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The most common method of converting solar energy into electricity is through photovoltaic (PV) cells, which convert sunlight into electricity that can be used, stored or added to the grid.
A PV panel is an array of cells, comprised of either crystalline silicon wafers or thin films of silicon and metal.
The amount of electricity generated depends on the intensity of sunlight reaching the panel face. Power output is reduced by cloud cover, seasonal variation in daylight hours, and panel obstruction by snow and dust, and by hail damage. Solar is also an intermittent power source, as its availability fluctuates with weather conditions and is not available during nighttime.
PV cells are being installed at both the residential and commercial scale. Household rooftop projects are typically less than 10 kW, while the capacity of utility-scale farms can reach hundreds of megawatts.
Continuous improvements in PV panel manufacturing have reduced production costs over time, including for conventional crystalline silicon cells, the most prevalent cell across the world. PV module costs have fallen from $6.18/watt in 2004 to $0.85/watt in 2014. Despite this, solar energy is still costly compared to conventional sources of power generation and those costs remain a barrier to the technology’s widespread adoption.
Table 6 – Solar Electricity in Canada: Key Statistics
Source: Canada’s Energy Future 2016: Update – Energy Supply and Demand Projections to 2040
Note: There was zero generation from solar in 2005, so 2010 was used as the base year to calculate generation growth. In 2010, Canada generated 123 MW from solar power.
Solar power is a small but rapidly growing source of electricity for Canadians. In 2015, Canada had over 2 100 MW of installed solar capacity generating 3 TW.h annually. Although this represents only about 0.5% of national electricity generation, solar projects have been developing rapidly, with close to 2 000 MW of capacity added since 2013. Over 98% of Canada’s solar power generation capacity is located in Ontario.
Figure 15 – Solar Capacity in Canada
The stacked area chart shows solar capacity in Ontario and the rest of Canada from 2005 to 2015. Solar capacity in Ontario increases rapidly between 2008 and 2015. In 2015, it represents more than 98% of solar capacity in Canada. Solar capacity growth in the rest of Canada is marginal in comparison and difficult to see visually on the graph.
Figure 16 – Map of Solar Power Plants in Canada
Source: Natural Resources Canada, Renewable Energy Power Plants, 1 MW or more – North American Cooperation on Energy Information
This map shows the location and approximate capacity of solar power plants with a capacity of at least 10 MW across Canada. All solar facilities of that size are located in Ontario.
Global solar capacity has increased tremendously in the last few years. In 2015, about 50 GW of solar capacity was installed across the world for an estimated total of 227 GW. The top countries for solar generation are China, the United States, Germany, Japan, and Italy, which combined account for close to 70% of the world’s solar output.
The primary benefit of solar generation is that it emits no pollutants or GHGs, and unlike wind turbines, is non-disruptive to bats and migratory birds. However, as with wind turbines, some GHGs are released during the production, transportation, and assembly of PV cells. Using land for solar farms also raises concerns about land degradation and habitat impacts, and combining solar farms with agricultural use is more challenging than with wind energy. Finally, solar panels can create waste when they become defunct, as few places recycle old solar panels.
The primary impediment to widespread adoption of PV generation is cost. The average lifetime cost of PV power in Canada was around 23 cents per kW.h in 2016 (See Figure 18), far higher than other renewable alternatives, such as wind, and generally higher than market prices. Because of this, solar relies overwhelmingly on incentive programs for development.
Ontario’s feed-in tariff (FIT) program provides the largest incentives for solar power in Canada which is why 98% of Canadian PV capacity is located in Ontario. FIT pays PV generators 22.5 to 31.3 cents per kW.h as of June 2016 for every grid-connected kW.h of generation, although prices can vary depending on the project’s scale and development timing.
PV accounted for about 5% of Ontario's capacity in 2015, and some growth is expected, including in larger transmission-connected solar farms. However, substantial new penetration in Ontario and beyond will be determined by future prices, incentives, and cost reductions.
Across Canada, some electricity retailers offer net metering to households with residential solar projects. This allows households to sell excess electricity back to the power grid.
Figure 17 – World Solar Electricity Production in 2015
Source: BP World Energy Statistical Review
The donut chart shows solar generation of the top seven producers and the rest of the world. The top seven solar electricity producers are China, the United States, Germany, Japan, Italy, Spain and the United Kingdom. Together, they produce about three quarters of world's electricity from solar. World's total generation of electricity from solar in 2015 was 253 TW.h.
Globally, Canada is a small developer of solar resources. In 2015, Canada ranked 10th in the world for annual PV installations by adding 600 MW of PV capacity; in the same year, China ranked 1st by adding 15 200 MW of capacity. As of 2015, solar contributed 0.5% to Canada’s electricity generation (See Table 6). In comparison, Italy, Greece and Germany led the world for PV penetration with 8%, 7.4% and 7.1% of total electricity demand, respectively.
Germany’s Renewable Energy Sources Act implemented a feed-in-tariff (FIT) for renewable
power. The growth in German PV generation can be explained by generous FIT prices, which are recovered through higher consumer bills. The German solar FIT varies by project size and year, starting at 57-45 euro cents per kW.h in 2004 and declining over time to 9-13 cents in 2014. Since 2014, FIT prices have been determined by auction in order to encourage competition.
Both Ontario and Germany have reduced their respective FIT prices over time. The programs successfully encouraged new PV development, but are being scaled down to control costs.
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