Skip to main content

Solar energy is on a roll, but residential incentives lag, limiting growth

Solar panels line the rooftops of the Drake Landing Solar Community in Okotoks, Alberta.

Alberta's solar industry is experiencing exponential growth in every area but residential, where homeowners are still waiting on tax breaks to make the economics work.

"The amount of installed generation capacity in Alberta has grown one-hundred per cent each year for the past three years," says Rob Harlan, executive director at the Solar Energy Society of Alberta. "But it's the growth we're expecting in 2017 which is really impressive."

According to Mr. Harlan, one of the best measures of the future health of the industry is the Alberta Electric System Operator (AESO) connection queue; a list of projects which are queued and awaiting access to the grid.

"Alberta currently has a solar capacity of thirteen Megawatts. In December the solar capacity of the AESO connection queue hit 1,453 Megawatts. All of those projects aren't guaranteed to come to fruition but it's still in incredible rate of growth."

The vast majority of queued projects, explains Mr. Harlan, are in the agricultural, commercial and community sectors, fuelled by government incentives, with little growth within the residential sector.

"In order for at-home solar technology to move from the early adopters to the masses, there needs to be economic parity; the cost to install solar technology has to be paid back to homeowners within a reasonable time frame," he explains.

"Things are certainly moving in that direction; utility rates are going up and installation costs are coming down," Mr. Harlan continues. "But a government incentive would get us there faster and could be phased out when we eventually reach good parity."

Like others within the industry, Mr. Harlan believes government incentives are "needed and appropriate" and "a tried and true way to increase uptake of solar technology among homeowners."

Solar panels line the rooftops of the Drake Landing Solar Community in Okotoks, Alberta.

Curtis Buxton, project manager at SkyFire Energy, which has been installing solar power systems in Alberta for 15 years, agrees.

"When the NDP came into power everybody was waiting on renewable incentives for homeowners but it hasn't happened yet so that sector has been slow," he says. "We've given a lot of quotes to people who are interested but waiting to see if they can get a tax break on it."

Denis Benoit is manager of The Solar Store in Calgary which saw a seven hundred per cent growth in business this fiscal year; mostly attributed to their maintenance services and training courses.

He says rumours of homeowner incentives are rife in the industry.

"It always tops the list of questions when people come in. We've heard solar will be included in the Alberta Energy Efficiency Program coming early 2017 but we haven't had any details yet. People are desperate for it."

Under current pricing Mr. Benoit says it would take "15 to 20 years" for a home solar system to pay for itself. "If it's strictly a financial motivation, most people will walk away," he says.

But the lack of financial incentives hasn't put solar in the shade for all homeowners; some still consider it a viable option and have found ways to make the economics work.

Airdrie, Alta. home of Richard Proulx.

Richard Proulx bought his dream home in the city of Airdrie, thirty kilometres north of Calgary, in May, 2016. His first home improvement; a solar system which he purchased from SkyFire Energy.

"I've always been interested in solar energy," he says, "I think living in a province like Alberta which has such a huge oil and gas sector we have a bigger responsibility than most to own up to the side effects of that and be more conscious of where our energy is coming from."

By purchasing the solar system along with his new home, Mr. Proulx was able to add the cost of the system to his mortgage, absorbing the $20,000 equipment and installation charge. He estimates this will see him break even on his solar system in three to five years.

"It's called a Purchase Plus Improvement lending option and it's as close to an incentive as you'll get at this point. I work as a real estate agent and I tell all my clients about it because it's important that people know that there are ways to finance solar."

Mr. Proulx says the financial benefit of solar, though not huge, is also a nice bonus.

"We over-produced all summer so were saving and achieving small rebates on our energy bills. From October our energy production fell but we're still producing a little. We're fortunate to live in a province with as much year-round sunshine as Alberta."

He's also got his eye on Tesla's solar roof which launched in October. It uses glass roof tiles to disguise solar functionality underneath, making solar a more aesthetically pleasing proposition for homeowners.

"The previous owners of my house had just replaced the roof shingle when I bought it and it's got a lifespan of about twenty-five years; which is the same as the solar panels. After that I'd definitely consider replacing the roof and the solar system with something like Tesla's technology. I think it's awesome."

Mr. Buxton says Mr. Proulx isn't the only homeowner in Alberta who's interested in the Tesla proposition.

"We've had a number of calls about it but to be honest there's still relatively little information on the cost and technical details. It's hard to see how it's going to be more affordable than a traditional solar panel system. We should get more information in 2017."

Patrick Bateman, Director of Policy and Market Development at the Canadian Solar Industries Association (CanSIA) says while interest in solar is increasing and technology is evolving, Canada is still far behind the United States when it comes to residential uptake.

"The United States have a thirty per cent Investment Tax Credit which has driven their residential solar sector but there are no provincial tax-breaks for solar at the federal or provincial level in Canada for homeowners. Ontario offers the microFIT program which pays homeowners a fixed rate for the electricity they produce and utilities such as Manitoba Hydro and SaskPower offer rebates to homeowners to offset the capital costs but that's about it."

But, while homeowner incentives would be welcome, Mr. Bateman says there are bigger systemic barriers to solar achieving success in the micro-generation sector.

"Installation companies are always very focused on the mechanism but the bigger problem Alberta faces is that the ability of homeowners to get value from solar isn't there," he says.

"Alberta has a twentieth century electricity system; it's set up not to make sense for homeowners. Distributed resources in Alberta, which are those smaller power sources like residential solar systems, are valued the same as all other energy sources. So households aren't given value for the energy they produce," he explains. "There's far more progressive thinking in places like New York and California which are driving this idea that distributed resources have an entirely different value from traditional approaches to generating and distributing electricity. Which makes solar work far better homeowners. If we could follow that, then we'd be making real progress."