A NATIONAL FRAMEWORK FOR SOLAR HOT WATER

A NATIONAL FRAMEWORK FOR SOLAR HOT WATER

A NATIONAL FRAMEWORK FOR SOLAR HOT WATER

A National Framework for Solar Hot Water Developed for Greenpeace Canada Prepared by Nitya C. Harris

A NATIONAL FRAMEWORK FOR SOLAR HOT WATER

A National Framework for Solar Hot Water Developed for Greenpeace Canada Prepared by Nitya C. Harris © copyright December 2006 Greenpeace Canada 250 Dundas St. W., Suite 605 Toronto, Ontario, Canada M5T 2Z5 Tel: 416-597-8408 Greenpeace is an independently funded organization that works to protect the environment. We challenge government and industry to halt harmful practices by negotiating solutions, conducting scientific research, introducing clean alternatives, carrying out peaceful acts of civil disobedience and educating and engaging the public.

Greenpeace staff and volunteers seek to: • Protect biodiversity in all its forms •  Prevent pollution of the Earth’s oceans, land, air and fresh water • End all nuclear threats • Promote peace, global disarmament and non-violence.

A NATIONAL FRAMEWORK FOR SOLAR HOT WATER

Greenpeace Canada A National Framework for Solar Hot Water  Table of Contents Foreword . 3 Acknowledgements . 4 Acronyms . 5 Executive Summary . 6 1. Introduction . 8 2. Solar Hot Water: Background . 9 2.1 Why Solar Hot Water . 9 2.2 Solar Hot Water in the World . 13 3. Solar Hot Water in Canada . 14 3.1 Current Situation .

14 3.2 History of Solar Hot Water in Canada . 15 3.3 Barriers to Solar Hot Water . 18 4. Vision for Solar Hot Water in Canada . 20 4.1 Markets for Solar Hot Water Systems . 20 4.2 Technical Potential . 20 4.3 Targets . 22 4.4 Vision . 23 5. How to reach the Vision . 24 5.1  Key Issues for Sustainable Market Development . 24 5.2 Actions at the National level . 32 6 Next Steps . 34 References . 35 APPENDICES A. SWOT Analysis . 37 B. How do Solar Hot Water Systems Work . 41 C. Solar Potential calculations . 42 D. Existing Renewable Energy Capacity 2004 . 43 E. Lessons Learnt . 44 F. Solar Hot Water Industry in Canada .

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A NATIONAL FRAMEWORK FOR SOLAR HOT WATER
A NATIONAL FRAMEWORK FOR SOLAR HOT WATER

Greenpeace Canada A National Framework for Solar Hot Water  Foreword Let the Sunshine in – on a Million Solar Roofs Solar hot water has clear benefits for Canadians. By using free solar energy, you will reduce your energy costs. You will also reduce greenhouse gas emissions. The burning of fossil fuels is rapidly driving our planet into an unprecedented climate change crisis. Rising temperatures, rising sea levels, melting ice, and extreme weather events are just some of the most obvious impacts. Solar hot water can provide a large percentage of residential water and space heating, typically reducing annual energy costs 40 to 60 percent.

Water and space heating account for about 80 percent of residential energy use.

So why is Canada an international laggard in solar hot water? Austria, with a similar climate and a population of only 8 million, has about 110 times more solar hot water than Canada. The answer is obvious. While solar hot water is a cost-effective, mature, and sustainable technology, it has not had consistent meaningful support from federal and provincial governments. Solar hot water can reduce energy costs for the average Canadian, and protect the environment. Federal and provincial politicians must work together to create significant incentive programs and achieve these benefits. Greenpeace proposes a long-term national vision – the Million Solar Roof Program.

Regional programs aiming at 100,000 or more installations are achievable in the short- term.

It’s time to let the sunshine in – on a Million Solar Roofs. David H. Martin Energy Coordinator, Greenpeace Canada

A NATIONAL FRAMEWORK FOR SOLAR HOT WATER

Greenpeace Canada A National Framework for Solar Hot Water  Acknowledgements We thank the following individuals for providing information and/or reviewing parts of this study: Yossi Cadan, Campaigns Director, Greenpeace Canada David Martin, Energy Coordinator, Greenpeace Canada Teun Bokhoven, Conergy Europe Werner Weiss, AEE INTEC, Austria Jeff Knapp, Renewable Energy Deployment Initiative, NRCan Clifford Maynes, Executive Director, Green Communities Canada Doug McClenahan, CanMet, NRCan Rob McMonagle, Executive Director, Canadian Solar Industries Association Joyce McLean, Director, Strategic Issues, Toronto Hydro Corporation Mary Pickering, Associate Director, Toronto Atmospheric Fund Melinda Zytaurk, General Manager, Ontario Sustainable Energy Association Guy Dauncey, President, B.C.

Sustainable Energy Association

A NATIONAL FRAMEWORK FOR SOLAR HOT WATER

Greenpeace Canada A National Framework for Solar Hot Water  List of Acronyms ACCC Association of Canadian Community Colleges BCSEA B.C. Sustainable Energy Association CANMET Energy Technology Centre (NRCan) CANREA Canadian Renewable Energy Association CanSIA Canadian Solar Industries Association CSA Canadian Standards Association DHW Domestic Hot Water DSHW Domestic Solar Hot Water ESTIF European Solar Thermal Industry Federation FCM Federation of Canadian Municipalities GJ Gigajoule—Unit of energy equal to 1,000 million joules or 950,000 BTUs. HRSDC Human Resources and Social Development Canada I/C/I Institutional, Commercial , Industrial sector ICLEI International Council for Local Environmental Initiatives IEA International Energy Association MW Mega Watts (1 million watts) NGO Non-governmental organization NRCan Natural Resources Canada OSEA Ontario Sustainable Energy Association PASEM Program for Assistance for Solar Energy Manufacturers PUSH Purchase and Use of Solar Heating Program PV Photovoltaics REDI Renewable Energy Deployment Initiative (NRCan) SEDP Solar Energy Demonstration Program SESCI Solar Energy Society of Canada Inc.

SHW Solar Hot Water

Greenpeace Canada A National Framework for Solar Hot Water  Executive Summary Worldwide, solar energy is playing an increasingly important role in reduction of fossil fuel use and greenhouse gas emissions while fostering local economic development. Solar hot water (SHW) applications are one of the least expensive ways to generate heat in residential and commercial uses. Markets for solar hot water and space heating are increasing around the world at impressive rates of about 26% per year. Though solar hot water has grown dramatically throughout the world, this has not happened in Canada. The International Energy Association ranked Canada as 31st out of 41 countries for cumulative installed capacity of glazed SHW systems at the end of 2004.

This report examines the barriers to the installation of solar hot water systems in Canada and will address the questions: 1.  Why has solar hot water not flourished in Canada as a renewable energy solution for water and space heating?

2.  What are the strategic initiatives that need to be put in place nationally to facilitate the development and success of solar hot water programs in communities throughout Canada? It is ascertained that large-scale use of solar hot water systems in Canada will address a number of anticipated concerns and potential opportunities for Canadians including the following: reduction of greenhouse gas emissions reduction of other external costs casued b fossil fuels and nuclear power security and diversity of energy supply replacement of conventional non-renewable energies with renewable energy de-centralized power owned by Canadians reduction of greenhouse gas emissions reduction of other external costs caused by fossil fuels and nuclear power creation of local jobs development of domestic and export markets for solar expertise and equipment However, there are still many barriers to the development of solar hot water programs in Canada.

They include: • lack of public awareness of the technology • lack of solar awareness in architects, engineers, builders, and in the real estate, tourism, banking, and commercial sectors • lack of qualified and motivated installers • quality assurance for solar systems • high up front costs for SHW systems • lack of incentives for homeowners and builders • lack of political will and governmental support. • • • • • • • • •

Greenpeace Canada A National Framework for Solar Hot Water  Austria’s successful solar hot water program is a good model for Canada to follow. Based on Austria’s market development, the target proposed for Canada is 1 million SHW systems by 2025, with 2.5 million square metres of commercial collector area. European experience suggests that there are three critical components that form the basis for sustainable SHW market development and growth. They are: 1. Public awareness 2. Strong market infrastructure 3. Incentives and regulatory support. The implementation of any of these components by itself leads to a strong potential of failure of the program.

Therefore, it is important that all three components be addressed congruently and at national, regional and local levels. Overall stable, constant framework conditions prove effective for market development. A number of key initiatives that need to be in place for a strong solar program in Canada have been discussed in this report. In the course of implementing the actions towards a comprehensive solar program, it is important to involve actors at provincial, regional, local and the utility level. In this report, only the national actions have been selected and summarized in the table below.

National Actions Required Commit to a “Million Solar Roofs” program for Canada. Support the Million Solar Roof Program. Forms of support could include: • direct financial support for purchase & installation • federal tax credits; establisment of a low- or no-interest loan program • a Standard Offer Contract syserm for SHW. Support a Solar Cities Program. Implement a national awareness campaign to inform people of the advantages of using solar energy. Sponsor training of architects, engineers, utilities, developers and real estate agents. Implement demonstration projects to raise the profile of the technology.

Provide funding for a “Solar in Schools” program. Establish national standards for systems that are harmonized with United States and Europe. Include SHW criteria in the National and Provincial plumbing codes. Establish national standards for installers. Subsidize training programs for plumbers and heating contractors. Develop programs with utilities. Initiate a Canada-wide solar system monitoring program to create a reliable data resource. Establish a solidly funded long-term solar program in NRCan.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

Greenpeace Canada A National Framework for Solar Hot Water  1.

Introduction Solar water heaters convert sunlight into heat that is transferred by liquid to where it is used or stored. Solar collectors are mounted in sunny locations and contain a heat transfer fluid, usually water or glycol-based fluids. The heated fluid is pumped from the collectors to a heat exchanger which transfers the solar heat to either the building’s hot water or space heating system. SHW is a mature, economic and sustainable technology that can improve energy efficiency while reducing greenhouse gas emissions. The global installed capacity of solar thermal systems by the end of 2004 was 98,416 MW of thermal energy.1 The world’s solar thermal sector has grown ten times faster than the overall economy over the past five years, and the annual yield (energy produced) for solar thermal collectors in 2004 was 58,117 GWh, equivalent to 9.3 billion litres of oil.2 As shown below in Figure 1, the produced energy from solar thermal is second only to wind in comparison with other renewable energy technologies in the world while its installed capacity is greater than other renewables.

Worldwide, the capture and use of solar energy is playing an important role in local economic development while reducing CO2 emissions. Solar hot water (SHW) applications are one of the least expensive ways to generate heat in residential and commercial uses. It can typically provide 40–50% of residential hot water heating and 15% 1 See: International Energy Agency Solar Heating & Cooling Program, Solar Heat Worldwide: Markets & Contributions to the Energy Supply 2004. This global capacity includes 40,299 MW-th of evacuated tube water collectors, 34,184 MW-th of glazed water and 23,117 MW-th of unglazed water collectors, as well as 641 MW-th of unglazed air and 175 _MW-th of glazed air collectors.

