Ontario's Solar Potential

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Accelerating

the adoption of solar

February 10, 2009

Prepared by Michel Fortin with Ken Traynor

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Accelerating the adoption of solar:

Content

• Climate Change: Economic challenge

• How Serious Is Ontario About Solar Energy?

• Ontario’s Renewable Energy Standard Offer

• Evaluating the Solar Performance Of Existing Installations

• Evaluating Residential Solar Performance

• Evaluating the Solar Performance Commercial and Institutional Installations in Ontario

• Evaluating the Solar Performance Of Key Commercial and Institutional Installations in the USA

• Commercial and Institutional Installations Potential in Canada

• Financing As Part Of the Commercial and Institutional Solar Momentum in the USA

• Enhancing The Affordability Of The Financial Products Using Carbon Credits

• Is It Possible that Affordable Financing, With The Proper Government Incentives, Cause The
Tipping Point For Solar In Canada?

2

Accelerating the adoption of solar

• Climate change:"
– No longer a myth and it is shifting economic paradigms around the world."
– At the World Economic Forum 2007 in Davos Switzerland, 2,500 business leaders
recognize the collision course between the reliability of the energy systems and
environmental goals."
– Concludes the need to push towards efﬁciency and small renewable away from large
scale production."
• 75% voted for solar thermal and not clean goal and nuclear"
• Public policy addressing climate change "
• Global carbon tax"
The north is not the only area that will undergo negative consequences"
Source: Conference Board of Canada: D Farrell VP Engineering Aboriginal Relations and Generation BC Hydro

3


• Ontario’s Plan to meet Electrical Energy needs and
Environmental goals to address climate change:"
• In June 2006, the government announced a balanced, clean , reliable and
affordable 20 year plan"
– Conserve 6,300 MW by 2025"
– Double renewables to 15,7000 MW by 2025"
– Eliminate coal-fired generation by end of 2014"
– Maintain base-load with nuclear at 14,000 MW"
– Add gas fired for use in peak periods"
• December 2008, in last step of nuclear procurement, three finalist are named by
March 2009"
Evaluated on:"
– Lifetime cost of power"
– Ability to meet 2018 deadline"
– Level of investment in Ontario"
• February 2009, Ontario announces that it plans to modernize its electricity
transmission system to make it more reliable and more able to accommodate
renewable power inititatives."

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• Options for addressing energy needs and GHG emissions."
– What is the most efﬁcient and abundant?"
Source: National Round Table on the Environment and the Economy June 2006

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• The abundance and power of the Sun"
– One hour of captured solar energy would power the
world needs for a year"
– With today’s technology, less than 0.1% of the
planet surface required to harvest that energy"
– IEA reports that 30% of Canadian and 58% of US
electricity needs could be met with solar on existing
buildings"
Estimated energy reserves and availability:"
" Oil " 22" yrs"
" Gas " 43 " yrs"
" Uranium" 285 " yrs"
" Coal " 463 " yrs"
" Hydro " 23% " of requirements"
" Wind" 153 % " of requirements"
" Solar " 723,750% " of requirements"
Where should we invest our Money?"
Source: Ian McLellan, Arise technology, and Skeptical Environmentalist p. 133

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How Serious Is Ontario About
Solar Energy?

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• Typical electrical demand on a hot summer day"
Source IESO November 2008

8


• Typical available Solar and Wind curve on a hot summer day"
– Wind is diametrically opposed to hot summer day demand whereas the sun
addresses the electrical demand for summer air conditioning."
Source: General Electric Study CanWea April 2007

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• Typical wind availability on a hot summer day"
Source IESO November 2008

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• Source of energy to meet the electrical demand on a hot
summer day. "
– OPA strategy is to use Gas and Coal to meet the peak energy demands"
Source: OPA Town Hall meeting South GTA November 08

Note:"
The OPA did"
not have
Solar as part
of the
solution"

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• Can we count on Solar Power to meet summer peaks? "
“Investment in that technology is certainly being encouraged, need to
look at all the technology to see what contributions they could make
because clipping the peaks during the summer could make a big big
difference in the amount we have to invest on the generation side”."
Bruce Campbell

Vice-President , Corporate Relations

And Market Development

Independent Electricity Operator (IESO)

Conference board of Canada, Canada’s Power Market January, 2007

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Ontario’s Renewable Energy
Standard Offer

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• To encourage electrical generation from renewable sources: "
Ontario developed the Renewable Standard Offer Program (RESOP)"
– Under a RESOP contract the all generators of renewable received 11.08 cents/
kWh, solar photovoltaic (PV) projects received 42 cents/kWh.

