The relationship between the solar industry and the Canadian Government is a complicated one. When the cameras are rolling, the Government shows itself as the loving and supportive partner. It upholds solar energy as the prized ticket to a greener future. But when the cameras aren't watching, the Government transforms into the abusive partner. Wiping out entire markets overnight while leaving others in limbo. All the while, the Government is really concealing their mistress, immense subsidies for oil and gas.
Despite this love hate relationship, the solar industry has never been able to fully separate itself and stand on it's on two legs. Herein lies the problem. The solar industry needs the Government.
Over the past 10 years the price of solar panels has dropped by about 89%. Although those drops in prices are beginning to level off, this shows immense progress in the sector. Worldwide investments in the technology have also seen efficiencies increase steadily over the same time period. Yet despite all of this progress, the industry has struggled to see any market growth in areas without Government subsidies.
There have been a few disastrous examples of this dependence in the past. One of the most swift and notable ones happened in 2017 with the end of the MicroFIT program in Ontario. The MicroFIT program was a Feed-In-Tariff incentive program where homeowners could sell their solar energy back to the electrical grid for an above market, premium price. This premium was used to incentivize homeowners to take on the large up front investment of solar, and help them pay off their systems within a reasonable amount of time.
There were many problems with the program from the start. The "premium" rates were a little too ambitious and after a few years and thousands of installs later, Ontario homeowners were left picking up the very substantial bill.
With it's problems aside, the MicroFIT program was responsible for a booming solar industry in Ontario. Hundreds of companies and thousands of jobs were created due to the demand for these MicroFIT contracts. Things were looking bright in Ontario. The Liberal Premier, Kathleen Wynne, promised future rebates and incentives for the industry. It seemed as though the solar gold rush in Ontario was only beginning, until one day, seemingly overnight, it died.
Doug Ford, the newly elected Conservative Premier, moved to end all solar incentives and subsidies in the province immediately.
Just like that, the entire residential solar industry in Ontario was squashed. Many installers looked to shift their operations to other Provinces in order to survive, and unfortunately most did not make it.
This tale is just one of many, that serves as a grim reminder of what an industry dependent on Government subsidies can look like. The tale of an abusive lover. It has happened before and it will happen again.
Flash forward to today, the newly released Federal 'Canada Greener Homes Program' sets out to correct the traumas once caused by Provincial subsidies. The nation-wide program boasts a $5,000 rebate and up to $40,000 financing at 0% interest to convert your home to solar energy.
With the Bank of Canada raising interest rates, a chance to secure 0% interest for solar panels is a huge opportunity. However if you've been following the theme of this so far, you've probably already guessed, it comes with a catch.
There are two main issues with the newly announced 0% program. We will ignore for now, the plethora of technical issues involved with the website and long wait times for approvals, and just concentrate on more fundamental issues.
The first issue is the term of the loan. The Government has only given homeowners one option, finance your system at 0% over 10 years. The problem with a short term like 10 years is that for a homeowner that was paying $180 / month before solar, they are now looking at $360+ per month for their energy after solar. While paying more per month for 10 years is better than coughing up $25k-$40k upfront, it still makes this program prohibitively expensive for those that cannot afford to, more than double, their payments for the next 10 years. Some will take advantage undoubtedly, however this is not the "aid-for-the-masses" that this was sold as.
The second issue with the program, is that although it is a great opportunity for those homeowners that can afford it, it helps very little for the contractors and installers that are expected to satisfy this solar demand. The Program allows for a 15% deposit to be paid to the contractor in advance, with the remaining 85% to be paid within 2 months after the installation is complete. Many solar installers already survive on slim margins (despite the large price tag for a turn-key system). 15% does not help much when it can cost upwards of $20k-$35k just to build a solar project from start to finish. This changes the industry into a game of "who can take on more debt" in order to survive.
This has lead many installers to try and rely on bridge financing, which just further complicates the process of going solar for the average consumer.
Just like the abusive lover, the Government promises us they will change, but we both know deep down, nothing changes. If Canadians truly want to see a future where our nation is energy independent, and a beacon for technological progress around the world, we need only one thing.
Change.
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