2 The statistics are based on data collected from 41 countries, representing 57% of the world’s population and 90% of the solar thermal market. Source: IEA, 2006 Figure 1: Cumulative capacity and annual energy generated 2005 (IEA 2006)

Greenpeace Canada A National Framework for Solar Hot Water  of commercial hot water heating requirements at a cost below the current price of electric water heating in many provinces. Solar hot water panels are a cost-effective way to harvest the sun’s energy. Instead of solar panels that make electricity, these solar panels collect the sun’s heat.

The heat from the collectors is then used to heat the hot water, or pumped through water lines embedded in the floor or through panels mounted to the wall. Solar hot water systems can be used in homes, commercial enterprises such as restaurants, car washes, and hotels, in hospitals and for swimming pools. Though SHW has grown dramatically throughout the world, this has not happened in Canada. This report will examine the barriers SHW in Canada and will address the questions: 1. Why has solar hot water not flourished in Canada as a renewable energy solution for water and space heating?

2. What are the strategic initiatives that need to be put in place nationally to facilitate the development and success of solar hot water programs in communities throughout Canada?” Many communities across Canada have shown interest in accelerating the installation of solar hot water systems in their buildings. It is very difficult for each community to expend the energy necessary to develop solar infrastructure such as tax incentives, system quality control criteria, installer qualification criteria, and regulations. These infrastructure measures need to be established nationally to help these communities move forward with their solar programs.

Therefore, some key measures need to be in place nationally to help these communities develop initiatives that will foster the development of solar communities. 2. Solar Hot Water Background 2.1 Why Solar Hot Water? SHW systems provide energy security with minimal environmental impacts. Advantages include avoided transmission losses as the energy is locally produced and the flexibility of the technology — systems can be easily retrofitted to existing buildings or built into new buildings. And, SHW systems are competitive with conventional systems in many parts of Canada.3 Furthermore, they contribute to community economic development and a sustainable economy through the building of a domestic industry.

This renewable energy technology directly addresses the reduction of energy and greenhouse gases from the two largest energy uses for households.

The establishment of large-scale use of solar hot water systems in Canada will address a number of anticipated concerns and potential opportunities for Canadians including the following: • Security and diversity of energy supply • Replacement of conventional non-renewable energies with renewable energy • De-centralized power owned by Canadians • Reduction of greenhouse gas emissions • Reduction of other external costs caused by fossil fuels and nuclear power • Creation of local jobs • Export of solar expertise and equipment 3 On an energy basis, the cost of solar thermal energy ranges between four to seven cents per kWh over the system’s 20 year life expectancy (DSF, 2004)

Greenpeace Canada A National Framework for Solar Hot Water 10 2.1.1 Security and Diversity of Energy Supply As increasing population and urbanization continue to exert unprecedented strain on utilities in all the provinces, it is desirable to establish a diversity of energy sources for the future. SHW has the potential to be widely used in homes and businesses across Canada and can therefore reduce the need for outside energy sources. Since these systems also have the ability to contribute to the reduction of peak loads during the day, they can be a factor in advancing utility load management goals and in enhancing the longevity of fossil fuels.

A study done by the David Suzuki Foundation (DSF, 2004) indicates that while an average house in Ontario used 116 GJ of outside energy annually in 2001 – this figure could be reduced to less than 50 GJ when solar energy usage is maximized and integrated with energy efficiency measures. Upon installation of a solar hot water system, the solar portion of the energy costs for the home will not vary over the life of the system. The solar hot water system thus provides inflation- proof energy security in the face of increasing fossil energy prices in the future. 2.1.2 Replacement of Conventional Energy Domestic water heating is the second largest energy end-use for Canadian households, exceeded only by space heating, and as shown in Figure 2, accounts for approximately 24 percent of total household energy consumption (NRCan, 2006b).

Together, water heating and space heating account for approximately 81% of the energy use in a home which in 2004 constituted 1159 PJ (Table 1). As can be seen from Table 2, 95% of this energy usage is from electricity and natural gas. Installation of an SHW system can contribute a sizable portion of the energy used towards both domestic hot water and space heating for a home that is presently utilizing electricity or natural gas. Table 1: Residential and Commercial/ Institutional Energy Use (NRCan, 2006b) End-use Residential Energy Use (PJ) 2004 (12,375,000 households, 1545 million m2) Comm/Instit Energy Use (PJ) Water heating 348 42 Space heating 811 N/A Table 2: Energy Source for Domestic Water Heating in Canada4 Electricity 37% Natural Gas 58% 4 From NRCan, 2006b

Greenpeace Canada A National Framework for Solar Hot Water 11 In Residential and Commercial sectors, total energy demand is expected to increase at about 1 percent per year for the residential sector, and at 2.4 percent per year for the commercial sector (NRCan, 2006c) even with the inclusion of intensity improvements in these sectors. This sizable demand for energy for domestic hot water heating can be augmented by SHW systems. Space heating can also be provided by SHW in new construction. 2.1.3 De-centralized Power Owned by Canadians The absence of transmission and distribution losses is another advantage of such a de- centralized energy source.

In the wake of concerns of energy being controlled by trans- national corporations or by hostile nations, the locally produced energy from solar hot water systems has the added attribute of being owned by Canadians.

2.1.4 Reduction of Greenhouse Gas Emissions There is now worldwide agreement between scientiststhattheburningoffossilfuelssuchascoal, oil and natural gas is the cause of climate change. In 2004, approximately 25% of total Canadian residential greenhouse gas (GHG) emissions was attributed to domestic water heating, an estimated increase of 14% since 1990 (NRCan, 2006a). Table 3 below shows the breakdown of GHG emissions from residential water heating by energy type. The installation of a solar hot water system can eliminate between 1 to 2 tonnes per home per year based on energy usage.

In the space heating sector, single detached houses contribute 75% of the GHG emissions of all emissions due to space heating in the residential sector.

The following table shows the breakdown by energy type for GHG emissions for space heating in single detached homes. Table 3: Residential Water Heating GHG Emissions by Energy Type Energy Type GHG Emissions (Mt of CO2e) 2004 % of total GHG emissions for water heating in residential sector Electricity 8.03 41.8% Natural Gas 10.12 52.7% Heating Oil 0.97 5.1% Other 0.05 0.3% Wood 0.02 0.1% Total 19.20 100% Table 5: GHG Emissions for Water and Space Heating End-use Residential GHG Emissions (Mt) Comm/Instit GHG Emissions (Mt) Water heating 19 3 Space heating 41 N/A Table 4: GHG Emissions from space heating by Energy Type: Single Detached Houses Energy Type 2004 GHG Emissions (Mt of CO2e) % of total GHG emissions for space heating Electricity 5.80 18.7% Natural Gas 17.36 56.1% Heating Oil 5.53 17.9% Other 0.51 1.6% Wood 1.77 5.7% Total 30.97 100%

Greenpeace Canada A National Framework for Solar Hot Water 12 The federal government ratified the Kyoto Protocol in 2002, which commits Canada to reduce its GHG emissions by 6 percent per year (from 1990 levels). Canada’s 2002 climate change plan committed the country to cut greenhouse gas emissions by 240 million tonnes a year by the end of 2012. As space heating and water heating contribute 79% of total GHG emissions from a home (NRCan 2006a), there is considerable potential to reduce GHG emissions by integrating solar hot water into space heating and water heating in buildings. The installation of a solar hot water system alone can eliminate between 1 to 2 tonnes of CO2 per home per year based on energy usage.

2.1.5 Reduction of Other External Costs Caused by Fossil Fuels and Nuclear In looking at the comparative costs of different energy sources, it is important to identify the total cost of the energy including the public health and environmental costs. This is a difficult task and is open to many interpretations. One such comparison has been formulated by Professor Bainbridge (Fig. 3). Although there is considerable discussion about the exact costs of each energy source, the relative costs deserve to be examined. This figure shows that solar hot water is the leader in this realm, most probably due to the simplicity of the technology and the resulting low environmental and social impacts.

Further research is required to quantify the external costs of energy sources. This is an essential step to ensure more accurate price comparisons between distributed generation options such as SHW, and fossil fuel and nuclear- generated energy.

5 David Bainbridge is an Associate Professor of Sustainable Management, Marshall Goldsmith School of Management, Alliant International University, San Diego, California Source: Bainbridge,5 D.A. 2004. The price falls short. Solar Today 18(5):62,59

Greenpeace Canada A National Framework for Solar Hot Water 13 2.1.6 Creation of Local Jobs The solar hot water industry is ideal to produce jobs at the local and national levels as most of the jobs relate to marketing, distribution, design and installation of the systems. The Canadian Solar Industries Association estimates that 6 jobs can be created per 1,000 m2 of solar hot water collectors installed without the inclusion of maintenance personnel.6 The solar thermal sector in Europe employs over 20,000 people and is a 2 billion Euro business.7 2.1.7 Export of Solar Expertise and Equipment An ambitious target for solar hot water systems in Canada will develop a promising market opportunity to create new business opportunities for this resource in our country, and export opportunities for solar expertise and solar systems to other parts of the world including the United States.

2.2 Solar hot water in the world Markets for solar hot water and space heating are increasing around the world at impressive rates of about 26% per year. Existing solar hot water collectors have the fourth highest capacity (2004) in renewable energy production after large hydro, small hydro and biomass. Forty million households out of a total 1600 million households worldwide have solar hot water (DSF, 2004). The development of solar hot water programs in many countries has been driven by the awareness of potential world markets and export opportunities by federal and regional levels of government.

At the end of 2004, a total of 164 million square metres (m2) of solar thermal collectors were installed in 41 IEA member countries, with about 71% of collectors in use for hot water and space heating, 28% for heating swimming pools, and 2% for drying agricultural products and space heating. All solar thermal systems installed by the end of 2004 generated the equivalent of 58,117 GWh (209,220 TJ), which corresponds to an oil equivalent of 9.3 billion litres, and helped to avoid the annual emission of 25.4 million tonnes of CO2. Compared with wind, geothermal and photovoltaic energy, solar heating’s contribution meeting global energy demand is second only to wind power and much bigger than photovoltaics’ contribution.

This fact is often underestimated ( IEA, 2006). The world’s largest market for solar hot water collectors is China, with over 60 percent of the global installed capacity in 2005. China’s national goal is 300 million square meters of solar hot water systems by 2020 (REN21,2006). Although there are no explicit policies for promoting solar hot water in multi-storey urban buildings, building design and construction by developers has begun to incorporate solar hot water as energy costs rise and public demand increases, particularly during the current construction boom. There are also government programs for technology standards, building codes, and testing and certification centers to help the industry mature.

