Natural Resources Committee on April 27th, 2010

[Elizabeth McDonald]

On the electricity side as well you're going to see again that it's very scalable. If you look in Ontario at the microFIT program, the feed-in tariff program for homes, the uptake has been incredible. It has been double and triple the expectations that anyone had. I was at the Ontario Power Authority's open house last week. There were 500 people at it who were serious about adopting solar electricity and serious about the feed-in tariff.

What that does will of course drive down the price, making it more affordable, which is a concern you have. You're going to see that; you're going to see the use of building-integrated photovoltaics on large buildings in downtown Ottawa, downtown Toronto, and right across the country, using the electricity rather than just having glass for no use.

When you look at large energy companies, what you're seeing is that they're diversifying. We have members such as BP, and Enbridge is a major member of CanSIA, very active and really excited about what they're doing. So it's about the energy business and about people seeing the dynamic. Most energy businesses are going into solar because they see, as was said in our remarks, that it's very scalable. It has a lot of technological applications, both community and large scale.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

You were talking about a really broad range of applications there. In your opinion, then, where should the government be focusing its support? On biofuels we put most of our support at the production end so that we don't have to be involved, for example, in capital investment. We also put money in R and D. Where should the government be focusing its support? You've covered such a broad spectrum, and obviously you can't cover everything, so where should it go?

[Dr. Phil Whiting]

I think the biggest barrier to all renewable energies--and it's no different for us--is that you have an upfront investment for a long-term payoff. The length of the term of that payoff is gradually shrinking as the technology gets better and costs come down. And as the cost of conventional energy goes up, that payoff goes down. Without a doubt, it's very clear from studies all over the world that incentives provided by governments to help with that upfront cost produce the long-term payoff. So that's one place.

Second, there are a lot of regulatory challenges in the whole solar space. We're putting things on the roofs of buildings, and all the regulations and building codes and stuff you have to go through are complicated and mind-boggling. They're a serious barrier to the adoption of the technology.

There is a third area where government could help as well, I think. Large-scale systems in particular will be self-financeable. In other words, we can produce energy at less than the cost of grid energy today, but there's a capital cost that needs to be spent upfront in order to get those savings. There's enough of a gap to be able to produce a 10% to 14% return on investment, but the financing mechanisms to drive that are not in place at the moment. The financial institutions like banks don't know how to do that. If there were a way for governments to be able to help stabilize the financing of large projects, I think you'd see very large projects without really having to spend dollars. It could be a way to incentivize the industry.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

I guess in the case of just about every project in every area, if somebody else pays the capital cost, people should be able to make it operate properly. I'm not arguing against that. I'm just saying everybody could come with that request.

[Dr. Phil Whiting]

I'm not suggesting the government should finance it. The problem is in principle it's easy to do calculations to show that it should be able to be financeable, but it's complicated. Because you have federal regulations and provincial regulations and municipal regulations and sometimes utility incentives, trying to package all of that together, even though the numbers make sense, is complicated. There isn't an industry right now in Canada that can do that. In the U.S. it's happening quite regularly, but not so much here.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Will you be participating actively, then, in the regulatory review initiatives?

[Elizabeth McDonald]

Yes, we will be.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Okay, good.

I think I probably have a couple of minutes, but I'm wondering--

[The Vice-Chair, Liberal, Alan Tonks]

You have half a minute.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Can you talk a bit about the different technologies in the different regions and the different seasons? We probably don't have enough time for that, but I'm interested in how you see different applications of your technology in different areas of this country. We heard a little about diesel and diesel hybrids and that kind of thing.

[Dr. Phil Whiting]

Yes. Canada has lots of sunshine, and we've sold systems as far north as Alaska and Nunavut, and of course as far south as you can go.

There's a lot more sunshine available in Canada than you might imagine. So sunshine availability is not the limiting factor for us at the moment.

[The Vice-Chair, Liberal, Alan Tonks]

I think sunshine is probably a good note to finish on, Mr. Anderson.

We do have a vote coming up, so I'm going to try to get the committee out.

Thank you very much to our witnesses for being here.

Mr. Cullen, you raised an issue with respect to the overall investment on renewables. I'd ask the researchers if they could just take it up with Mr. Anderson and see if those figures can be made available.

Thank you very much.

Thank you to our witnesses again. The meeting is adjourned.