Based on the Canadian Renewable Energy Association (CanREA) announcement about the year-end solar market data, Canada’s solar energy sectors grew significantly by 13.6% in 2021 with a total of 2,399 MW solar capacity, beating the 2,111 MW in 2020. The country also managed to add solar power generation of 288 MW capacity from new utility-scale solar projects.
CanREA also added that Canada’s renewable energy market will gain significant growth due to the deployment of numerous solar projects in the next coming years.
Solar Power Generation Growth Highlights in Canada (2021)
- By the end of 2021, the total major solar energy capacity in Canada reached 2,399 MW, larger than the 2,111 MW in 2020.
- 288 MW solar power generation is installed in 2021.
- Solar energy growth in 2021 increased by 13.6%.
- The solar growth is shared by several provinces in the country: Alberta has the largest contribution with 250 MW, and some small portions are from Saskatchewan (21 MW), Quebec (9.5 MW), Nova Scotia (4.8 MW), Ontario (0.3 MW), Yukon Territory (1.5 MW) and Prince Edward Island with the lowest solar capacity made in 2021 (0.1 MW).
- In January 2021, Canadian Solar Inc. sold the ownership of two major solar projects namely Hays and Jenner solar projects, located in southeast Alberta, to BluEarth Renewables. Both solar projects carry 31 MWp capacity and are set to start their commercial operation in 2021.
- In April 2021, Solar Krafte Utilities signed a contract with the Alberta Utilities Commission for the construction of Solar Krafte Brooks Solar PV Park with 400MW capacity, in Alberta, Canada. The project was in permitting stage in 2021 and is expected to start its commercial operation at the end of 2022.
- In May 2021, Canada commissioned and completed its biggest solar farm, the Claresholm Solar project with 132 MW, located in Alberta. The project has approximately 477,198 photovoltaic solar panels and provides solar power for 33,000 households in Alberta.
Canada Solar Energy Market Outlook to 2021
Over the last decade, Canada has registered significant growth in solar power generation due to its substantial solar energy resources. In 2010, the country managed to install a total solar capacity of 221 MW. Whereas, at the end of 2022, it already reached 3,325 MW solar capacity. As of 2020, Canada’s most valuable source for solar generation is Ontario, sharing almost 96% of its solar power. Other provinces such as Alberta, Manitoba, Quebec, and Saskatchewan had also contributed to the country’s solar power generation.
According to the Canadian Renewable Energy Association, the installed solar power of Canada in 2020, increased by 10% with 130 MW/250MWh capacity. Ontario is the primary driver of solar energy growth, having the largest installed solar capacity of 2,709 MW. Followed by Quebec with a solar capacity of 13 MW. Alberta got the third spot for having 110 MW installed solar capacity. These numbers are expected to grow significantly in 2021.
The release report of CanREA also revealed that Canada will start its solar power generation with as much as 2 GW in 2021, which will lead to a significant increase over 2020’s total completed projects of 236 MW. In the first week of January 2021, the country already owns 240 MW of solar generation under construction.
Robert Hornung—President and CEO of CanREA, said that amidst the challenges inflicted by the global pandemic, Canada still managed to install a total solar capacity of approximately 3,000 MW, significant growth in energy storage.
Solar Energy Market Growth in 2021
The positive forecast for solar growth in 2021 turned into reality when the year set a new record-breaking for solar power generation. The country managed to increase solar market growth from 10% in 2020 to 13.6% at the end of 2021. The huge improvements in solar generation technology have brought significant changes in the country’s harsh climate, which includes short winter days and frigid weather.
The Government of Canada also implemented two major strategic approaches to support the continuous solar growth in the country. The first approach is to increase the number of solar power installations in Canada, while the second aims to maximize the high potential of solar energy by supporting both on-grid and off-grid solar installations. The two approaches are expected to drive the solar energy market in Canada.
Solar Energy Installed Capacity
The above figure shows the country’s solar energy installed capacity in MW from 2015 to 2020. Canada installed a disappointing 70 MW of solar power capacity which was lower than an already low level of 219 MW in 2019. The demand dropped significantly due to the delays of solar projects caused by the global pandemic. The COVID-19 disrupted the supply chain, fluctuated the solar energy demand and imposed workforce health concerns.
Solar Power Guides & Rankings in Canada
Energy Hub Organization has been releasing the solar power guides and rankings of Canadian provinces and territories based on the benefits of solar power to property owners that install solar energy systems. The provincial solar rankings and guides are based on several factors such as sunlight levels, solar installation costs, solar financing options and electricity costs.
Based on Figure 3, Nova Scotia obtained the highest total score for the solar power ranking and guides in 2021, while Newfoundland and Labrador scored the lowest with only 48/100.
Cost of Solar Power Installation
The average installation cost of solar power in Canada is $3.01/watt or $22,500 for a 7.5kW system. However, the cost of solar power is subject to change depending on the solar system size, solar incentives applied, type of solar power system including the province you are residing.