Germany is the leading solar thermal market in Europe and in 2005 installed about 950,000 m2 (665 MWth) in 2005 (Estif 2006). These systems are currently promoted by the German government through a market incentive program that provides a subsidy dependent on collector surface area. However, the German government and industry are collaborating to replace this program with a new law that would provide a payment for every equivalent kWh of heat generated by renewable energies (this system is inspired by the REM currently in place for PV electricity generation) (DSF, 2004). 6 From DSF, 2004 7 From: www.estif.org Solar Thermal markets in Europe June 2006

Greenpeace Canada A National Framework for Solar Hot Water 14 In Europe, the Renewable Energy Council called for a European Union Directive to support ‘renewable heating’ including solar and, in February 2006, the European Parliament directed the EC to develop a directive to promote Green Heat. Half the energy on that continent is consumed for space heating, and politicians want the share of Green Heat to double by 2020.8 Beyond China and Germany, at least 17 countries, and probably several more, provide capital grants, rebates, or investment tax credits for solar hot water/heating investments, including Australia, Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Hungary, Japan, the Netherlands, New Zealand, Portugal, Spain, Sweden, the United Kingdom, many U.S.

states, and the U.S. federal government. Capital grants are typically 20–40 percent of system cost. Investment tax credits may allow deduction of all or part of the investment cost from tax liability. Italy’s renewable energy certificates also apply to solar hot water, so-called “white certificates.” Since 1980, most buildings in Israel have been required to have solar hot water collectors. The technical requirements vary by size and type of building. Certain industrial, medical, and high- rise buildings are exempt.

A number of major cities around the world have enacted ordinances requiring solar hot water in new buildings or providing incentives or subsidies for solar hot water investment. Examples are Barcelona (Spain), Oxford (UK), and Portland, Oregon (USA). Barcelona in particular has enacted one of the most far-reaching of such policies. Starting in 2000, the Barcelona Solar Thermal Ordinance has represented a major milestone in urban energy policy. The ordinance requires all new buildings above a specific size category provide at least 60 percent of their domestic hot water energy demand from solar thermal collectors.

Swimming pool heating must be 100% solar. Buildings undergoing major refurbishment are also subject to the ordinance. The size category means typically that all commercial buildings, and all residential buildings of 16 or more households, are subject to the ordinance. Due to the ordinance, the solar thermal capacity per capita has increased twenty fold from 1.1 m2/1000 inhabitants to 22.4 m2/1000 inhabitants. (ASIT, 2006) Over 60 Councils have followed Barcelona’s lead and by March 2006, over 8 million Spanish citizens were subject to this ordinance (ASIT, 2006). In 2006, the new Technical building code was adopted by the Spanish government requiring that at least 30 to 70% of the domestic hot water demand be covered by solar or other renewable energy forms.

Portugal has also adopted a framework law with a similar content, though the technical parameters must still be specified (ESTIF, 2006).

3. SOLAR HOT WATER IN CANADA 3.1 Current Situation The International Energy Association report (IEA, 2006) ranked Canada as 31st out of 41 countries for cumulative installed capacity of glazed SHW systems at the end of 2004. Figure 4 indicates the cumulative collector area installed in Canada to the end of 2004 from this report. As can be seen from these figures, the bulk of the systems installed in Canada are with unglazed collectors. Approximately 97% of all liquid unglazed collectors are sold into the residential sector for swimming pool heating.9 A survey conducted by NRCan indicated that sales of glazed and evacuated tube collectors (between 2002 and 2004) were split between the residential and I/C/I sectors, with approximately 67% in the residential sector.

The residential sector sales were primarily for domestic water 8 From: CANREA, 2006 9 NRCan, 2005

Greenpeace Canada A National Framework for Solar Hot Water 15 heating, although in 2004, 23% of sales in the residential sector were for combination domestic hot water and space heating applications, indicating strong growth in this application. Sales of these collectors into the I/C/I sector were primarily for hot water applications. 3.2 History of Solar Hot Water in Canada The question of whether Canada has enough solar energy to make a significant impact on our energy needs often arises in the discussion of solar energy projects in Canada. An evaluation10 of the mean daily insulation for Canada’s provinces and territories performed by NRCan provides the information in the table below.

These numbers are comparable to insolation values between 2.4 and 4.4 kWh/m2/day11 for Austria and Germany—two of the leading solar energy producers in Europe. The efforts of Austria and Germany are proven models that political will can produce a successful solar program in areas that have average values of solar radiation.

CanSIA has also produced a graph12 (figure 5) that compares the solar radiation in Miami and Toronto. The figure indicates that except for the winter months, both locations have comparable amounts of radiation in spite of the considerable difference in their latitudes.13 Solar energy programs have had a chaotic history in Canada. Increasing oil prices in the late 1970s and early 1980s resulted in the emergence of a number of federal solar hot water programs. One of these was the “Program for Assistance for Solar Energy Manufacturers” (PASEM), that provided grants to solar companies to become established.

Another such program was the “Purchase and Use of Solar Heating” (PUSH) Program –a program aimed to incent government departments to purchase solar products. However it was soon realized that 10 Pelland, S., Poissant, Y. “An Evaluation of the Potential of Building Integrated Photovoltaics in Canada.” 2006, NRCan, Canmet Energy Technology Centre 11 https://www.rvr.ie/default.aspx?subj=html/solarintro 12 Source: CanSIA presentation: Toronto as a Solar City. May 2006. http://www.cansia.ca/downloads/report2006/P-16.pdf 13 Latitudes: Toronto: 43°40′ Miami: 25°46′ Table 6: Mean Insolation values for Canada Region Mean Daily Insolation for latitude tilt (kW/m2) Alberta 4.73 Saskatchewan 4.99 Quebec 4.33 Ontario 4.22 Manitoba 4.55 P.E.I.

4.06 Newfoundland/ Labrador 3.39 Nova Scotia 3.92 New Brunswick 4.19 British Columbia 3.80 Territories 3.67

Greenpeace Canada A National Framework for Solar Hot Water 16 the government represented only a small part of the potential market. So, the PUSH program was closed in 1983 and the solar program was focused on the private sector. In 1983, the Solar Energy Demonstration Program (SEDP) was approved. Contributions were made available to solar installations that qualified under one of three approved sub-programs: 1) the Solar Domestic Hot Water sub-program 2) the Commercial/Industrial sub-program 3) the Special Projects sub-program. The program was scheduled to run for five years and energy performance targets were established for each year.

A corresponding schedule of decreasing contributions was also established in relation to these targets. Figure 6 shows the historical sales in Canada for solar thermal collectors provided through a recently completed survey14 of solar hot water collector sales.15 The figure clearly shows increasing solar collector sales due to the SEDP program. The SEDP was seen to have had a significant impact on improving the market penetration rate of solar energy systems in the Canadian market. (SEDP, 1987). However, the time frame for the SEDP program was too short to allow more development of the solar sector.

A longer- term program with gradual subsidy decline was needed for more sustainable results.16 With the fall of oil prices, the various government deployment programs for solar thermal systems 14 Final Report Survey of Active Solar Thermal Collectors, Industry and Markets in Canada, 2005 http://www2.nrcan.gc.ca/ es/erb/erb/english/View.asp?pf=1&x=455&oid=1183 15 The compilation of data included information from previous surveys and reports and estimation of sales for periods (1987 to 1994) where there were no records available.

16 Conversation with Doug McClenahan, CanMet, August 15,2006

Greenpeace Canada A National Framework for Solar Hot Water 17 ended in the period of 1986-1987 (the last program was for solar DHW systems which ended in March 1987). Between 1986 and 1988 the solar industry experienced a collapse of sales. It is interesting to note that the SEDP evaluation report points out “Further costs and technology improvements alone, are not likely to be sufficient, without continued program subsidies, to reduce the payback period of future solar installations to the point where solar could attract a sizable market share (SEDP, 1987).

Commencing in 1998, the Renewable Energy Deployment Initiative (REDI), a program of Natural Resources Canada (primarily for commercial systems), has provided funding to dozens of solar thermal projects in Canada, including many of the larger installations of various collector types. A number of interruptions in this program have reduced its effectiveness. Recently, the level of interest in the program has risen dramatically.

To address the largest solar hot water market in Canada, REDI has allowed a number of pilot domestic solar hot water projects to develop over the years. These projects have given increased exposure to solar domestic hot water with the installation of a limited number of systems. The pilot projects have taken place in Ontario in Toronto, Peterborough, Kingston, and Perth, and in Courtenay, B.C., Bathurst NB., and on a province-wide basis in B.C.

Greenpeace Canada A National Framework for Solar Hot Water 18 3.3 Barriers to Solar Hot Water development A.

Awareness & Promotion 1. Existing Homes One of the major barriers to the development of solar hot water systems in Canada is the lack of public awareness about the technology. Most Canadians are not aware of the difference between photovoltaics and solar hot water systems. The Ipsos-Reid Poll (2002) done on behalf of NRCan indicates that approximately 1% of Canadians are aware of solar hot water. Besides homeowners, there is a need to inform the tourism, sports and recreation sectors, health care, banking and commercial sectors of the solar hot water products available, their features and numerous benefits.

Market research has not been done to determine the messaging that resonates with Canadians regarding solar. There is also low media interest in this technology, which accentuates the problem.

2. New Build Sector In the new build sector, there is very little awareness of solar hot water amongst engineers and architects. This results in a lack of integration of solar systems into the architecture of the buildings. This lack of awareness also applies to builders, developers and building associations who need to be educated about this technology. B. Market Infrastructure 3. Lack of Qualified Installers Due to the small scale of this industry in Canada, there is a lack of qualified installers of solar hot water systems. A number of installers who were active in the field in the 1980s have gone on to other businesses during the decline of solar in the 1990s.

The Canadian Solar Industries Association presently offers a certification program for experienced installers. However, a program is presently not available for inexperienced installers. There is also a need to involve roofers and the heating industry in the installer-training program.

4. Motivation of Installers Besides being qualified, installers need to be motivated to promote solar in their communities. Installers need to offer solar in an active manner rather than as an alternative energy source. Active marketing of SHW needs to be part of installer training. 5. Quality of Solar Systems A major challenge for the industry is to ensure that the credibility of the systems is maintained. Systems with inferior quality levels may be sold and often it is not easy for the customer to find good information on the quality of the products on the market. A certification program for packaged solar domestic hot water systems was introduced in 2004 based on CSA standards.

At present, Canada does not have any CSA certified systems although a number of systems are awaiting certification. The CSA process is slow and can be cost prohibitive to smaller manufacturers. Furthermore, there is presently no harmonization with European or American certification for solar systems. C. Incentives and Regulations 6. Up front Costs of Purchase of System Unlike other energy sources such as natural gas and electricity, harnessing the energy from solar presents an up front cost that is usually prohibitive to the user. A number of states in the U.S. (in conjunction with financial institutions) offer low-interest loans to alleviate this concern.

This is presently not available to Canadians.

