Guest Post: Koenig & Consultants Gaze At Future Solar PV Prices

Koenig & Consultants is a boutique management consulting company based in Toronto and Hamburg with special expertise in the area of Renewable Energy. Their work includes traditional consulting around strategy, marketing and communication for renewable energy companies. Each month they provide a "Chart of the Month" for interested clients, colleagues and friends. This is their September 2011 version. You can reach them at info@koenigconsultants.ca.

CHART OF THE MONTH - SEPTEMBER 2011

Price Development of Solar PV, Feed-in Tariffs and Elections

In our last Chart of the Month we claimed that the costs of renewable energy had one direction only: “down, down, down”. This month we’re looking at the consumer end of things. Our chart shows the development of prices for fully installed solar PV systems in Germany and Canada over the last few years. There are two graphs for each country: smaller residential systems (<10kW) aka microFITs and larger systems (> 10kW).



Here are some observations and conclusions:

The general price trend: There is only one trend indeed – down. Germany has been leading that trend which is most likely induced by an incremental and continued reduction of feed-in tariffs. We strongly believe that this trend will continue in the foreseeable future as the technology will advance and the overall efficiency of the technology and the entire industry will increase.

The market and supply effect on price: Solar of course isn’t exempt from global market conditions. In 2007, for example, prices went up due to high global demand for silicon wafers and other components caused by a booming (overheating) world economy.

The prices solar PV owners pay: In 2009 consumers had to pay a premium for smaller systems in Canada. That year the Green Energy and Green Economy Act was launched in Ontario introducing a microFIT rate of 80.2 cents/kWh for small and mostly residential systems up to 10 kW. The providers of systems in the early phases were able to bank in on those tariffs. As more and more competitors enter the field the prices per installed kilowatt capacity are prone to drop significantly in the next few years. Also most residential customers are better informed now and question prices and fees for hardware, service and consulting.

The prices we pay for electricity: Albeit being higher compared with similar feed-in tariff programs around the world for this small system segment, high feed-in tariffs in Ontario were and still are instrumental in attracting Ontarians to a new industry that was previously non–existent. The higher tariffs are, nevertheless, still justifiable due to the local content rules and a lower sun radiation than in most other jurisdictions with similar feed-in tariffs (e.g. Spain or Italy). Currently, the amount of electrical power fed into the grid from microFIT systems has no significant contribution to rising electricity prices for consumers in Ontario. This is a myth and scenario eagerly painted by those presently cashing in on “old energy”.

Crystal Ball I – the future of solar PV in Germany: Prices in Germany have been in free fall over the last years. The phase-out of nuclear power in Germany can have opposite and thus maybe neutralizing effects on prices: Up – as demand for panels, inverters and qualified installers will increase. Down – as the German market will become once again very attractive and increasing efficiencies may be unleashed with increasing government support for solar R&D.

Crystal Ball II – the future of solar PV in Ontario: With renewable energy being a hot topic in the upcoming provincial election in Ontario, one outcome may be easily predicted. The feed-in tariffs for solar PV projects will come down. The question that remains is by how much? The chart presented here proposes that a 10-13% decrease is possible considering that the local market still needs some support. Should the Conservatives axe the feed-in tariff program entirely or reduce the rates beyond that they will significantly damage if not nip this evolving industry in the bud.

Our Conclusion: It requires a healthy combination of market forces at work and a strong political will translated into transparent and reliable policies to keep the prices for all at balance, the consumers happy and the industry growing.

Sun Sets on 2nd Annual Solar & Conservation Fair

As mentioned in an earlier post, Wakulat|Law Principal Rob Wakulat teamed up with local Business Improvement Areas in the Etobicoke Lakeshore community and volunteers from the Environmental Planning Committee of the LAMP Community Health Centre to put on a one-day Solar & Conservation Fair dedicated to showcasing sustainability initiatives. A key theme was empowering local communities to explore taking on their own sustainability projects and, in particular, the opportunity presented by community power.