– Ontario is on target 15,700 megawatts by 2025, and to bring on 2,700 megawatts of new,
renewable power by 2010.

Solar is
included.

14


• Under the RESOP program"
– Wind contracts generated over 57 MW of electricity as of December 2008"
There’s over

500 MW of Solar
contracted but not
active yet.

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• Wind generated the most KW - 57MW with only 12 contracts over the
two year program, Biomass, generated 25MW with 12 contracts"
• Solar PV generated only 1.6MW with 121 contracts. Dec 2008 saw
63% of the total KW generated come on line. Signiﬁcant increase over
2007 where only 20% came on line."

16


• Solar vs Wind vs Biofuel List snap shot for comparison"
– Solar installations tend to be small in the 1 to 5 kw. Wind and gas tend to be
larger operations. Two large Solar farms in the 10MW range are still in
development"
Full list is
supplied in
addendum A

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Evaluating Solar Performance

Of Existing Installations

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• To evaluating the performance of solar in Ontario
these organization were consulted:"
• Toronto Atmospheric Fund"
• Toronto Renewable Energy Co-Operative"
• Our Power"
• IFC International"
• Carbon Capital Management"
• ZeroFootprint"
• Ontario Sustainable Energy Association"
• Green Act Alliance"
• Companies - Arise Tech, Mondial, SolarPower"
• Navigant Consulting* US statistics"
• Clean Air Foundation"
• Toronto Conservation Authority"
• Canadian Solar Industry Association"

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• The performance of these solar installations in
Ontario is difﬁcult because…"
– “At this point no one seems to be tracking commercial/residential
renewables installs”."
– Danielle Murray Solar Program Coordinator Toronto Solar Neighbourhoods Initiative"
– “You are correct in many of your observations that solar is still perceived as
an “alternative” source of energy as we haven’t broken into the
mainstream... yet. One of our challenges is that as an association we
require more data and information. We are slowly building our database of
information for the solar market in Canada but have a ways to go”."
– Wesley Johnston Director of Policy and Research Canadian Solar Industries Ass."
– “(I will contact)… the CanSIA office to see if anyone has actually "quantified"
the average amount of energy required by a Toronto home and how solar
would impact the home and the grid. I believe it is important that CanSIA
"connect the dots" with individuals and initiatives like your are pursuing”.
– Richard Thorne, Past Director, Canadian Solar Industries Ass. , Alpha Technologies"

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Evaluating Residential

Solar Performance

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Residential Performance Waterloo

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Residential Performance: Port Credit

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• Residential Performance Waterloo

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• Condo Building Performance Scarborough

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Evaluating the Solar Performance

Commercial and Institutional

Installations in Ontario

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• Commercial Performance…

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• Woodgreen performance

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• Commercial Performance- Beaches

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Coatsworth

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• Commercial Performance…Coatsworth

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• Commercial Performance…on greater scale
– Jimmie Simpson Recreational Centre

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– City of Toronto Central Maintenance Garage

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– Arena Project with energy retrofits

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Commercial Performance…
• Toronto Exhibition Place
– Largest solar roof top
install in Canada 100 KW
• 1.5-2 megawatt solar photovoltaic installation

• primary goal of reducing carbon dioxide (CO2)
emissions

• PV installation has 536 solar modules

• 15,368 square feet of total surface area

• 120,000 kilowatts hours per year.

• equivalent to removing 23 cars from the road
completely or adding 1,600 mature trees or 17
acres of forest in the heart of downtown
Toronto.