Greenpeace Canada A National Framework for Solar Hot Water 19 7. Availability of Incentives Initiatives in Europe have succeeded due to a consistent set of incentives provided to homeowners and businesses. Such incentives are not available today to Canadian homeowners. It should be noted that many of the incentives identified for solar systems would not be needed if the environmental and public health costs of conventional energy sources were included in their price or if the current subsidies to the fossil fuel and nuclear sectors were phased out.17 Commercial systems can obtain a rebate (until the end of 2006) from the REDI program.

However, the stop and go nature of the REDI incentives has been a barrier to commercial solar development.

8. Incentive for Builders of New Homes The real estate market does not recognize any added value to a home that has an installed solar system. Therefore, builders do not see the value of installing solar systems on new homes as they perceive the savings to benefit only the buyer. The absence of regulations that specify energy usage limits for building components such as water heating or space heating systems also prevent builders from installing solar hot water systems in new homes. 9. Incentive for Owners of Commercial Systems The owners of commercial buildings are usually not the energy consumers and so there is little incentive for these parties to install energy saving equipment on their buildings as the energy bills are passed on to the tenants.

D. Political Will 10. Lack of Political Will and Interest Japan and Germany are two countries with relatively modest solar resources but have nevertheless quickly become world leaders in solar photovoltaic (PV) technology. The experience of these leaders clearly illustrate that strong solar markets can be quickly established if supportive policy measures are implemented that focus on reducing the risk for investors in the technology and business through the use of long-term adequate price guarantees, strong government R&D, and active market penetration. In Canada, at present, there is little interest in solar energy at the national level.

11. Unstable Policies Unstable policies and incentives can seriously damage the production and sales cycle and undermine consumer confidence. In countries with successful solar programs, long-term policies provide a signal to the market and encourage the solid growth of the solar industry. Stop and go incentives and solar programs in Canada have been major barriers for the solar industry.

12. Importance of Bringing Municipalities on Board Municipalities can play a key role in the implementation of solar programs as they are large end users of energy. There is a need to develop ways to engage municipalities and to stimulate the interest of municipal staff and politicians. 17 Canadian government funding has averaged $1.4 billion per year to the fossil fuel industry, and $332 million per year to the nuclear industry over the last few decades (CanSIA, 2004)

Greenpeace Canada A National Framework for Solar Hot Water 20 4. VISION FOR SOLAR HOT WATER IN CANADA 4.1 Markets for Solar Hot Water Systems Table 7 below indicates the energy usage18 in residential and commercial buildings for water heating and space heating in 2004.

The commercial buildings considered were the prime candidates for solar water heating including educational services buildings, health care buildings and accommodation and food services buildings. Space heating for these commercial buildings is not considered to be viable at this time as it would be a difficult task to retrofit these buildings to accommodate space heating from solar systems.

This table clearly shows that the major market for solar hot water systems is the residential sector in Canada. Although the commercial/ institutional market is smaller by comparison, it is still substantial enough to be included in an Action Plan. 4.2 Technical Potential of Solar Hot Water in Canada in 2004 Using the energy consumption from 2004 (Table 7) and assuming that all households would install solar hot water for water and for space heating. (In Austria in 2006, 50% of installed collector array is for combi systems that include water and space heating). If 100% of the roofs could accommodate solar: Total Water and Space Heating energy that could be provided by solar hot water = 1201PJ X 0.5 solar fraction = 117PJ = 32.5 million MWh per year If 40% of the roofs could accommodate solar: 46.8 PJ =13 million MWh per year The technical potential can also be arrived at by looking at the solar installed capacity in other countries.

Figure 7 provides a comparison of the cumulative installed capacity of solar hot water collectors on a per capita basis for countries that have similar climates to Canada. This figure indicates that Canadian capacity needs to multiply hundredfold to meet the levels of solar hot water in Austria in 2004.

18 Source: http://oee.nrcan.gc.ca/corporate/statistics/neud/dpa/trends_res_ca.cf, http://oee.nrcan.gc.ca/corporate/statistics/ neud/dpa/tablestrends2/com_ca_32_e_1.cfm?attr=0

Greenpeace Canada A National Framework for Solar Hot Water 21 4.3 Targets for Solar Hot Water in Canada A conservative estimate given from NRCan in the Renewable Energy in Canada Status Report 2002 indicates “There are approximately 12,000 solar water heaters currently in Canada, representing less than one percent of the solar hot water market.”21 Figure 822 (next page) compares solar collector sales between Austria and Canada.

It is interesting to note that sales in Canada were higher than those in Austria during the 1980s while the Canadian solar program was in place. Austria’s program continued, resulting in today’s leadership position while the termination of Canada’s solar program resulted in the collapse of the solar market. The importance of federal commitment to solar is clearly indicated by this picture. The example of Austria’s solar market demonstrates the ability to achieve targets with the establishment of consistent and strong federal involvement.

Table 8: Solar Hot Water targets for Canada based on other country installations Possible Targets Cumulative installed area Cumulative solar energy Cumulative Installations by sector 10X Canadian installations in 2004 (similar to Sweden 2004) 775,880 m2 543 MWth 86,600 residential systems plus 256,000 m2 comm.20 20X Canadian installations in 2004 (similar to Slovenia & Switzerland 2004) 1,551,760 m2 1,086 MWth 173,200 residential systems plus 512,000 m2 comm. 40X Canadian installations in 2004 (similar to Germany 2004) 3,103,520 m2 2,172 MWth 346,400 residential systems plus 1,024,000 m2 comm.

100X Canadian installations in 2004 (similar to Austria 2004) 7,758,800 m2 54,300 MWth 866,000 residential systems plus 2,560,000 m2 comm. Table 7: Energy Use and GHG Emissions for residential and commercial buildings End-use Residential Energy Use (PJ) 200419 Residential GHG Emissions (Mt) Comm/Instit Energy Use (PJ) Water heating 348 19 42 Space heating 811 41 N/A Total 1159 60 19 Source: http://oee.nrcan.gc.ca/corporate/statistics/neud/dpa/trends_res_ca.cf, http://oee.nrcan.gc.ca/corporate/statistics/ neud/dpa/tablestrends2/com_ca_32_e_1.cfm?attr=0 ; This energy use is for 12,375,000 households, 1545 million m2.

20 An assumption of 67% residential and 33% commercial is made for these calculations as per the latest ratios in the NRCan solar collector sales survey.

21 From Natural Resources Canada Website:http://www2.nrcan.gc.ca/es/oerd/english/view.asp?x=700&mid=38 22 CanSIA, Solar in Canada 2006: The Turning Point. August 2006.

Greenpeace Canada A National Framework for Solar Hot Water 22 Targets Based on the graph above, the collector sales achieved by Austria is a good target if similar policies are put into place for market development. From Table 8, a target to match Austria would be 866,000 residential systems plus 2,560,000 m2 of commercial collectors. The above figure indicates that this growth in Austria has primarily occurred between 1989 and 2004, over a period of 15 years.

Although energy costs in Canada are much lower than in Austria, it can be assumed that such a target could be accomplished in a similar time line as the systems have matured and the Canadian industry and government can learn from European programs. With these assumptions the following target is proposed for Canada: Residential 1 million solar hot water systems in Canada by 2025 Energy Saved: 3,000,000 MWh per year GHG Reduction: 1 to 2 million tonnes per year Sales: $5 billion Commercial 2.5 million m2 of commercial collector area Energy Saved: 1,500,000 MWh per year GHG Reduction: 0.5 million tonnes per year Sales: $1.5 billion

Greenpeace Canada A National Framework for Solar Hot Water 23 4.4 Vision Industry and research institutes from all around Europe have recently developed the Solar Thermal Vision 2030, a document which outlines the sector’s vision for the future use of solar thermal energy. For the building sector, which is responsible for 40% of Europe’s energy supply, it presents the concept of the Active Solar Building, which will be entirely heated and cooled by solar thermal energy and which is expected to be the building standard in 2030. The overall vision of the solar thermal branch is to supply up to 50% of the low-temperature energy demand of Europe by solar thermal by 2030.23 In a similar manner, it is imperative for Canada to have a strong vision for the role of solar hot water systems in its energy future.

The following is a starting point for such a vision. We envision a future where solar hot water systems: • Become a significant energy provider for Canadian homes and businesses by becoming a mainstream energy technology; • Create jobs in communities across Canada while becoming a source of export potential; • Become a significant part of the solution to reduce greenhouse gas emissions in Canada; • Empower citizens to make their own individual contribution to climate change; • Help reduce demand on electricity grids. European Solar Thermal Vision 2030 Solar thermal systems will look very different in the future.

Solar thermal collectors will cover, together with photovoltaic modules, the entire south-oriented roof area of buildings. Roof windows will be integrated. The storage tank will be able to store the solar heat over weeks and months, but will not be too large. The solar thermal energy system will provide domestic hot water, room heating in winter and room cooling in summertime, thus greatly increasing the overall comfort of the building.24 23 From the press release launching the European Solar Thermal Technology Platform. See: http://www.esttp.org/cms/upload/ pdf/ESTTP_launch_press_release.pdf 24 Solar Thermal Vision 2030 See: http://www.esttp.org/cms/upload/pdf/Solar_Thermal_Vision_2030_060530.pdf

Greenpeace Canada A National Framework for Solar Hot Water 24 5. HOW TO REACH THE VISION 5.1 Key Issues for sustainable SHW market development European experience25 suggests that there are three critical components that form the basis for sustainable SHW market development and growth. They are: 1. Public Awareness 2. Strong Market Infrastructure 3. Incentives and Regulations The implementation of any of these components by itself leads to a strong potential of failure of the program. Therefore, it is important that all three components be addressed congruently and at national, regional and local levels.

Overall stable, constant framework conditions prove effective for market development. Germany In the period from 1995 to 2001 the German solar thermal market showed good development. The demand for solar thermal systems rose by an average of 30% per year. There were three main reasons for this market success. First the public awareness of solar energy and therefore the interest in the use of solar thermal increased. Second the government strengthened subsidies for solar thermal systems. Third the solar branch of government – with established solar companies and several new companies – worked very hard to build up the market and to activate plumbers to sell and install solar systems (SIA2).

25 Conversations with Teun Bokhoven, Zen International, March 2006

Greenpeace Canada A National Framework for Solar Hot Water 25 5.1.1 Public Awareness and Promotion Raising awareness is the key to overcoming the barrier to growth that is representative of the lack of knowledge regarding this technology at all levels of society. Basic understanding of solar hot water systems, their use and benefits is needed. Most people do not appreciate the difference between obtaining solar power through photovoltaics and solar heat from solar thermal systems. This means that they will have to be informed with basic information and guided through the whole process of understanding the technology before they can be expected to invest in it.

Information regarding solar hot water systems need to be provided to consumers, installers, architects, engineers, builders, developers, real estate agents and policy makers.