On Saturday September 10, 2011, the Assembly Hall played host to over 20 exhibitors, 13 speakers and over 200 attendees. Event highlights included:

Chocosol Solar Roaster

• Welcome speech by local MPP Laurel Broten who travelled the province as Minister of the Environment (2005-2007) in support of the legislative and committee process that introduced the Green Energy and Green Economy Act to Ontario;
• A prototype solar roaster built by Lorin Symington and the Chocosol team used to roast cacao beans for onsite sampling;
• The University of Waterloo's Midnight Sun Solar Race Team with last year's solar car used for competing in international solar car competitions;
• Local business owner Jim McNeil explaining why he decided to make Canclone Services the first solar-powered printer in Toronto; 
• Information from speaker Matthew Zipchen about the recently launched SolarShare initiative which allows any Ontarian to invest in $1,000 community solar bonds, with a 5-year term and 5% annual return;
• Samples of generously donated organic and locally-sourced refreshments from Front Door Organics, The Village Butcher, Fresh City Farms and Social Coffee & Tea Company; 
• Book signing by author, columnist and Cleanbreak blogger Tyler Hamilton for his new book Mad Like Tesla; and



 University of Waterloo Midnight Sun Solar Race Team

• Environmental author and speaker Jim Harris delivering the end-of-day keynote speech that explained how going green is good for business.

The Fair encouraged people who not only care about reducing their environmental footprint to gather and discuss ideas, but also those people interested in learning about how to benefit financially from taking on green initiatives. Attendees were able to check out seminars on topics such as rooftop solar technology, community power, green careers and energy conservation through landscaping. Exhibitors provided insight into their sustainable food options, solar technology, and community capacity building.

The donated delectables.

Even though Ontario has implemented the Green Energy and Green Economy Act, not all communities have easy access to the knowledge and tools required to participate in this emerging sustainable economy. The event was designed to bring useful information to businesses, residents and community groups who are normally quite busy and don’t necessarily have the time to research how they can participate in the province’s emerging green economy.

The Fair was an example of community spirit, created and planned with the participation of local business associations, dedicated volunteers and non-profit community groups who share a passion for a cleaner, healthier and prosperous future.

Key support for the event was provided from the local BIAs, TABIA, Bullfrog Power and Toronto Hydro.

Event sponsor Toronto Hydro with materials promoting energy efficiency.

Funding Sustainability Efforts for Small Businesses

Wakulat|Law Principal Robert Wakulat has recently been working with the Toronto Association of Business Improvement Areas, though its greenTbiz program, to engage in sustainability outreach to Toronto's 27,000 small business members of the city's 71 BIAs. As greenTbiz looks to the best practice models of other green outreach programs, it has continually set its gaze upon the groundbreaking work being done in the Pearson Eco-Business Zone by Partners in Project Green.

Last Thursday (September 22, 2011), PPG held an Eco-Business Breakfast entitled Funding your Sustainability Efforts.  It brought together speakers from RBC Dominion Securities, Royal Bank of Canada, Ameresco Canada and Reliance Comfort to learn about how best to fund various environmental initiatives.

From funding eco-projects through becoming more financially efficient, as Robert Lumia of RBC Dominion Securities spoke about, to commercial financing as Ged Seguin of RBC discussed, the Energy Savings Performance Contract model outlined by Jim Fonger of Ameresco and the renting approach demonstrated by Yolanda vdWeerd of Reliance Commercial, a variety of methods were reviewed.

Presentations can be downloaded here.

Wakulat|Law Supports Friends of Wind's Public Outreach

Introduction
Ever since the Province of Ontario introduced its landmark Green Energy and Green Economy Act, two major tracks of criticism have bedevilled the wind sector. First, developers are more likely to find local communities opposing proposed wind farms that have taken advantage of the streamlined approval process implemented by the Act. This lack of required consultation has created a sense of helplessness as rural residents feel large numbers of turbines are erected without regard to their visual or health concerns. This has stirred an emotionally divisive debate across the province's countryside that has proven grist for the government's political opponents in an election year.