• The BBP provided Exhibition Place with a zero
interest loan of $600,000

• Cost $1.6 millions

• Savings, $148,000 annually

• 472 tonnes of CO2 annually

• s

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Evaluating the Solar Performance
Of Key Commercial And
Institutional

Installations In The USA

37

Commercial Potential…
• To produce more than 1.7 million kwh
per year

• Approximately 50% of the winery's total
energy requirement

• Reduce the facility's carbon footprint in
an amount equivalent to planting 2,500
acres of trees

• Or driving an average automobile 25
million miles,

• Or taking more than 2,000 automobiles
off the road

• Wines produced at Gonzales include
Robert Mondavi, Black Box and Hayman
& Hill


More Than 6,300
Solar Panels Atop
Winery!
Solar panels and biogas projects are part of the overall Corporate Responsibility Program for many company"
In Canada, Constellation's Jackson-Triggs and Inniskillin wineries at Niagara-on-the-Lake in southern Ontario turning the
pomace into methane for operations and residential heating

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• A network of solar electric (PV) in
"Sustainability Planning Zone" power
capacity of ﬁve megawatts (5,000
kilowatts).

• Minneapolis home uses about 8,400 kWh
(kilowatt-hours) of electricity per year.

• system will contain about 25,000 solar
electric panels (at 200 watts per panel)
and could power about 2,900 homes for
an entire year!

• 10 to 100 kilowatts in size, rooftops of
commercial and industrial corridor

• .


The ﬁrst US urban solar farm in

Minneapolis / Saint Paul

At a higher latitude not tempered by the lakes,

The Twin City likely experience harsher winters

than Toronto

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• The largest solar distributed
generation programs ever conceived
with Developers Diversiﬁed Realty, a
Cleveland-based real estate
investment trust (REIT) engaged in
the development and management of
shopping centers"
• SunEdison has the rights to deploy
solar on 200+ shopping centers, an
estimated 30 million sq. ft. "
• Potential of 259 MW and the centers
are located in 24 states and in Puerto
Rico."
• Shopping center tenants can beneﬁt
and realize energy savings by opting
to purchase the power generated
through the program at rates lower
than retail energy rates

• A typical-sized solar avoid an
estimated 10 million pounds of
carbon dioxide"

Whole Foods

Kohl’s Dept Store

SunEdison announces one of
the largest solar distributed
generation programs!

40


Commercial and Institutional

Installations Potential In Canada

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• Canada's industrial market around 1.4
billion square feet of space end of 2008.

• The majority of that space - 825 million
square feet - is in the GTA

• despite the unpredictable economy,
Cushman & Wakeﬁeld is only predicting
a 0.7-percentage-point rise in vacancies
this year, CDN supplies kept tight.

• Canada yr end 2008 est. vacancy rate of
5.8 per cent - low compared with many
US cities that suffered double-digit
vacancies


Commercial Potential in:

Canada 1.4 billion sq. ft.

GTA 825 million sq. ft. "
How it looked in the fourth quarter of 2008.

Vancouver

Calgary

Toronto

Montreal

National

Total inventory ('000s)

180,335

102,832

825,457

276,872

1,419,821

Vacancy rate

3.2%

3.1%

6.4%

6.4%

5.8%

New supply ('000s)

5,884

2,951

8,612

2,462

20,155

Net asking rent ($/psf)

$8.90

$9.64

$5.49

$4.70

$6.11

THE GLOBE AND MAIL // SOURCE: CUSHMAN & WAKEFIELD LEPAGE

Source: Report on Business Globe and Mail

42


Financing As Part Of

the Commercial and Institutional

Solar Momentum in the USA

43


Whole Foods

Kohl’s Dept Store

Financing

Non-Residential

Photovoltaic Projects

• Financial innovation has helped to
overcome some of the most
signiﬁcant barriers facing PV
adoption, including: high up-front
costs, the need for a signiﬁcant tax
base, O&M capabilities, and
willingness to shoulder performance
risk"
• Studies by commission by the US
government could serve as
guidelines for Canada"

44


Green Financial Products
Retail Banking Examples
Home Equity Loan

New Resource Bank, US

• One-Step Solar Financing. Takes place over a 25-year term, equal to the same period of time
as the solar panel warranty.

