Canadian auto-parts supplier Samco Machinery and a Singapore-based electronics fabricator, Flextronics, that has a plant outside Toronto-to produce components for the company's Ontario solar installations. "We look at [Ontario]as a landing pad for Canada and other parts of North America," says SunEdison vice-president and country manager Jason Gray.
Other offshore firms seem to see Ontario the same way. Franco Traverso, the founder and chief executive of Silfab, a module maker based in Italy, says his company will begin construction on a factory in Mississauga in March. "We are thinking Ontario could be our North American base," he says, noting that the domestic content rules prompted Silfab to choose Ontario over another North American jurisdiction. Indeed, Silfab has felt the need to scout around for new markets because Europe has seen what Traverso describes as an "invasion of Far Eastern products."
Such developments have done little to mollify Paul Ghezzi, who is still waiting for Queen's Park to green-light a supplier of "thin film" solar modules for the rooftop projects he's planning. (Conventional PV systems are too heavy for many rooftops.)
At one point, there was hope. Two years ago, the Toronto electrical contracting firm Everbrite and a handful of partners pitched an ambitious plan to build a $500-million thin film plant in Kingston, using state-of-the-art technology and fabrication equipment licensed from a leading international firm. Queen's University thin film expert Joshua Pearce, who signed on to do research for the venture, says the Everbrite deal subsequently fell apart because the province wouldn't offer loan guarantees or any kind of upfront financing to help the investors. "They got no support beyond the feed-in tariffs," he says. "I personally am very frustrated."
Pearce is among the critics who say that some of the firms that have been licensed to set up factories in Ontario will do little more than assemble components made overseas. "It is embarrassing to call it manufacturing," he says, likening the province's emerging solar equipment industry to the maquiladora plants on the U.S.-Mexican border.
To add to Ghezzi's frustration, a previous generation of Ontario solar projects was built with imported thin film equipment sourced before the domestic content rules came into effect. One belongs to Enbridge, which completed an 80-MW solar farm in Sarnia last September; at $400 million, it is, for now, one of the largest such facilities in the world.