The Impact on Health
While beauty is in the eye of the beholder, it should be an easier task to address health concerns with facts and research.  Earlier this year, Toronto-based environmental lawyer Dianne Saxe reported on a full-day webcast - Wind Power & Human Health Scientific Forum - dedicated to discussing wind power effects on human health.  The conclusion was essentially that "infrasound from wind turbines is not a health problem." This accords with an earlier report from Dr. Arlene King, Ontario's Chief Medical Officer of Health, who concluded that there is "no direct causal link between wind turbines and adverse health effects." Naturally, health professionals and wind proponents should take any concerns raised by residents seriously, but reasoned debate should be expected from all sides and include an understanding of the established facts to date.

Friends of Wind
Earlier this month Wakulat|Law had the privilege of participating in a public forum organized by a nascent grassroots group: "Friends of Wind". The group's research has indicated that "public opinion polls have consistently shown the majority of Canadians support wind energy for its environmental, economic and social benefits". They became concerned that this point-of-view was being lost to the more vocal groups bringing wind development into disrepute. Led by a full-time farmer and mother of four, Jutta Splettstoesser, Friends of Wind decided to put on four public events where industry experts could share the facts with interested residents, citizens and policymakers.

Jutta has been supported in her efforts by like-minded individuals and wind energy industry leaders keen to ensure all citizens can “join the conversation” about Ontario's energy future. Their fourth and final event was held on September 8, 2011 in London, Ontario. Wakulat|Law Principal Robert Wakulat moderated a panel that included the following expert speakers:

• Gideon Forman, Executive Director, Canadian Association of Physicians for the Environment
• Paul Seccaspina, CEO of Oraclepoll Research Limited
• Horia Hangan, Director of University of Western Ontario Wind Tunnel & Project Lead WindEEE
• Vinay Sharma, CEO, London Hydro

Forman, as he has done in the past, tackled the health issue and asked attendees to consider the health impacts of alternative generation options such as nuclear and coal. Seccaspina provided detailed insights into the minds of Ontarians with a focus on their attitudes towards renewable power and the upcoming provincial election:

Friends of Wind_Sept7

Ontario Votes 2011: The Future Of Energy Policy

Introduction
Energy has become a hot topic during the Province of Ontario’s 40th election campaign. Hydro bills, the smart grid (read: time-of-use pricing) and the energy fuel mix are all issues that have animated the policy positions of the four main parties as voters prepare to head to the polls on October 6, 2011. The debate surrounding the province’s renewable energy sector has created uncertainty about the future of the Green Energy and Green Economy Act (Ontario) and the Feed-in-Tariff programs. Proponents have hailed these regulatory features as world-class achievements, while others have criticized them as unfair and expensive subsidies.

In the two years of the FIT programs, Ontario has made significant progress. The province has over 90 projects operational with a nameplate capacity of over 24MW. By comparison, it takes on average of 60 months to construct a nuclear plant, from pouring the first concrete to putting power on the grid. This does not include the time needed to plan; complete environmental assessments and public consultations; obtain permits and licenses; or design, manufacture and finance it. These activities all add to the time before a nuclear plant will turn on a single light bulb.

The Parties Speak
One of the more recent high profile attempts to understand the panoply of policy choices facing Ontario’s voters was a gathering of the key energy representatives of each major political party on TVO’s The Agenda with Steve Paikin. On September 7, 2011, Paikin’s episode The Debate: Energy and the Ontario Election featured Ontario Energy Minister Brad Duguid, PC Energy Critic John Yakabuski, NDP Energy Critic Peter Tabuns, Ontario Green Party Candidate Steve Dyck, and energy analyst Steve Aplin.

Just as helpfully, the Ontario Sustainable Energy Association took the month of August to put together a similar roster of party representatives (only switching out Dyck with GPO Leader Mike Schreiner) to address issues such as renewable energy, conservation and community power more specifically. In a series of one-on-one web interviews, OSEA Executive Director Kris Stevens asked each party about their positions on the preceding issues.