Targets Targets are important to set as they can be a major driver in the development of the solar hot water program. The European White Paper target is 100 million m2 installed by 201026 and many European countries have set national targets for their solar hot water programs. A target such as a 1 million solar roofs program is an effective promotional tool to raise interest in the populace and to attract partnerships from utilities, provincial and municipal governments. The national target can be broken down into provincial and territorial targets. Netherlands In 1996, the Dutch gov- ernment presented its plans for the introduction of renewable energy.

For solar thermal, the target was set at 400,000 solar systems in 2010 and 1 million systems in 2020.

Public Campaigns Information and promotional campaigns are essential to stimulate market growth. Therefore, a mass public campaign is one key element of the solar hot water strategy. It should define the benefits of solar in providing long-term security of energy supply, the minimal environmental impact, and promote the “feel good” factor of solar. It is important that the image of solar thermal be linked to quality and reliability. Commercial marketing and public awareness campaigns should go hand in hand for optimum effectiveness. In Austria, a public awareness campaign was launched in 2000 to raise the image of solar technology and to make aware of its advantages.

An important factor for success in Austria was the motivation of the general public.

The main goals of promotion campaigns can be: • to create awareness of the potential for solar in the region and the use of solar thermal; • to provide knowledge about financial and technical issues; • to motivate potential users to assess the potential for solar thermal in their building; • to assist potential users by providing independent information to facilitate their decision to install a system; and • to assist potential users to find reputable installers and quality systems.

26 from SolTherm report

Greenpeace Canada A National Framework for Solar Hot Water 26 National level campaigns need to be carefully designed to reach the targeted groups of potential users whether they be a specific market segment or a geographical area.

Market research that determines effective messaging for SHW will be useful. In areas where solar thermal is not yet widely used, demonstration projects can be a very useful tool to support awareness and promotion campaigns. Germany In order to increase the public awareness, the solar thermal campaign‚ ‘Solar– na klar!‘ (‘Solar – that’s clear!’) was launched in 1999. With a budget of 10 million DM (5,1 million Euro) over the 3 years, this campaign played a key role in the successful rise of the solar heating market in Germany.

Solar Hot Spots It has been observed in several countries including Austria and the Netherlands,27 that low-level promotion to large groups, especially when no adequate follow-up is arranged, can have disappointing effects in terms of direct sales increase, even if they may have had a longer-term effect on the general awareness. As the consumer becomes more aware of the technology and becomes enthusiastic about its implementation, a system that has follow- up with direct contact with installers and distributors needs to be in place. Thus it may be better to focus on a smaller region / municipality and to have intensive communication with an established infrastructure of installers and dealers there, or to choose well-defined market segments, than to have a low level of communication in a whole country or province.

The establishment of “solar hot spots” across the country is one method of focusing promotion. A potential idea is to establish a Solar Cities program. One such program that has been recently established is the Solar Cities program in Australia.28 Solar Cities is a $75.3 million initiative designed to demonstrate how solar power, smart meters, energy efficiency and new approaches to electricity can combine to provide a sustainable energy future in urban locations in Australia. Four Solar City projects will be supported in this program. Another example is the U.S. Solar Cities Strategic Partnership funding initiative in 2006.

This is a funding opportunity that is seeking to form strategic partnerships with U.S. cities and with the U.S. Department of Energy. These partnerships are intended to help accelerate the adoption of solar technology at the local level by engaging city governments, as important end users of energy, key intermediaries to other end users within their jurisdiction, and regulatory entities. This initiative requires that the city express a commitment to a city-wide approach to integration of solar energy into city planning and processes, as well as to large-scale implementation of solar technologies between now and 2015.29 Specific sectors of the commercial market can also be targeted such as the tourism industry, laundromats, restaurants or car washes.

It is easiest to start with one or two sectors. Multi- family homes are more complicated as experienced designers and installers are needed. Partnerships Partnerships with community energy and environmental organizations that are active in education and community organizing can be an effective method to deliver information and engage a target population. This has been exemplified through the success of the delivery of the Energuide program through the Green Communities Association and conservation programs through local non-government 27 from Soltherm report 28 http://www.greenhouse.gov.au/solarcities 29 http://www.grants.gov/search/search.do?oppId=11174&mode=VIEW

Greenpeace Canada A National Framework for Solar Hot Water 27 organizations (NGOs). Funding for local organizers for project/education funding is a key success factor. Awareness building in all sectors Awareness building of professionals including architects, engineers, and of builders, developers, real estate agents and the banking community of the potential of solar hot water and its application is another important aspect of the promotional program. Demonstration Projects Demonstration projects play a key role in raising awareness especially in areas where solar hot water technology is unknown.

They provide a high-profile visible installation and an opportunity for people to actually see and understand the workings of a solar system. Demonstration projects placed on government buildings symbolize the government’s commitment to solar energy. Another option is to develop a “Solar for Schools” program that not only demonstrates solar to students, parents and the community but also provides an opportunity to include solar energy in the school’s curriculum. Students are able to learn and understand about conservation and renewable energy while exploring the possibility of a future career in this field.

5.1.2 Strong Market Infrastructure The importance of linking the image of solar hot water systems to quality and reliability cannot be stressed. The European experience has shown that inferior products and installation practices have had a long lasting, negative effect on a number of markets in Europe, notably in France, Spain Belgium and Italy in the 1980s.30 Solar heating installations are products with high initial costs that are usually compensated over their lifetime. Consumers therefore need to believe in those claims of a long lifetime with little maintenance and must be able to identify quality products and services.

A few examples of installations of inferior quality can cause a long-lasting negative attitude with consumers towards solar heating installations. This can be especially detrimental to the development of large-scale companies and projects. Qualified Installers A crucial link for market development is to give interested customers good information, make them acquainted with the advantage of solar water heaters and to guide them to trained and motivated sales and installation organizations. Experience from solar water heater campaigns in the Netherlands show that if the follow up is not well organized, an information campaign may have little effect on sales.

Strong links between the information campaign and the sales and installation organizations is needed. The role of installers becomes increasingly important as solar hot water systems become part of the distribution chain of water heating and space heating equipment. In Germany, the largest solar heating market in Europe, installers have a relatively high level of experience and expertise regarding solar water heaters. In most other countries, it is found that a small number 30 From Soltherm report

Greenpeace Canada A National Framework for Solar Hot Water 28 of installers succeed in acquiring a large portion of the market by pro-actively selling solar water heaters. The motivation and knowledge of installers therefore plays a large role in market development. To ensure that trained installers are available, there is a need to create training programs for installers that are easily accessible to interested people. Such programs must provide technical as well as sales knowledge in order to increase the number of successful pro-active installers. Training can be conducted through colleges, trade associations, vocational schools and NGO programs.

One of the key challenges is ensuring the availability of an adequate pool of skilled installers that are motivated and qualified to recommend solar. Stop and go financial incentives do not lead to motivated installers. The certification of installers is also a solution to obtain a consistent knowledge level in the industry. One of the goals of the program can be to develop a target goal of certified installers in Canada. Financial subsidies could be tied to installer certification to ensure that installers have an incentive to become certified. In Canada, CanSIA has a certification program for experienced solar hot water installers, which needs to be made accessible throughout the country.

This would require a larger number of qualified trainers that can teach the CanSIA programs in various communities across Canada. A solar hot water installer training program for new installers that provides certification can be developed through colleges. Northern Lights college in British Columbia is developing such a program (in conjunction with their plumbing program) and anticipates its launch in late 2006. This template can then be used by other colleges across the country.

High Quality Solar Systems High quality solar systems lead to the credibility of the technology and develop customer confidence in solar hot water systems. National standards for systems allow consistent criteria for solar systems throughout the country. These standards need to harmonize with U.S. and European standards to enable Canadian companies to participate in a world-wide market. Subsidies can be tied to a specified standard of solar systems to ensure that low-quality systems do not become prevalent by taking advantage of the subsidies.

Plumbing Codes A key action towards mainstreaming solar hot water is the recognition of such systems in the national and provincial plumbing codes.

This also includes the development of solar hot water awareness and training programs for plumbing and building inspectors. Utilities In countries with an established solar thermal market, utilities have played an important role in the development of the market, not only via their subsidy schemes, but also through their publicity campaigns and in a number of cases their commitment to contribute in CO2 emission reduction. Utilities can be obliged to include solar programs through mandated conservation and demand management programs at the provincial or municipal level. Incentives for solar hot water may be provided by the utility with some assistance from the federal government.

There also may be an opportunity for a partnership between utilities, the Federation of Canadian municipalities (FCM) and the Association of Municipalities to allow access to the FCM Green Fund for solar hot water projects.

Greenpeace Canada A National Framework for Solar Hot Water 29 Netherlands The energy utility companies haveplayedaveryconstructiveroleinthisprocess over the past years. Within their environmental obligations to the government (with a specific target for CO2 reductions) they have played an important role in stimulating renewable energies and solar thermal in particular. Utility companies provided additional subsidies, participated in awareness campaigns and were in some cases involved in rental schemes (SIA2). Monitoring Reliable official statistics are necessary to provide quantitative information on the number of systems installed across Canada and the performance of these systems.

Systematic monitoring of new solar hot water systems along with a systematized accounting of installations would provide useful information. Research and Development There has been substantial progress in the last three decades in the development of highly efficient solar collectors and their applications in domestic water heating. However, there is a large potential for solar hot water systems that is still undeveloped and needs substantial research and development. These include: • long-term storage facilities that allow the accumulation of heat during periods of high radiation and usage of this heat during periods of low radiation; • solar-assisted cooling for the summer; • integration with existing heating technologies and combination with other renewable technologies; and • integration of collectors in roof systems.

Inclusion of solar thermal in R&D programs is necessary to exploit the maximum potential of this technology and can be accomplished with comparatively small investments. 5.1.3 Incentives and Regulations Incentives The analysis of the barriers to a strong solar hot water market in Canada shows that some of the major obstacles are of a financial nature. High up front costs of $4000 to $5000 for domestic systems and relatively long payback times between 5 to 15 years are some of the reasons people do not invest in this technology. European experience shows that the growth of the solar hot water market requires stable and well-designed incentives and fiscal measures.

A best practices manual for financial incentives is expected to be produced by the European Solar Thermal Industry Federation (ESTIF) in 2006. Some criteria that can be followed for an effective incentive program include: 1. Continuous Long-Term Time line Financial incentives need to be based on a long-term basis. Short-term incentives can turn into barriers to growth as potential users often expect a reactivation of the incentive program and postpone the purchase of a system. This leads to short-timed overheating followed by breakdown of the market when incentives are stopped. This has been clearly demonstrated by the SEDP program that was in place in Canada in the early 1980s.

As the long-term growth of the market relies on the development of a widespread network of specialized distributors, system designers and installers, the impact of stop-and-go subsidies disrupts the market. It is better not to have incentives rather than stop- and-go financial subsidies. Significant harm can be done to the perception of a technology that has disruptive development, creating further delays to market development. Stability of incentives is the key for investors to step into the market.