The cost of solar power installation is determined by two main factors:
- The expenses that you need to pay for the entire system (in units of $ per watt)
- The size of the system you installed. (in units of watts)
The first factor is the cost that a solar installer will charge to you which is charged “per installed watt”. Whereas, the second factor comprises your annual electricity usage and the average amount of sunlight your province receives.
Solar Production by Province
Since the amount of solar energy that can be produced by a solar PV system depends on the amount of sunlight that the solar module captures, it means that the more exposure to sunlight, the more solar power production.
For the solar production ranking, the natural factors category contains only one ranking factor:
- Solar Irradiance /20
- Total /20
The amount of sunlight that a province receives determines the total amount of energy that your solar PV system can produce. Thus, provinces with higher irradiation get higher scores.
- Although Nunavut has the northernmost communities in the energy hub’s assessment, it receives higher solar irradiation annually compared to the other five provinces. The main reason is, it experiences extremely long summer days and low cloud cover relative to coastal provinces.
- Alberta, Southern Saskatchewan, and Manitoba gain more solar irradiation than other provinces in Canada.
- April is the month with high solar power generation in Canada obtaining an average of 122kWh/kW/mo, whereas December is the least productive month with 46kWh/kW/mo.
If you’re planning to switch to solar energy, you should take into consideration the solar system financing options and programs. Particularly, if your system has huge upfront costs. It will help you lessen the burden of paying the entire system outright.
The solar financing category contains three ranking factors scored as indicated:
- Cost of Installation /15
- PACE Financing /10
- Other Financing Options /5
- Total /30
Since then until now, the upfront cost of solar installation remains a primary barrier for many property owners. Provinces scored higher when upfront costs were lower.
One of the common financing options is Property-assessed clean energy (PACE). It allows you to repay your solar PV system’s costs through your property tax. Those provinces with higher scoring had these solar financing programs that solar customers can use to finance their system.
Solar loans make it easier for homeowners to pay for their solar PV system, and eventually switch to solar.
Solar Incentives Programs
One of the key drivers of the significant growth in the solar PV market of Canada is the solar energy incentives.
Major incentives programs include rebates and tax breaks which allow solar customers to lessen the total upfront costs of solar PV. Provinces with large provincial incentive programs rank well.
Energyhub also includes smaller regional incentives, as well as incentives that only apply to certain solar system types (i.e., off-grid or non-hydro communities).
However, with the declining cost of solar installation across the country, solar incentives become less and less important.
The solar incentives ranking category comprises two ranking factors such as:
- Provincial Solar Incentive Programs /15
- Regional Solar Incentive Programs /5
- Total /20
- Incentives continue to rise and fall across Canada. In 2019-2020, provincial incentives programs in Alberta and Saskatchewan are eliminated, limited in Nova Scotia, and newly formed in PEI. Nevertheless, the provincial incentives have remained the same in 2020.
- Currently, Prince Edward Island has the largest solar rebate program, which is equal to $1.00/Watt.
- Alberta lost its provincial rebate but it managed to get one of the highest ranks since dozens of municipalities offer smaller incentive programs.
- The solar incentives in the Northwest Territories are only applicable to off-grid and non-hydro communities. While, incentives in Yukon are only accessible to off-grid communities.
Future of Canada’s Solar Energy Market: Forecast Period 2022-2027
- The Canadian solar photovoltaic (PV) sector is expected to gain significant growth in the solar energy market.
- By 2050, the country’s proposed plan to achieve net-zero emissions is anticipated to replace the share of fossil fuel in the energy mix with renewables. Hence, this goal is expected to provide a huge potential for the solar industry in the next-coming years.
- The utilization of alternative energy sources such as wind and hydro energy is expected to halt the significant growth of the solar energy market in Canada over the forecast period.
During the 2022-2027 forecast report, the solar energy market in Canada is expected to obtain more than 11% CAGR. Due to the global pandemic outbreak, the country has significantly faced fluctuating growth in the solar energy sector. In 2020, Canada stopped the commissioning of major solar projects, leading to only 15 MW solar energy growth at the end of the year.
Moreover, Canadian Solar EPC contractors experienced disruption in the procurement of solar equipment needed for the projects, and delays in the current development phase. This roughly impacted the scheduled commercial operations of solar plants. Fortunately, factors such as low installation’s cost and supportive government policies on solar deployment to minimize reliance on fossil fuels are expected to increase the Canadian solar energy market growth.
On the other hand, the widespread utilization of other energy sources such as wind and hydro power generation is expected to negatively impact the solar market’s growth in Canada.
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Just goes to prove climate change isn’t real and Canada is not serious about alternative energy when half the Provinces offers zero incentive to move to solar energy as a serious alternative for home owners.