Blackout – The Conservatives Remain Mum
Unfortunately, after interviewing Duguid, Tabuns and Schreiner, Stevens was forced into sending out a public letter to the OSEA community announcing that Conservative energy critic John Yakubuski had withdrawn from participating in the interviews. Stevens explained that Yakabuski’s office had indicated several months ago that Yakabuski would participate in a session. However, after weeks of delays, further promises of participation, offers on Steven’s behalf to travel to the riding of Renfrew-Nipissing to interview Yakabuski and a variety of other efforts, the Conservative candidate cancelled his participation. As Stevens' put it:

Silence sometimes speaks louder than words. We are left to assume that the Conservative party has no plan for conservation, community-based renewables, the private sector or manufacturing beyond killing what has been heralded as the most progressive energy policy in North America.

It is with deep gratitude that this blog can post the work of OSEA volunteer (and occasional Wakulat|Law guest blogger) Neil Fairhead who put together and shared the following summary of the three parties who participated in the OSEA interview process. The party positions appear in alphabetic order: Green Party, Liberal Party, and NDP. 

Green Party - Conservation, Efficiency and Community
Mike Schreiner, Party Leader, laid out an approach to energy for Ontario that places an emphasis on efficiency, conservation and the involvement of local communities.

Schreiner stated “no more investment in nuclear” since the average overrun on nuclear projects has been five times the original budget. This money would be better spent on conservation where half the cost would save the same amount of power and create nine times the jobs - retrofitting current housing, insulation and providing solar thermal heating of domestic water.

He also emphasized the need to get much closer community involvement. In particular, the benefits of renewable power must be shared locally. In Germany, over 200,000 people have equity stakes in local projects. This local involvement is essential to balancing the interest of local communities with the broader needs of the whole province. To achieve this, the Green Party will ensure community access to capital and priority access to the grid. They will also focus on energy education, for both consumers and workers.

The Green Party's priorities are:

1. A programme on energy efficiency and conservation - “Reduced bills, same lifestyle”.
2. Revise the FIT process, focusing on communities so they invest more and they benefit more - financially with revenue and economically with jobs.
3. A new long-term energy plan with a broader supply mix including more combined heat-and-power, renewables and hydro - from Quebec and Manitoba as well as Ontario. The plan would include a budget so that businesses can invest in Ontario knowing they will have reliable, affordable energy.

Liberal Party - Green Energy Is Good for Ontario and for Ontarians
Minister Duguid, outlined a vision of Ontario based on four pillars:

1. A healthier environment for children as coal burning power stations are phased out;
2. A healthier electricity system that has not suffered brownouts nor blackouts nor needed large imports of high priced power this year - despite the record heat wave;
3. A healthy job market that has already bounced back from the recession, thanks in large part to 20,000 new jobs in clean energy - the rest of the economy remains fragile;
4. A healthier climate for investment - $20 billion have already been invested in the new green economy in Ontario.

The Liberal Party believes that it must balance the need to invest in the Province's ageing transmission and generation infrastructure, with the need to help households by minimizing rates such as the current 10% green energy rebate. Investing in conservation also helps households since the cheapest watt is the one we do not use. The Liberal Government has doubled the expenditure of its predecessor and believes this must continue as there are key improvements required to ensure a reliable, efficient and non-polluting supply of energy. These investments include more storage, a more flexible grid and meters that encourage ratepayers to use electricity when there is spare capacity and to reduce their usage at times of high demand.

The Liberals recognize that some changes are required and Duguid specifically highlighted the role of municipalities: “Municipal engagement is mandatory and, while the government is working to streamline the process, it will remain mandatory.” He also highlighted the value of using the same energy for both power generation and for heating through the use of combined heat-and-power plants. Finally he stated that the price paid for electricity from renewable sources will have to come down and that they are looking at price reduction milestones. However, he noted that the costs of production, such as solar panels, are already coming down which will enable the price reductions while still rewarding investment. The research going on in Ontario will help to drive the costs down further.

In short, the Liberal Party believes that their commitment to green energy has been good for Ontario and we should persist with it - to provide a cleaner, more healthy environment for our children and a more prosperous, clean energy based, economy. 