Greenpeace Canada A National Framework for Solar Hot Water 30 Sweden The market in Sweden has been influenced negatively by shortsighted investment incentives, either in the form of market subsidies or support for demonstration projects. Since 1978 there have been about 10 different types of national incentive schemes (SIA2). U.S. The Fortune 500 companies that led the thermal industry in its peak such as: Grumman, Daystar (Exxon) Revere Copper and Brass, Reynolds Aluminum, Phelps Dodge, Carrier, Rheem, State Industries, American Solar King, Novan, Honeywell, Johnson Controls, have retreated from the solar thermal market following the abrupt collapse of incentives in 1985 (SIA2).

2. Size of Subsidies The size of the subsidy needs to be carefully considered. A large subsidy has the propensity to encourage low-quality installations, whereas a too-smallsubsidydoesnotmotivateinstallations. A good rule of thumb is about 20%31 of the system and installation cost, as this quantity should be enough to motivate investment by installers and homeowners. A subsidy scheme could be based on m2 of collector installed, but it is difficult to determine if the system is working properly. A better option would be to calculate subsidies based on the performance of the system. 3. Proper Management The program needs to be well managed without complexadministrationandtoomuchpaperwork.

The transaction costs of the administration need to be minimized and a single office should supply the potential investor with all the funding information for federal, provincial and regional funding for solar hot water. Utilities can be effective in managing a shw program as they are already organized for this function. 4. Fiscal Measures Fiscal measures have the advantage of adding stability to an incentive program and can include PST and/or GST exemption, income tax credit and on a regional basis deduction of the investment from building property tax. One idea that can be implemented immediately is the expansion of the use of CCA class 43.1 to make solar hot water technologies eligible for accelerated capital cost allowance.

A federal tax credit similar to the one in the U.S. will also be an important stimulator for the solar industry. The U.S. tax credit is available for qualified solar water heating and photovoltaic systems “placed in service” in 2006 and 2007. The tax credit is for 30 percent of the cost of the system, up to $2,000.

Table 9: Subsidies in Other Countries Country Subsidy (SIA2) (1 Euro = 1.4 Canadian dollar) Austria 1225 Euros support –average with strong variations depending on state and local support programs. Larger systems including space heating are accorded lower rates of subsidy per m2. Tax deductible up to 2920 euros per annum Denmark 1994: 0.67 Euro per kWh net performance 1996: 0.53 Euro per kWh Present: no subsidies Germany Typical subsidy of 625 Euro for a one- family home installation (total installed cost = 4500 Euro) General subsidy: 700 Euro (EPR, for systems > 3 GJ performance) system cost=1880 to 2550 Euro also some subsidies available from utilities and local authorities U.S.

California will begin a pilot program to support solar hot water. The United States also enacted a federal 30 percent tax credit for solar hot water through 2007. 31 Conversation with Raffaele Piria, ESTIF Policy Director, June 2006

Greenpeace Canada A National Framework for Solar Hot Water 31 5. Financial Schemes Financing schemes that provide an option to the up front cost of the system are especially useful for homeowners. Many U.S. states have low or no-interest loan programs for homeowners that purchase solar systems. Inclusion of the solar system in the mortgage for new-builds removes the burden of the initial cost to the homeowner.

In communities, municipalities can purchase systems and recoup their costs through a long- term charge of usually 15 years (local investment charge) to the homeowner through their property tax bill. There is also an excellent opportunity for utilities to act as a solar utility and charge a solar energy fee as a part of the customer’s energy bill.

Germany In addition to the market stimulation program, builders of new houses and buyers of residences got the ‘ökozulage‘ (eco bonus), which was 2% of their investment on solar systems in their dwelling over 8 years, in sum 16%, but a maximum of 4.000 DM (2.045 Euro) in total. This program ended in February 2002 synchronously with the start of the new ‘Energie-einsparverordnung’ (energy saving regulation )(SIA2). Regulations Regulations based on law are conducive to stable market development. Solar positive regulations include exemption from building permits, energy performance criteria in building regulations, and an obligation for solar installation for new construction or at time of change of ownership of building.

Provincial mandates that set a renewable energy production target for utilities is also very effective to stabilize the solar market. In the Netherlands, new energy consumption- related criteria in the building regulation started to have an effect on the solar market beginning in 1996. Since 1996, the energy performance standard in the building code has been updated every 2 years, leading to a situation in which SDHW systems became a close to competitive option in the new-build sector. As a result, since 2001, close to 15% of all new dwellings are supplied with a SDHW system, making solar thermal a standard product in the building sector (SIA2).

Spain has mandated that all new and renovated buildings be equipped with solar panels to provide between 30 and 70 percent of their hot water, depending on where the building is located and on its expected water usage. This regulation is part of the new Technical Building Code, which will come fully into force in March 2007. Northern Ireland NorthernIrelandhas announced changes to building regulations that will make the use of solar panels obligatory in all new homes, office blocks and public sector buildings from 2008.

5.1.4 Political Will All of the above initiatives will only occur if there is political will for solar in Canada.

A long-term national policy for solar is therefore imperative to drive the market forward. As has been mentioned earlier, short-term incentives and policies confuse the market and cause disruptions in its growth. Spain The main reason for the recent success of solar thermal has been the clear support from the Spanish government. Two main events changed this situation: the government endorsed more money for solar thermal (6 million Euro) and detailed regulations covering both technical and economic quality became mandatory for installers. This stimulated the market, as consumers received much better quality.

The adoption of the Technical Building Code mandating SHW for all new buildings also signified the strong determination of the Spanish government to support the solar thermal market.

Greenpeace Canada A National Framework for Solar Hot Water 32 The above stated policies for the development of solar hot water in Canada need to be enabled in an environment that realizes the value of developing renewable energy as a future energy source for Canada. In this context, some of the broad-based policies that need to be in place include: • Development of an overall renewable energy policy that includes green heat technologies such as solar hot water; • Establishment of a solar office at the federal level that would coordinate the solar hot water strategy; • Establishment of ambitious targets; • Development of a strategy to achieve the targets established for solar hot water; • Establishment of budgets32 to enact the strategy and action plan; • Requirement of utilities to source an increasing percentage of energy content from solar hot water systems and other eligible Green Heat technologies with a target of 20% by 2020;33 • Production of life cycle costing of the various energy systems to include external costs including environmental damage, health risks, and import dependency to encourage consumers to understand the full costs of each energy system; and • Enhancement of solar hot water on the political agenda by providing clear recommendations to provincial and municipal governments and energy departments.

5.2 Actions at the National Level A number of key initiatives that need to be in place for a strong solar program in Canada have been discussed in section 5.1. In the course of implementing the actions towards a comprehensive solar program, it is important to involve actors at provincial, regional, local and the utility level. For the purposes of this report, only the national actions have been selected and summarized in the table below. Prior to implementation, the main target groups for these actions also need to be identified. From the energy consumption data, it is seen that the major target group is homeowners.

This can be divided into existing homeowners and owners of new builds. It is preferable to start with single-family homes as it is the largest market for solar hot water. Multi-family homes are complicated as experienced designers and installers are needed. Specific sectors of the commercial market can also be targeted including the tourism industry, laundromats, restaurants, hospitals and car washes. In the implementation of these actions, broad multi-stakeholder support is needed from the early stages. This can be initiated by discussions with stakeholders on the recommendations given below and assembling a shorter priority list.

32 From: CanSIA, 2004: Canada should increase the level of funding of solar so that it reaches the international average of public funding of IEA reporting nations within 4 years with a target to be in the top 5 reporting nations within 8 years. This would require a government investment of $30 million dollars annually ($18 million for PV and $12 million for solar thermal) per year, moving to an estimated budget of $75 million annually (PV: $45 million, ST: $30 million) by 2012. 33 From: CanREA National Strategy Source: http://www.canrea.ca/pdf/CANREA_Full_Nat_RE_Strat_July%2006.pdf

Greenpeace Canada A National Framework for Solar Hot Water 33 34 This is similar to the U.S. Department of Energy program which provided funding to establish demonstration solar schools in various states. Table 10: Required National Actions Barrier Priority National Action Required Recommended Players A. Awareness & Promotion 1 1. Implement a 1 million solar roofs program in Canada. NRCan; Industry Canada; Environment Canada; ICLEI; FCM; HRSDC; Solar Industry 1 2. Start a Solar Cities Program City of Toronto; City of Vancouver; City of Kelowna; City of Dawson Creek; NRCan 2 3. Implement a national awareness campaign to inform people of the advantages of using solar energy in Canada.

ENGOs; NRCan; Utilities 2 4. Sponsor training of architects, engineers, utilities, developers and real estate agents. Professional Assoc; Homebuilder Assoc; Real Estate Assoc; Major utilities 3 5. Implement demonstration projects to raise the profile of the technology. Federal government office management 3 6. Provide funding for a “Solar in Schools” program Solar Industry34 NRCan; Municipalities; Provinces B. Market Infrastructure 1 1. Establish national standards for systems that are harmonized with U.S. / European standards. CSA; NRCan; SHW Industry; CanSIA 2. Inclusion of SHW criteria in the National and Provincial plumbing codes.

Cdn. Comm. on Building and Fire Codes; Provincial regulators 1 2. Establish national standards for installers. ACCC; CanSIA 1 3. Subsidize training programs for plumbers and heating contractors. NRCan 1 4. Develop programs with utilities. NRCan; Major utilities 2 5. Initiate a Canada-wide solar system monitoring program to create a reliable data resource. NRCan; Solar Industry 2 6. Develop a strong solar research and development program. Canmet; Universities; SESCI C. Incentives & Regulations 1 1.Provide long-term subsidies for homeowner installations and for commercial projects. NRCan; Provinces; Municipalities 1 2.

Establish a federal tax credit for the purchase of solar systems.

Department of Finance Canada 1 3. Establish a Standard Offer Contract for SHW. NRCan; Private and Public Utilities 1 4. Develop a FCM funding program for SHW. FCM; Cities 2 5. Establish a revolving fund to implement a low- interest loan program for solar. NRCan; Banks and Credit Unions 2 6. Work with the provinces to establish energy targets/performance criteria for buildings. NRCan; Provinces D. Political Will 1 1. Commit to a long-term solar hot water strategy/ plan for Canada. NRCan 1 2. Establish long-term solar policies. NRCan 1 3. Establish a solidly funded long-term solar program in NRCan.

NRCan

Greenpeace Canada A National Framework for Solar Hot Water 34 6. NEXT STEPS i) Distribute this report to interested parties via e-mail. ii) Assemble a meeting of key stakeholders including governments, NGOs, solar industry and utilities to discuss the actions recommended in this report. iii) Select 1 or 2 actions to implement immediately. iv) Develop an Action Plan for these actions. v) Assign roles and responsibilities for each stakeholder.

