Previously published in the December issue of the Distillery District Magazine
There’s a silent, green revolution happening across the U.S., and Canada is missing out. It’s fuelled by solar developers willing to risk big, government policies that support them, and a local demographic of citizens who want to choose cleaner sources of energy at a lower cost. It’s called Community Solar and it’s giving access to clean energy to anyone interested in choosing renewable electricity but who may be unable to install or afford solar panels at their home or place of work.
What is Community Solar?
A community solar project brings the cost benefits of large utility scale solar projects on landfills, industrial or otherwise unusable agricultural land to local residents and businesses who may want to choose solar but can’t afford the upfront investment or don’t have the space. They can choose to “subscribe” and virtually buy the clean energy produced at a savings to their current utility bill, usually 10%. The utility helps customers with the crediting and billing as the power generated is delivered directly into the grid and becomes a part of the electricity mix that serves the region. This allows all stakeholders drive down the price of energy, usually at prices lower than other forms of conventional energy.
Strong Clean Energy Policies
The U.S has been promoting clean energy for almost two decades with the Federal Investment Tax Credit (ITC) that allows project owners to offset 30% of the costs against their taxes. Since 2006, the U.S. tax credit has supported explosive, annual growth of 52% in the solar market and created over 260,000 jobs across the U.S. making the industry a major economic and environmental powerhouse.
In addition, a number of states provide additional incentives for community solar, but more importantly, they have made regulatory reform a top priority. By focusing on capturing the true value of solar and distributed energy resources, states are able to provide solar credits at or lower than current retail electricity rates. The combination of federal and state incentives, and constructive policy design allows solar companies to pass on significant savings to consumers, making the choice to go green easy.
Solar Projects in Canada
It would be nice if we could say that Canada has mirrored the innovation and growth seen in the U.S., however, in the last decade, we’ve seen jurisdictions across Canada, and in particular, Ontario continually botch renewable energy policies or cut programs that has resulted in less choice and higher energy prices for our citizens. One such program is the Ontario Feed-in Tariff (FIT) program. Developed in 2007 and launched in 2009, the program was meant to promote and encourage renewable energy sources like solar. And it worked. Ontario experienced a boom in solar development with hundreds of small and large projects representing billions of dollars in invested capital contracted in 2010. Yet, the program experienced significant delays and was ultimately closed to new applications in 2016.
While opponents of these policies and subsidies, point to the wasted dollars buying unneeded power at above market rates, those of us in the industry can see the many intangible benefits the program was meant to create, the technical know-how and skilled job creation needed to drive down costs, a vibrant industry able to compete around the world, and a reduction in the overall carbon footprint of the Province and setting us on a path towards a carbon free future. When was the last time the City of Toronto issued a smog alert?
In 2009, I founded OYA Solar to develop and own rooftop and ground mount projects under the FIT program and provide energy savings from solar to our customers. We were successful in developing dozens of projects across the Province that are still in operation today. One of our projects, a ground mount-system in Newcastle, is welcomed by the local community as a place to walk their dogs, and the project helped prevent the largely rural area from being developed into a housing subdivision, allowing the residents to maintain their privacy. Yet, long before the cancellation of the FIT program in 2016, we saw the political headwinds coming and began to look at other markets in the U.S. We have since developed and built projects in Minnesota, Massachusetts, Illinois and New York State. We employ almost 50 people in Canada while driving climate action in the US and consider ourselves a role model for the type of sustainable, tax paying business that good government policy can create. Unfortunately, the situation in Ontario doesn’t look to be changing any time soon. In July 2018, Doug Ford pulled out of 758 early-stage renewable energy contracts at a cost to tax payers of $241 million using cost-savings as his primary justification.
The solar industry continues to lobby for changes to the regulatory framework, such as virtual net metering, community solar and third-party ownership of net metered systems that would enable significant investment in the Province and allow solar to compete in Ontario without subsidies at market competitive rates.
However, all is not lost for solar in Canada. Saskatchewan and Alberta have both set renewable targets for 2030 at 50% and 30% respectively. Both these provinces stand to benefit from the significant know how, expertise and investment created in Ontario. In fact, Ontario companies will stand to benefit as these markets mature. The world is seeing an incredible decline in the cost of solar due to the benefits of lower costs in manufacturing, new technological breakthroughs and installation best practices.
The People on the Front Lines
There are two groups of people who are often overlooked when talking about community solar, the farmer who’s land we lease, and the subscribers of the power. Farmers are facing increased pressure to keep their farm in the family. Several are losing money. We provide farmers a solution by leasing a portion of their land for solar, while allowing them to continue farming the balance as they always have. The 25 to 35 years of lease payments provide them immediate financial security. It can mean sending a child to college, paying off debt or financial security for an elderly spouse. For Lloyd Garnsey, in Upstate New York, that means he can now pay his grandchildren’s college tuition.
But Lloyd is not the only one who benefits; businesses, organizations and individual households who choose to subscribe to the energy save money every month and make an affirmative choice to contribute to a cleaner environment in their community. Their choice to buy green energy will eventually roll up into the utility’s decision to buy less power from dirty sources. We’ve had some large municipalities like the town of Montevideo in Minnesota sign on for this very reason. But the most positively impacted subscriber in the Community Solar market is the Low and Medium Income (“LMI”) community. This segment of the population is typically overlooked and underserved. The LMI community doesn’t usually have an option to invest in or buy clean energy, but now, their ability to choose without the need for a credit check or long-term commitment can help to create positive change in their community. The LMI community is the key to unlocking the full benefits of Community Solar and driving last action on climate change.
Solar has come a long way from its initial beginnings as a hobby industry for off grid or small rooftop installations and is now a catalyst in the clean energy transition we are undergoing. It is important to ensure that we lobby for policies that allow us to maximize the benefit of solar in our energy mix, enable access and choice to all consumers, and enhance the vibrancy of our communities on our path to achieving our climate goals.