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


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.
  • 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
  • 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 . 46
  • 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 shortterm.

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

  • 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
  • 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?
  • 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 lowor 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 inflationproof 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 decentralized energy source.

In the wake of concerns of energy being controlled by transnational 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 nucleargenerated 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 highrise 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 longerterm 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
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