Are provincial subsidies for on-farm grid-tied solar projects dead?
And if they are dead, does that mean solar and other renewable energy projects have gone the way of the dodo as well?
It would be hard to fault anyone for answering ‘Yes’ to both questions. While on the campaign trail in February, now-premier, Jason Kenney made his intentions clear — if elected, his government would no longer support “unprofitable” solar and wind power. While it’s early in the United Conservative Party’s tenure, there’s little to no indication the party has changed its mind on the matter.
Ask Todd Herron, however, and he’ll tell you the answers are not that simple.
Producer interest in adding solar to their energy mix has remained strong throughout the past year — even after Kenney’s comments on subsidies, said the executive director of the Solar Energy Society of Alberta.
“I can say unequivocally that rural demand (for our workshops) is really strong. Every one of our sessions has been very well attended,” he said. “I think the farming community is taking the same breath that the solar industry is taking; they are sort of seeing which way things are going.
“And it might be that we won’t see any change in demand at all (without subsidies) because the return on investment is still positive. Farmers are generally comfortable with making long-term investments, which solar is.”
Herron and other solar advocates have some reason to be optimistic about the government’s involvement in solar power investment.
One veteran government consultant told the audience at the Solar Canada Conference in Calgary in May that changes can be expected under the new government, Radio-Canada reported at the time.
However, the UCP is not the party of human-made climate change deniers, Michael Lohner with Crestview Strategies said at the conference.
“People in Jason Kenney’s government believe in human-induced climate change, but that’s not what makes them get up in the morning,” he said.
Rather, the party is driven by a strong desire to distance itself from the former NDP government’s climate change plan.
“It has a strong belief that renewable energy must be competitive compared to other energies on the market.”
This gives Herron some hope, because he and other solar advocates believe solar energy is profitable. The first step towards future on-farm solar subsidies will be to bring that message to the ear of government, he said.
The levelized cost (which measures the cost of an energy system over its lifetime) is the same for solar as it is for natural gas and coal, he said.
“That tells you how competitive solar is, and the price of solar is dropping. That speaks to me as to where the future of the industry is going. It will exceed the pure, hard economic math of it all.”
He said he is unsure of the numbers Kenney based his “unprofitable” comment on, but he sees the opposite.
“The utility level is going massively into solar because the price of solar has dropped so much. I see heavy, heavy investments in solar going forward. It’s gone beyond being a fringe, novelty, hobby-type of technology to something that is very mainstream at the utility level.”
He sees this investment translating into jobs in Alberta.
“We are talking about billions of additional dollars being added into the industry overall. We predict the solar industry in Alberta going from about 1,000 jobs now to 8,800 by 2030. It’s a good news story.”
Still worth the investment?
All that may be well and good, but if you’re a farmer looking at making an investment in grid-tied solar technology, the most important thing you want to hear is whether it’s going to pay off — especially if there are no subsidies on offer.
Larger solar power projects have reached a point where there is less need for subsidies, Eric Cantin, solar energy associate with engineering firm CIMA+, said at the Solar Canada Conference, according to the Radio-Canada report. However, smaller ones — which most farm projects would likely fall under — will still need support, Cantin said. (Kenney is on record saying the government has no intention of backing out of existing good-faith contracts.)
What life after subsidies would look like is probably the most common question from producers at the Solar Energy Society of Alberta workshops.
“The question of ‘Can we still get a return on investment without subsidies?’ is one we get quite often,” said Herron.
“We answer that it depends on a lot of things: the level of investment, the type of technology installed, even your location in the province can make a big difference.
“There’s a wide range there but I think at the end of the day it’s still going to turn into a positive number for ROI (return on investment). It can range from 12 to 15 to 20 years depending on a bunch of input parameters, but at the end of the day it’s still a positive number.”
Alberta Agriculture and Forestry did not respond to requests regarding the status of the on-farm solar program, but the web page for the program (established by the former NDP government) had not been taken down as of early June.
Along with questions about profitability and subsidies, producers are asking a lot of technical questions about installing solar photovoltaic systems, said Herron.
“‘Where do the materials come from? Where do I find a good supplier and installer?’ Some of them ask questions about insurance, how long do solar panels last — that sort of thing,” he said. (Answers to many of these questions can be found at solaralberta.ca)
Some farmers are asking about systems which actually track the sun, maximizing the solar PV panels’ exposure to sunlight. While a great idea in theory, Herron said the motors needed for such a system can be very expensive, and the ROI often makes fixed panels a better bet.
Much like previous years, some producers are interested in producing enough solar power to escape the electrical grid completely. Herron generally does not recommend this.
“If you decide to go completely off the grid you’re not only looking at investment in solar; you’re also looking at investment in storage, and storage is expensive,” he said.
“We expect the price of storage to come down, but right now it is a significant factor. We recommend going with a grid-tied solution for now. If the price of storage comes down later maybe you can add it in.”