Canadian solar stumbles behind world leaders in the reach for grid parity

Solar Panel Installation - TEIA

By Arman Kazemi

August 21, 2014

A new report from RenewEconomy.com suggests that international leaders in rooftop photovoltaic (PV) technology—like the U.S., Germany and Australia—are on the brink of attaining grid parity for solar and battery storage.

This shifting clean-energy landscape could mean more attention paid to the sector closer to home, where private and government investors are keeping a close eye on Canada’s solar market.

Grid parity refers to the point at which the cost of producing solar energy is “comparable or cheaper than grid prices” of incumbent energy producers such as coal and gas.

This has already happened in solar markets like Australia, where last month the abundance of rooftop panels in the state of Queensland caused the wholesale price of electricity to drop below zero during peak activity.

Now, according to the latest RenewEconomy report, battery storage is the next great frontier in solar tech’s market viability.

In an earlier interview, Yan Zhuang, the chief commercial officer of solar manufacturer Canadian Solar, said that “the arrival of cost competitive energy storage would be a key for solar’s future growth.”

Battery storage has yet to achieve grid parity with incumbent energy producers because the price for storing and using solar energy is too costly during off-peak periods, either in the evening or during winter months, when there’s not enough sun to feed the grid.

As Zhuang says, storage “will become a game changer because we need to shift the load. But we are not quite there yet.”

The fact that Canada is lagging behind its international competitors, such as Germany (which has the world’s largest long-term PV market); however, is due more to the lack of a unified national policy on solar PV investment than lack of climate resources.

While Ontario is a national leader in terms of solar investment and installation projects, provinces like B.C. remain behind the curve.

Policies that address clean and renewable sources, such the 2012 Clean Energy Act, focus on “new and existing hydroelectric resources,” according to a year-old study, Grid Parity in British Columbia.

But upward trends in the province’s electricity demand, paired with the steady decline in the price of PVs, could result in existing provincial energy investments turning sour within a decade.

“Electricity demand in B.C. is expected to rise 50 per cent over the next 20 years,” the report states, while PV systems are predicted to decrease by an average of five per cent annually.

If these trends persist, which by all accounts they are expected to, solar energy in B.C. “will reach grid parity in 2024.”

With their comparable climates, there is no reason the Canadian solar energy sector shouldn’t be competitive with those of Germany and the U.S., as Ontario’s successful “feed in tariff” model suggests.

Using Ontario as a case in point, a blog post from ABB—the world’s largest supplier of electricity grids—states that, “the driving force behind solar and renewables . . . is not nature but legislators.”



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