Canada’s Solar Development: Potential, Challenges and Future Prospects

Westbridge Energy Corporation is a Canadian renewable energy company based in Vancouver, Canada, that develops utility-scale solar projects utilising storage and various other technologies to support its projects. Just recently, in early September, the company announced that its Georgetown Solar project in Alberta, Canada, had passed its environmental and wildlife field study programmes and preliminary layout engineering and design. Canada has hundreds of companies in its solar sector, but how suitable is the country really for solar power development?

Canada’s Solar Energy Potential, Challenges and Prospects

Substantial solar energy resources

Canada may seem to some as a fairly cold land that is not particularly suitable for solar power generation, but the country actually has substantial solar energy resources, due mostly to its large area. However, most of the prime areas are, understandably, in the southern part of the country, with the highest solar generation potential in the southern extremes of Alberta, Saskatchewan, and Ontario. The northern territories of Canada still have some solar potential, but a lot less than in the south.

“There are areas of Canada where producing solar is not possible due to the temperature and the snow and everything else, but there are areas of Canada where the solar irradiation is quite significant, especially in the south part of Alberta and Saskatchewan,” says Stefano RomaninSolar Magazine Interviewee Avatar, CEO of Westbridge Energy Corporation. “Just to give an example, the south of Alberta and Saskatchewan, due to the weather conditions and the locations where they are, they benefit from 300+ days of sun. So the production and resources in Canada are really strong. There are some other areas, for example, the North and Quebec, where it is much less, and Vancouver, where it is fairly rainy”.

Canada’s solar sector and incentives

Due to the country’s high latitude, Canada has an overall maximum capacity factor of 6 percent, compared to 15 percent in the United States. Despite this, the Canadian Energy Regulator previously anticipated that solar would form 3 percent of the country’s overall energy generation by 2040. In fact, according to statistics released this year by the Canadian Renewable Energy Association (CanREA), Canada’s solar sector surpassed that figure in December 2020.

In 2009, Ontario assumed a leading position in Canada’s solar sector after introducing a Feed-in Tariff (FIT), which was the first of its kind in North America. This in turn enabled the province to develop a giant solar farm near Sarnia, which, at 97 MW, was the largest such facility in the world until surpassed by even larger solar farms in India and China.

However, Ontario has several other solar farms in operation, including the Arnprior Solar Generation Station (23.4 MW), constructed in 2009, which is scheduled for expansion to 80 MW, the Sault Ste Marie solar farm (68 MW), and the Kingston solar farm (100 MW) constructed in 2015. The province also has some concentrated solar power generation, although these are not eligible for the Feed-In Tariff, due to them not being fully proven in Ontario’s climate. Solar thermal generally is not very well represented in Canada.

PV Potential and Solar Resource Maps of Canada
Photovoltaic potential and solar resource maps of Canada © Government of Canada

“There is very little solar thermal activity in Canada at the moment” explains Nicholas GallSolar Magazine Interviewee Avatar of CanREA. “Unfortunately it has not benefitted from the same cost decreases as solar PV over the past decade, and remains relatively niche. Canada has an abundant solar resource, particularly in southern Ontario, which is the most populous region of the country, and southeastern Alberta and southwestern Saskatchewan. While there is solar development taking place throughout Canada, the majority of it is concentrated in these regions, which have comparable solar resource to southern France or Spain.”

The province of Alberta has seen tremendous growth in demand for solar Power Purchase Agreements (PPAs) from multinational corporate consumers including Amazon, Budweiser, and Grupo Bimbo. This year alone, corporate buyers have signed PPAs for over 540 MW of new utility-scale solar farms in Alberta. In terms of on-site (behind-the-meter) solar, we are seeing strong demand from a wide range of sectors across Canada, including residential, commercial, industrial and agricultural consumers.

Federal and provincial energy policies

Canadian provinces are able to control their natural resources under Section 109 of the Constitution Act 1867. This means that development of energy generation facilities, to some extent, occurs as a result of Federal government-provincial government bargaining. The US also exerts some influence as a neighbouring supplier and consumer of energy. Although oil and gas are still important for energy generation, oil is declining and so the cost of energy generally has been rising. This has stimulated the development of renewable energy plants in Canada, particularly solar, wind and biomass. 

“A lot of people are now looking at grid-parity projects where you can get a PPA and the best place to do that is in Alberta and Saskatchewan,” Stefano says. “First because the solar irradiation is very high and also because it is deregulated, so it is not controlled by the utility but is open to everyone to participate in terms of selling electricity or buying a hedge. The power price is not massively high but is still okay, the carbon-traded tax is increasing every year in line with the policy from the government and a free market where everyone can produce and sell electricity. So that is where the capacity is concentrated now. In Alberta, it is not uncommon to see solar farms of 300 MW each being built. It is the place where the larger solar deployment is taking place. Saskatchewan has very good irradiation, as good as Alberta or even better. The problem is they don’t have a large population, about a million people or maybe a bit more and the market is regulated, so you need to sell electricity through the utility and the amount you can sell depends on how much the utility wants to buy”.

Challenges to solar power development 

According to the Canada Energy Regulator, the primary barrier to widespread solar power generation in Canada is cost. In 2016, this amounted to 23 cents per kWh, far greater than other renewable energy technologies such as wind. Incentives are therefore an important factor in encouraging development. Currently, most Canadian solar generation is located in Ontario, because of the FIT.

Alongside the FIT, which is only available for installations over 10 kW, Ontario operates a microFIT programme, aimed at encouraging microgeneration such as residential rooftop solar PV. However, there aren’t many residential rooftop arrays in Canada because they are generally unpopular, and in some of the provinces, such as Quebec and Ontario, a lot of electricity is generated with hydro and nuclear, thereby producing an abundance of non-fossil fuel electricity.

Unsurprisingly, given similar situations in other countries, wind and solar form the mainstay of Canadian renewable energy generation, having contributed more than any other technologies over the past decade, due to significant cost reductions from technological advancement according to CanREA. 

However, one of the main challenges to renewable energy generation in Canada is space. The long distances with a low population mean that getting power to where most people are living can be problematic.

Solar Power and Electricity Transmission

“Definitely on the utility-scale, the two main challenges are the transmission and PPA agreements,” adds Stefano. “Canada is a country with lots of space which is sparsely populated. The infrastructure has been built mainly to service cities and historically the power plants were built in the cities, so if we look at the very large solar farms in the countryside and we need to move power back to the main cities there is a bit of a bottleneck. If you look at Alberta, they have Calgary, Edmonton, but other than that it is pretty much empty land. So if you want to build a solar farm, you definitely have the land, but it’s a bit more challenging to transport the energy to the point where it can be used.”

Challenge No2 is to make sure you have enough PPA agreement. That is the same in the UK, in Italy and the US. I think we should increase the carbon tax and that, indirectly, will increase the energy price and benefit the green producers so companies will be more inclined to buy electricity from green producers rather than fossil fuel producers.

Future prospects for Canada’s solar

Solar Magazine: Solar Industry News and Insights

Despite the various challenges, the prospects for solar in Canada nevertheless remain positive, with strong support from the government.

“The Government of Canada has made a legislated commitment to reaching Net Zero by 2050, and we see solar as playing a key role in achieving that objective,” adds Nicholas Gall. “Over the coming decade, we would expect to see more stringent building code requirements for rooftop solar on new homes, more businesses adopting rooftop solar as a means of managing their energy costs and carbon footprints, and more procurements led by both corporate consumers and utilities of large-scale solar farms”. 


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