NDP - Waste Not Want Not
Energy Critic Tabuns started with three key points:

1. The province's current approach places too little emphasis on efficiency and conservation;
2. Nuclear power consistently goes over budget creating large cost overruns to be paid by the taxpayer or the customer. The current assumption that nuclear remains the source of half of our power needs to change.
3. The partial privatization of our electricity system has resulted in “hundreds of millions of dollars being paid to energy traders and producers who game the system.”

The NDP put much greater emphasis on efficiency and conservation. They stand for minimizing usage through less waste and greater efficiency; and then supplying much of what is needed via renewables. There are challenges in doing this. Our 20th century system is highly centralized: big nuclear plants, coal plants, hydro plants - and networks that move power outwards. The 21st century system is more dispersed. We need a distribution system to match if we want to keep up with the leaders. Ontario has rested on investments made in the 20th century such as at Niagara Falls. Now we need to invest for this century but new/renovated generation capacity is high cost compared to increasing efficiency and conservation. We need to do both together to deliver the affordable reliable power, which will create the political support needed to make this change. The energy system is a major determinant of income and productivity in Ontario. If we fall behind it will be difficult to catch up.

The NDP energy platform for the upcoming election has two main thrusts:

1. Conservation: avoid waste with increased efficiency to make the best use of the power consumed. This includes focusing on energy retrofits of buildings where much energy is wasted and on the Energy Star programme, improving the efficiency of appliances, etc.
2. A balanced approach to energy supply: the environment must benefit and so must the economy with all sources rigorously assessed for costs and benefits. Given the disaster at Fukushima, nuclear costs will increase as more safety factors are addressed. The NDP will not rebuild the Darlington nuclear plant, using the funds saved elsewhere including retrofitting housing. Green energy will grow in significance but only where the costs and benefits justify it.

Conclusion
The future of Ontario’s energy policy is at stake in this election. In the last few years, the province has become home to some of the most exciting clean energy projects in the world, like the world's largest solar photovoltaic farm in Sarnia and Canada's largest rooftop solar installation in Windsor. Ten wind turbines in 2003 have sprouted to more than 900 turbines and counting. And people who used to work at automotive plants are now building these solar panels and turbines.

While the PC Party is not making its energy policies as accessible to voters as the other parties, it is reasonable to conclude its approach would diverge significantly from support of the Green Energy and Green Economy Act. Their approach could kill some of these new energy jobs, stall innovation and increase dependence on dirty energy sources that contribute to asthma, lung disease and premature deaths.

Building an innovative economy for the 21st century requires risk-taking and comprehensive planning. Doing so effectively will enable Ontario to be a major international player in the trillion-dollar clean energy industry blowing around the world.

Doors Open: Green Energy Edition

The launch of Doors Open Toronto twelve years ago has conditioned Torontonians to enjoy one weekend a year of serendipitous cultural discovery as over 150 buildings of architectural, historic, cultural and social significance open themselves for free to public perusal. Developed as a millennium project in 2000, Doors Open Toronto has witnessed over 1.7 million people take advantage of the opportunity to learn about the city's history and celebrate its heritage.

The proponents of clean energy in the province of Ontario are taking a page out of the successful Doors Open playbook and flinging open fields to many of the province's clean energy projects for public view.  While Doors Open put its emphasis on history, the Green Energy Field Day is firmly fixated on the future looking at new forms of energy generation and some of the interesting architecture that is accompanying these projects.

On Saturday September 24th, all across the province, Ontarians are being given the opportunity to celebrate the early successes of the emerging clean energy economy. It's part of 350.org's Moving Planet, a global day of action with thousands of events around the world, highlighting the need for government action to move beyond fossil fuels and address the climate crisis.

The ZooShare Biogas Co-operative is one project that Wakulat|Law is proud to be a small part of. The project will be a community-owned biogas plant at the Toronto Zoo with immense 'poo-tential'. While not yet under construction, visitors can learn more about the project from its planners and dreamers from 10:00 to 16:30 at the National Forest Week display at 361A Old Finch Avenue.