Growth in Canada’s PV installed capacity can be attributed to robust policy framework and innovative financing mechanisms
Ontario and Alberta accounted for 57% and 35% of the total capacity, respectively
The solar sector’s expansion has generated 27,868 full-time jobs and $3.1 billion in business value
A new report released by the International Energy Agency’s Photovoltaic Power Systems Programme (IEA-PVPS) says that Canada has achieved a significant milestone in its renewable energy journey, touching a cumulative installed photovoltaic (PV) capacity of 5.33 GWac by the end of 2023.
This marks a 23% rise from the previous year, highlighting the country’s momentum toward achieving its decarbonization goals. The provinces of Ontario and Alberta accounted for 57% and 35% of the total capacity, respectively.
The report attributes the growth in Canada’s PV installed capacity to a robust policy framework and innovative financing mechanisms. Federal initiatives, such as the Clean Technology Investment Tax Credit, have provided support for PV adoption, making it easier for businesses and homeowners to embrace solar technologies. In addition, updated net-metering policies and Property Assessed Clean Energy (PACE) financing have empowered consumers to transition to renewable energy with reduced financial barriers.
Carbon pricing, which was set at $65 per CO2-equivalent tonne in 2023, has further incentivized investment in renewable energy, says the report, creating a favorable market environment for solar deployment.
Having said this, financing for PV projects often uses feed-in tariffs (FITs) or private- and government-backed power purchase agreements (PPAs), offering alternatives to the risks of selling electricity on the spot market. However, FIT programs have faced both financial and political pressures due to the cost of feed-in-tariff programs. If FIT is too low, deployment is slow; if FIT is too high, it leads to overcapacity with expensive payouts to system owners. To address this, Canada has shifted towards competitive bidding and auctions, fostering a market-driven approach.
PPAs, while offering stability by locking in electricity prices for fixed periods, are subject to intense competition among bidders, which can erode profit margins despite reduced project costs. Though a PPA may offer greater security than selling on the spot market, the competitive pressures of auction-based purchasing may sometimes dampen the pace of PV deployment.
Turning to floating PV or agrivoltaics, the report says there are no support measures for this sector at present. However, the not-for-profit Agrivoltaics Canada Association provides a bridge between farmers, PV installers, academia, and provincial and federal funding organizations to begin several demonstration projects. Agrivoltaics Canada advocates for provincial policy support and changes in land-use designations to stimulate the deployment of PV systems on farmland.
Canada’s PV market has been adopting cutting-edge technologies. The increasing use of bifacial modules and TOPCon cell technologies has enhanced system efficiency, leading to performance gains.
The solar sector’s expansion has not only advanced Canada’s clean energy transition but also delivered substantial economic benefits. In 2023 alone, the PV industry created 27,868 full-time jobs and generated a business value of $3.1 billion.
As Canada strives to achieve 90% non-emitting electricity by 2030 and a net-zero electricity sector by 2035, PV deployment will remain at the forefront of this transition. The growing demand for renewable energy to power electric vehicles, heat pumps, and other technologies highlight the need for continued investment and innovation in solar energy.
In December 2023, IEA-PVPS had released a report, which focused on building-integrated PV (BIPV) (see IEA PVPS Report Reflects On Unified Regulatory Frameworks For BIPV).