Greenpeace Canada A National Framework for Solar Hot Water 35 REFERENCES ASIT, 2006: Asociacion Solar de la Industria Termica (ASIT).

“Spain: Solar Ordinances—A framework for market growth”. 2006. http://www.asit-solar.com/presentaciones/ASIT,%20WSED%202006,%201-3-06.pdf CanRea, 2006: Canadian Renewable Energy Alliance, “Framework for a model National Renewable Energy Strategy for Canada”. June 2006. CanSIA, 2004: Canadian Solar Industry Association, “Sunny Days Ahead—Working towards a Solar Future for Canada”; Key Federal Recommendations. November 2004.

CanSIA, 2006: “Toronto as a Solar City... Sunny Days Ahead for Solar Energy”, Dan Leckie Forum 2006, Presentation by R. McMonagle, May 29, 2006. DSF, 2004: The David Suzuki Foundation. “Smart Generation: Powering Ontario With Renewable Energy” 2004. ESTIF, 2006: “Solar Thermal Markets in Europe, Trends and Market Statistics 2005, June 2006”. http://www.estif.org/fileadmin/downloads/Solar_Thermal_markets_in_Europe_20 05.pdf IEA, 2004: Weiss, W., Bergman, I. and Faninger, G. (2004) “Solar Heating Worldwide: Markets and Contribution to Energy Supply”. Gleisdorf, Austria: International Energy Agency, Solar Heating & Cooling Programme.

IEA, 2006: Weiss, Bergmann, Faninger. “Solar Heat Worldwide, Markets and Contribution to the Energy Supply 2004. IEA Solar Heating & Cooling Programme”. March 2006. Industry Canada 2003: “Situation Analysis of the knowledge, competencies, and skill requirements of jobs in renewable energy technologies in Canada.” http://strategis.ic.gc.ca/epic/internet/inrei-ier.nsf/en/nz00059e.html#head 35 SEDP: Energy Mines & Resources Canada. “Evaluation Study, Solar Energy Demonstration Program, Final Report”. June 1987. Report No: PE 114A/1987 NRCan, 2003: Natural Resources Canada, “Residential Sector: Heating, Cooling and Comfort - Water Heaters” Office of Energy Efficiency.

Available online (August 2004) at: http://oee.nrcan.gc.ca/equipment/ english/page51.cfm?PrintView=N&Text=N — 2004a: “Energy Efficiency Up Close – Residential: Socio-Economic Trends Versus Space and Water Heating Energy Use”. Office of Energy Efficiency. May. Available online (August 2004) at: http://oee.nrcan.gc.ca/neud/dpa/data_e/Upclose/Residential/UpcloseResidenti al.pdf — 2004b: Energy Use Data Handbook, 1990 and 1996 to 2002, Office of Energy Efficiency. Available online (August 2004) at: http://oee.nrcan.gc.ca/neud/dpa/data_e/Handbook04/Datahandbook2004.pdf — 2004c: “Energy Efficiency Trends in Canada, 1990 to 2002”.

Office of Energy Efficiency. Available online (August 2004) at: http://oee.nrcan.gc.ca/neud/dpa/data_e/Upclose/Residential/UpcloseResidenti al.pdf

Greenpeace Canada A National Framework for Solar Hot Water 36 — 2005: “Final Report Survey of Active Solar Thermal Collectors, Industry and Markets in Canada, 2005”. http://ww2.nrcan.gc.ca/es/erb/english/View.asp?pf=1&x-455&oid=1183 — 2006a: Residential Sector GHG Emissions http://oee.nrcan.gc.ca/corporate/statistics/neud/dpa/tablesanalysis2/aaa_00 _2_e_4.cfm?attr=0 — 2006b: Residential Sector: Energy Use Analysis. http://oee.nrcan.gc.ca/corporate/statistics/neud/dpa/tablesanalysis2/res_00 _1_e_2_4.cfm?attr=0 — 2006c: Canada’s Energy Outlook: The Reference Case 2006. Source: http://www.nrcan-rncan.

gc.ca/inter/pdf/outlook2006_e.pdf REN21, 2004: REN21 (Renewable Energy Policy Network for the 21st century). “Renewables Global Status Report 2004 Update”. www.ren21.net REN21, 2005: REN21 (Renewable Energy Policy Network for the 21st century). “Renewables Global Status Report 2005 Update”. www.ren21.net REN21 2006: REN21 (Renewable Energy Policy Network for the 21st century). “Renewables Global Status Report 2006 Update”. http://www.ren21.net/globalstatusreport/download/RE_GSR_2006_ Update.pdf SIA2: ESTIF. “Sun in Action—A Solar Thermal Strategy for Europe”. April 2003. www.estif.org Soltherm: Ecofys, The Netherlands.

“Soltherm Europe –European Market Report. 2003”. Edited by Bart van der Ree. February 2003.

Greenpeace Canada A National Framework for Solar Hot Water 37 APPENDIX A The SWOT Analysis below was used to build the sections on SHW background, barriers and issues for sustainable development of the solar hot water market. SWOT Analysis Strengths Solar thermal technologies are cost effective today and ready for wide deployment in Canada Distributed energy system, does not need distribution or transmission systems, an on-site generator of energy Surveys show consistently that solar is also the preferred energy choice of Canadians35 Allow individuals ownership of energy generation Appeal to people from an ecological purpose rather than just an economical basis Reduce peak demand for electric utilities Can be installed on any kind of building from a single family home, to multi-family, apartment buildings, commercial, institutional and industrial buildings One of the cheapest ways to generate heat based on life-cycle costs36 Have a 20 to 25 year life expectancy during which the system does not require much maintenance May be used in place of existing construction materials i.e.

an integrated solar roof Can be combined with other renewable energy sources i.e. Biomass, geothermal, ground source, passive solar Reduce greenhouse gas emissions37 Reduce energy consumption and energy costs for consumers38 Create employment and new export products39 Weaknesses Necessity of storage for energy use during hours of no sunshine Small scale of production and deployment System Pricing—Today, upfront cost has to be borne by the homeowner who will probably move before the system is paid off through cost recovery. This can be changed by utilities or • • • • • • • • • • • • • • • • • 35 GPC Opinion Poll, Oct 05 (CanSIA, 2006): 92% would like to see solar resource developed as an energy source 36 On an energy basis, the cost of solar thermal energy ranges between four to seven cents per kWh over the system’s 20- year life expectancy (DSF, 2004) 37 For example, water heating represents about 20% of the average Canadian home total energy bill and results in an average of two tonnes of CO 2 emissions per water heater—DSF report 38 Solar water heaters can reduce the electricity or fossil fuels usually used for water heating by 40–50%.—dsf report 39 CanSIA estimates that six jobs can be created per 1,000 m2 of solar hot water collectors installed not including maintenance personnel.

(DSF, 2004)

Greenpeace Canada A National Framework for Solar Hot Water 38 municipalities deploying the systems. Also there is, as yet, no system in place to attribute the value of an installed solar heating system to the resale value of the house. Low public awareness acceptance –people believe we do not have enough sun Image of solar thermal technology—seen as a poor cousin of PV Lack of financing solutions Slow certification process for systems Lack of regulations for installations Lack of education programs about solar Some inferior systems sold and lack of customer knowledge re: systems Subsidies or incentives that are complicated, intermittent and require a lot of paperwork Inadequate control over quality of systems and quality of installations Inadequate number of qualified installers Not much tracking or monitoring of systems at present Low cost-effectiveness of the systems as current payback time is too long for most investors40 Hours of sunshine are less than optimal during season of heat demand for space heating Opportunities 81% of energy demand in residential and commercial systems is for thermal energy to supply space and water heating needs SHW is a good option for provinces that have challenges in their electrical markets New conventional energy supplies are more expensive to develop especially in ways that are environmentally acceptable Large conventional energy projects will increasingly cost more and take longer to develop Canada’s energy delivery infrastructure is aging —significant increases in investment are needed to replace much of the transmission and distribution network and to increase its capacity An era of higher energy prices is anticipated Growing demand is stressing the supply systems International political uncertainties added to the question of price of fossil fuels Energy prices are increasingly determined in world and regional markets Advanced SHW programs that we can learn from exist in many parts of the world European and Chinese are potential new suppliers of SHW systems Good base for local manufacturing in Canada • • • • • • • • • • • • • • • • • • • • • • • • • 40 The market potential for solar heating products is strongly connected to their price and pay back time and in all countries, improvement of the cost-effectiveness remains an important issue.

This can be achieved through a supportive policy environment, product development and more rational production and installation, especially by installing the solar product in package deals instead of as a separate add-on.

Greenpeace Canada A National Framework for Solar Hot Water 39 Despite barriers and lack of support, many Canadian innovations have been developed demonstrating great potential Federal, provincial and municipal commitments to improve our environment Threats Poor quality systems and/or installations damage the credibility of the technology Over 15 year payback for some home systems On-again, off-again incentives from government send confusing signals to the marketplace and prevent industry from developing long-term business plans Unstable policies and inefficient incentives can seriously damage the production and sales chain as well as consumer confidence.

Current method of pricing solar compared to other energy technologies results in the pricing of solar out of reach of most users –central power plants energy costs are amortized over the life of the power plant (typically 20 to 40 years) and paid in ways beyond simple electricity rates while solar is expected to compete on a payback basis (typically 4 to 8 years) Current fiscal and regulatory policies support the needs of central power generation technologies using nuclear, coal, and fossil fuels. Many of these fiscal and regulatory policies work to the disadvantage of solar Market prices for energy do not fully incorporate environmental externalities so the advantages of solar to Canadian society are not fully recognized Government subsidies provided to fossil and other energy industries but are not available to solar technologies Low level and inconsistency of federal funding for solar “Right-to-Light” and building orientation not protected by legislation • • • • • • • • • • • •

Greenpeace Canada A National Framework for Solar Hot Water 40 APPENDIX B How do Solar Hot Water Systems work? There are many possible designs for a solar water heater. In general, it consists of three main components: Solar collector, which converts solar radiation into useable heat. Heat exchanger/pump module, which transfers the heat from the solar collector into the potable water. Storage tank to store the solar heated water (a solar preheat tank). The most common types of solar collectors used in solar water heaters are flat plate and evacuated tube collectors. In both cases, one or more collectors are mounted on a southerly- facing slope or roof and connected to a 1.

2. 3. storage tank. When there is enough sunlight, a heat transfer fluid, such as water or glycol, is pumped through the collector. As the fluid passes through the collector, it is heated by the sun. The heated fluid is then circulated to a heat exchanger, which transfers the energy into the water tank. When the homeowner uses hot water, cold water from the main water supply enters the bottom of the solar storage tank. Solar heated water at the top of the storage tank flows into the conventional water heater and then to the taps. If the water at the top of the solar storage tank is hot enough, no further heating is necessary.

If the solar heated water is only warm (after an extended cloudy period), the conventional water heater brings the water up to the desired temperature.