Citigroup, US

• Signed a joint marketing agreement with Sharp Electronics Corporation to offer customers easily accessible and convenient
ﬁnancing options to purchase and install residential solar technologies.

Enables users to take out a home equity loan or line of credit rather than access savings or take out a general loan.

Source: UNEP Finance Initiative, August 2007, IFC Consulting Canada Ltd.

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Home Equity Loans

One-Step Financing and Partnering with Manufactures

One-step financing, introduced by New Resource Bank (NRB) in 2006, was developed to help US
customers finance residential solar power installations. In partnership with SunPower
Corporation, a manufacturer of high-efficiency solar technologies, the long term financing
program customizes home-equity lending products, aimed at providing clients with cost-
effective options to own renewable solar power. Under the solar financing scheme, NRB
customers complete a one-step application process, and then make monthly loan repayments
while generating their own electricity using SunPower’s solar technology. NRB’s financing
occurs over a 25-year loan term, equaling the same period of time as SunPower’s long-term
solar panel warranty. In general, after rebates offered by California’s million solar roofs
program, NRB’s solar financing can provide solar power to a home for as little as US$100 per
month. This cost is lowered even more given that the interest expense on a solar loan is tax-
deductible


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Microfinance

At present, a number of banks are considering the opportunity to provide micro loans to individuals and SMEs
who are generally denied credit (public or private), in order to finance small environmental projects, such as
small solar installations.

In Europe, Credit Suisse, Société Genérale and Santander have recently entered this area by refinancing local
lenders, while Barclays is planning to provide green microfinance services in developing countries,
including South Africa and Ghana. In a survey of 34 selected banks, between 1998 and 2000, it was found
that four banks in North America, and three in Europe offer microfinance. Four of these banks offer
microfinance to developing countries, including: Rabobank; Deutsche; Citigroup; and Royal Bank of
Canada."

47


Project Financing
JP Morgan, US

Led the effort to raise $1.5 billion of equity for the wind power market in 2006, with
approximately $650 million allocated to its own portfolio. The ﬁrm’s renewable
energy portfolio now comprises approximately $1 billion of equity investments in
26 wind farms since its inception in 2003. The ﬁrm is also actively pursuing
investments in biomass, geothermal, and solar power.


48


Private Equity

City group

Private Equity Private equity investments in wind, solar and biofuels through

Alternative Investments’ Sustainable Development Investment Program

Indices"
ABN AMRO, JP Morgan"
Indices Series of environmental private investor eco-market products

includes a biofuels commodity basket, total returns solar

energy index, clean renewable energy index and total returns

water index (e.g., enables interested parties to invest in water

as a commodity)"

49


StakeholderAlignment Opportunities"
Manufacturers

Partner with contractors and manufacturers to offer green financial products, banks become familiar with the
entire product value chain; from beginning to end. This enables the bank to tailor its product offerings to
meet the long-term needs and goals of its clients, while at the same time strengthening the client-institution
relationship. A perfect example of this approach is NRB’s Solar Power one-step residential financing
product; a collaborative initiative between the bank and a Californian solar installation manufacturing firm."
Government

Align green financial product and service development with federal/state-led environmental or energy policies, targets

or incentives. For instance, NRB’s Solar Power Loan complements California’s million solar roofs program, in which loan

holders further benefit from the state-led incentive solar incentive program. The collective public/private environmental and

economic goals will help share risk and resources between the state, bank, and solar power manufacturers and contractors.

At the same time, these different groups, in partnership, will help deliver key environmental messages and products to a

wider range of audiences. "

50


Other Products
Wainwright Bank & Trust: Home Loan for Solar Power

Wainwright Bank & Trust provides clients a 1% rate reduction, with an additional 0.25% reduction, if homeowners choose

for automatic loan payments to be made through a Wainwright checking account. To apply for a green loan, the customer

must ﬁrst contact MassEnergy of Solar Boston to acquire information on local solar contractors. For a ﬁxed term of 5, 10 or 20
years, a Wainwright’s green loan can be provided for US$5,000-100,000

CFS: Home Loan for Solar Power

CFS collaborates with both the NGO Royal Society for the Protection of Birds (RSBP) and SolarCentury, a solar technology

manufacturer and provider, to provide a low-interest loan product to purchase domestic solar hot water and electric systems.