There are three main types of collectors: Glazed collectors are insulated on the back and sides to keep the heat in. On the front they have a glass (or clear plastic) cover which allows the sun to come through. The air inside the collector heats up and helps to keep the water in the tubes hot. This allows them to be used even when outside air temperatures are cold. Glazed collectors are appropriate for applications where water temperatures of 30° – 70°C are required, such as domestic hot water, space heating, or year-round swimming pools. These are the most common type of solar collector used in Canada.

Evacuated tube collectors have the tubes encased in a glass vacuum tube. This provides very good insulation for the tubes virtually eliminating heat losses through convection and conduction, allowing them to generate very hot water and be used in cold climates—Glazed collectors with glycol are also used in the Yukon.. They are also capable of collecting energy at very low levels of insolation, for example under heavy cloud cover. However, they are considerably more expensive than glazed collectors. 1. 2. Source: An Introduction to Solar Water Heating Systems, http://www.canren.gc.ca/prod_serv/index.

asp?CaId=141&PgId=750

Greenpeace Canada A National Framework for Solar Hot Water 41 Unglazed collectors have no glazing to keep the heat in. For this reason they will only work in relatively warm weather, when less heat is lost to the outside air. They are appropriate for providing water up to about 30°C. These types of panels are most often used for heating residential swimming pools, which only operate in summer and don’t require very hot water. Their main advantage is low cost. Solar hot water systems are most often used for heating swimming pools or domestic hot water, as these loads are continuous year round.

However, it is possible to use solar thermal for space heating or even for cooling. Regardless of the application, some form of storage is almost always required, since sunshine is not consistent. For swimming pools, the pool itself can sometimes be used for storage, but in other applications a storage tank is required. Depending on the system, a source of backup heat (eg. gas or electric) is required for periods of low sunshine.

3. Solar collectors are typically mounted on the roofs of buildings, away from objects or structures that might shade them. Some collectors are motorized and able to track the direction of the sun, but the high cost of these systems means that most are fixed in place. As a rule of thumb, solar collectors should face south and be mounted at an angle equal to the latitude (eg. 50° above horizontal for Vancouver), but collectors mounted at slightly different angles or directions can also function well. A small pump circulates water through the collectors. This pump is often controlled by a solar photovoltaic panel since the pump requirements match the sunshine available.

For more information see: “Solar Water Heating Systems –A Buyer’s Guide” by NRCan; http://www.canren.gc.ca/ app/filerepository/AC5201041AFA42A1BFD51EA1 28F787CF.pdf “An Introduction to Solar Water Heating Systems” by NRCan; http://www.canren.gc.ca/ prod_serv/index.asp?CaId=141&PgId=750

Greenpeace Canada A National Framework for Solar Hot Water 42 APPENDIX C Solar Potential Calculations A report developed by the David Suzuki Foundation entitled: Smart Generation – Powering Ontario with Renewable Energy (2004) determined the technical feasible number of domestic solar hot water systems in Ontario as follows: Using the above potential numbers, The Canadian Solar Industries Association has estimated the targets for solar hot water usage in Canada based on a direct population ratio41 : By 202542 Residential Solar Domestic Hot Water : 2.4 million systems (6 m2 each) Energy saved: 8 Million MWh per year Sales: $7.2 Billion Commercial and Institutional: 6 million m2 Energy saved 3 Million MWh/year Sales: $3 Billion Potential Number of Solar Units in Ontario Single detached Single detached Attached Low-rise apartments Total 2001 1,547,863 371,501 309,116 2,228,480 2025 with no planning 2,434,279 799,214 478,555 3,712,048 2025 with legislation 2,975,230 1,106,604 655,798 4,737,632 41 Sunny Days Ahead—CanSIA, Personal Communication with CanSIA, July 2006.

42 This estimate assumes an accelerated scenario with a financing program in place with a pilot program initiated in 2005 (700 systems in two years), which is then followed by annual sales growth of 50% a year (achieving 5,000 system installations annually by 2011) for five years and then growing at current typical international growth rates of 30% over the remaining period (2012–2025).

Greenpeace Canada A National Framework for Solar Hot Water 43 APPENDIX D Existing renewable energy capacity end 2004 for Power Generation and heating Existing capacity end-2004 Power generation Small hydropower 61 GW Wind power turbines 48 GW Biomass power 39 GW Geothermal power 8.9 GW Solar PV, off-grid 2.2 GW Solar PV, grid-connected 1.8 GW Solar thermal power 0.4 GW Ocean (tidal) power 0.3 GW Total renewable power capacity 160 GW Hot water/space heating Biomass heating 220 GWth Solar collectors for hot water/ heating (glazed) 77 GWth Geothermal direct heating 13 GWth Geothermal heat pumps 15 GWth Households with solar hot water 40 million Buildings with geothermal heat pumps 2 million SOURCE: Martinot, E.

“Global Revolution”. Renewable Energy World, 02/11/05. http://www.earthscan.co.uk/news/article/mps/ UAN/508/v/3/sp/

Greenpeace Canada A National Framework for Solar Hot Water 44 APPENDIX E LESSONS LEARNED A. SolarBC Solar Hot Water Project (2006) Recommendations from the Final Report of the SolarBC Project43 : The federal government needs to provide a long-term commitment to solar energy. National targets for solar systems need to be set. Solar hot water programs need to part of the national energy plan and national energy programs. Long-term incentives in the form of rebates or tax credits should be put into place to motivate industry.

NRCan should pursue partnering with financial institutions for low-interest loans or a revolving fund program.

NRCan should continue to investigate the potential of partnering with utilities in a solar utility program. To involve municipalities, NRCan can partner with municipalities on a solar cities program. Necessary resources need to be provided so that systems can be certified on a timely basis. Harmonization of shw system standards with European and U.S. standards should be pursued. The feasibility of specifying only the solar panels for a system (and not the other components) for a rebate should be explored further.

Incentives for solar hot water installer training need to be in place to motivate tradespeople to become shw installers. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. NRCan should continue working with ACCC to produce shw training programs in colleges across Canada. Funding for the non-profit sector should be structured such that there is adequate cash flow during the life of the project. Awareness programs for architects, engineers, building developers and real estate agents will be important to promote shw in new buildings. B. Toronto Residential Solar Domestic Hot Water Initiative44 (2001) Summary of Recommendations from the Final Report: Until system costs are permanently reduced, DHW implementers are advised to use targeted marketing; targeting consumers who are environmentally inclined and/or those with disposable income.

Marketing should take on a more “glamorous” approach in order to draw those consumers with higher disposable income – some of whom may not be inclined to participate based solely on environmental benefit. Develop a financing scheme with local financial institution/s and utilities so that consumers are not faced with paying large up-front capital costs. Time sales for a period where consumer finances are less restricted. Continue sourcing partners (private and/or public sector) to fund further subsidies until real price decreases can occur.

Organize a workshop for plumbers/ contractors who demonstrate interest in learning the intricacies of solar DHW 12.

13. 1. 2. 3. 4. 5. 6. 43 Source: Harris, N. SolarBC Solar Hot Water Acceleration Project –Final Report, Nov 2006. 44 Source: Energy Action Council of Toronto. Final Report of the Toronto Residential Solar Domestic Hot Water Initiative —A Technology Demonstration Project (June 2001) Source: http://www.eneract.org/proj/dhwreport.pdf

Greenpeace Canada A National Framework for Solar Hot Water 45 installations. Subsidize the training of these contractors and enlist the aid of The Technology Demonstration project contractors in disseminating information and experience gained. Installer tenders/bidding should be widely used in the future to achieve the greatest possible cost reductions. The Government of Canada should investigate alternative “collateral” options so as to avoid unnecessary financial burdens on project managers. The Government of Canada is strongly encouraged to proceed with the prior- agreed to Market Transformation study, as a necessary step in the development of the solar DHW market.

C. European Solar Thermal Industry Federation45 (ESTIF) What conditions are required for successful solar thermal markets? Cohesive market structures Internalisation of external costs of conventional energies Regulations making the use of solar thermal mandatory Stable and well designed financial incentive schemes Public campaigns promoting solar thermal General awareness of energy savings and environment High awareness of solar thermal, especially among the relevant decision makers Highly visible demonstration projects­—often with public authorities serving as model 7.

8. 9. • • • • • • • • Availability of motivated and specifically skilled installers High trust through quality products and recognised quality label Availability of standard products and applications – showing the success of solar thermal Inclusion of solar thermal in R&D programmes Which strategies can help to overcome barriers to growth? Set positive examples through the use of solar thermal in public buildings Raise awareness through the use of modern communication techniques Set national targets and initiate national/ local support schemes Level the playing field through adequate financial incentives Help make solar thermal a mainstream technology through binding regulation Widen the cost-effective use of solar thermal through R&D programmes • • • • • • • • • • 45 Source: http://www.estif.org/202.0.html

Greenpeace Canada A National Framework for Solar Hot Water 46 APPENDIX F SHW Industry in Canada Solar technologies are primarily an installed product and, unlike almost all other energy sources, are distributed energy sources. The majority of solar products are installed on the building where its energy is required. As such the installation and operation/maintenance jobs will be distributed proportionally to sales across Canada.As the installed base in Canada is exceedingly small, the number of jobs in the Operations and Maintenance sector is currently insignificant.

There is a lack of employment statistics on the solar industry in Canada and, unlike other nations, there is no on-going annual survey that tracks the employment in the industry.

The only information available at present comes from a report by Industry Canada in 2003 entitled “Industry Canada 2003, Situation Analysis of the knowledge, competencies, and skill requirements of jobs in renewable energy technologies in Canada.”46 This report states the following: “The Canadian industry for solar water heating includes suppliers, distributors, and manufacturersofsolarcollectorsandexchangers, and pumps, reservoirs, and regulators. The industry also has consultants. There are approximately 70 companies in Canada most of which are designer/installers (dealers). About half of these consider themselves in the solar business, that is, they also do Photovoltaic design and installation.

There is also a much larger base of between 100–200 dealers (plumbing companies and pool companies) which don’t think of themselves as in the solar business at all and which sell solar systems casually as a small part of their business. Employment without multipliers is approximately 120.” Future Employment Scenarios in the SHW sector As solar systems are installed on buildings and there is no technical operator (such as required by a wind farm or nuclear power plant) – there is a need for local firms to provide maintenance. As deployment increases and the installed base expands this sector will begin to contribute a significant number of jobs.

No work has been done in Canada to define or quantify this job market segment in a mature solar market. CanSIA estimates that 6 jobs are created per 1,000 m2 solar hot water collectors installed.47 This does not include maintenance personal. A study by the David Suzuki Foundation (DSF, 2004) forecasts 10,314 jobs by 2025 just in Ontario.

Solar water collectors are both relatively heavy and bulky and there may be cost savings associated with building manufacturing plants close to their markets. Thus there is potential for further employment through the establishment of manufacturing plants in Canada.