51


Enhancing The Affordability

Of The Financial Products

Using Carbon Credits

52

Can Carbon Credits be part of the financing equation for
Solar Photovoltaic? - TBD
• OPA response to CanSia’s ISPL questions:
– Was any analysis done of the net benefit of renewable generation,
customer-based generation and fuel switching as a result of the possible
introduction of a carbon tax and/or a cap and trade system for carbon?
– RESPONSE 11: The OPA has not conducted an analysis of the effects of a
possible carbon-tax regime or a cap-and-trade system for greenhouse gas
emissions. However, the OPA is aware that the IPSP supports the government’s
policy to reduce emissions and that this is taken into account when considering the
development and implementation of the planning criteria. At this time, the
framework, at the federal or provincial level, for applying a carbon adder to
greenhouse gas emissions from a specific sector, resource or industry is still
evolving. The OPA continues to monitor developments in this area.
Solar Thermal can generate CC be as it is not part of RESOP Contract

53


• Environmental Attributes means environmental attributes associated with a Contract Facility having decreased environmental
impacts now or in the future, and the right to quantify and register these with competent authorities, including:
• (a) all right, title, interest and benefit in and to any renewable energy certificate, credit, reduction right, offset, allocated pollution
right, emission reduction allowance or other proprietary or contractual right, whether or not tradable, resulting from the actual or
assumed displacement of emissions by the production of Electricity from the Contract Facility as a result of the utilization of
renewable energy technology;
• (b) rights to any fungible or non-fungible attributes or entitlements relating to environmental impacts, whether arising from the
Contract Facility itself, from the interaction of the Contract Facility with the IESO-Controlled Grid, the Distribution System or the
Load Customer, or because of applicable legislation or voluntary programs established by Governmental Authorities;
• (c) any and all rights, title and interest relating to the nature of an energy source (including a Renewable Fuel) as may be defined
and awarded through applicable Laws and Regulations or voluntary programs, including all Emission Reduction Credits; and (d) all
revenues, entitlements, benefits, and other proceeds arising from or related to the foregoing which may be available in connection
with the Contract Facility; but excluding WPPI and RPPI payments and such other items as the OPA may determine in its sole
discretion at any time and from time to time, such excluded items to be posted on the Website and revised periodically. For greater
certainty, in the event that any governmental or non-governmental agency, whether provincial, federal, national or international in
scope or authority, creates or sanctions a registry, trading system, credit, offset or other program relating to Environmental
Attributes or their equivalent, the term “Environmental Attributes” as used in this Agreement shall include the rights or benefits
created or sanctioned under any such program or programs to the extent available as a result of, or arising from, the production of
Electricity from the Contract Facility.
RESOP Contract: Carbon Credits

54


Is It Possible that Affordable Financing
With The Proper Government Incentives

Be The Tipping Point For Solar In
Canada?

Ontario Government to Announce Green Act This Month

55


Environmental Awareness and Public Opinion
• Historically Canadian public’s top priority saw “the environment” issue ﬂuctuate
between 4% and 12% for more than a decade. As of August, 07, polls form the
Strategic Council places this issue at 26%, and the Environics Poll at 31%

• Americans want greener products and are prepared to spend money to try new
technologies that will help reduce GHG emissions. Speciﬁcally, the poll found that
75% of the public is willing to purchase solar panels, and 67% would consider
buying a hybrid vehicle.


Possible Branding and Business Opportunity for BMO

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Anything is Possible
Seville Spain PS10
624 solar panels produce enough energy to power 60,000 homes

secondary plant, composed of 154 panels, which will generate
enough electricity for about 1800 homes.

57


Nellis Air Force Base outside of Las Vegas
140 acres of land, the photovoltaic system is based on
72,000 solar panels producing 14 megawatt

58


Ringstrasse Street in Vienna, Austria
Street lighting consumed 10 percent of all the electricity used
in Europe in 2006 or 2,000 billion KWh, and resulted in carbon
emissions of 2,900 million ton

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Thank You
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