Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 1 - Evidence - November 4, 2004
OTTAWA, Thursday, November 4, 2004
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 8:38 a.m. to examine and report on emerging issues related to its mandate.
Senator Ethel Cochrane (Deputy Chairman) in the Chair.
[English]
The Deputy Chairman: Honourable senators, we will begin even though Mr. Allen has not arrived. It has been agreed that we will proceed and Mr. Allen can join you when he comes, if that is okay.
I want to welcome our guests. First, I know you have met some of us. I do not know if you have met Senator Gustafson — I am Senator Cochrane — and Senators Christensen and Finnerty.
I want to begin by welcoming you here. We are anxious to hear what you have to say, especially about the solar energy side of it.
I understand that we have requested that you speak for 10 minutes and then we will have time for questions.
Our new senator is Senator Lavigne, from Quebec. I am sure he is interested in solar energy as well.
Mr. Michael Carten, President, Sustainable Energy Technologies; Canadian Solar Industries Association: Thank you very much, everybody, for seeing us. I am Michael Carten. Brian Wilkinson, from Halifax, and I represent the Canadian Solar Industries Association. I hope all of you have our presentation. Perhaps I will step through it.
The Deputy Chairman: We do have it.
Mr. Carten: Excellent.
The solar industry comprises three separate industries. Solar thermal is air and hot water heating. You often see it used with swimming pools. Photovoltaics is the conversion of solar energy into electricity. Passive is space heating and lighting.
There are about 400 companies in Canada in the solar industry.
Right now it is a nascent industry, with about 1,000 jobs, but the growth is estimated to be about 50 per cent in the next two years. The solar industry is growing around the world at a rate of about 40 per cent per year. Nationally, we have about $100 million in annual sales that are growing at a rate of 15 per cent to 25 per cent per year.
A number of Canadian companies are active in the industry, manufacturing and exporting products, some in the West and some here. The fact that we have companies manufacturing product for export is not well known by the government.
Senator Lavigne: Is this information available on paper in French?
The Deputy Chairman: With apologies, senator, it is not here now but we do have a translation.
Senator Lavigne: I understand English but I prefer to have my papers in French because it is easier for me.
The Deputy Chairman: I understand, senator. We will obtain the French version for you.
You may continue, Mr. Carten.
Mr. Carten: Several companies in Canada are engaged in manufacturing and the development of new technologies. Canada does have the solar resources. In fact the amount of energy that we can capture from the sun is greater than that which is being captured in Japan and in Germany, which are the two world leaders in solar energy. In Southern Alberta we have as much solar energy falling on the Prairies as they have sun in Southern California.
The cost of solar is dropping quickly, faster than any other renewable energy technology. When you measure the cost of solar energy over a 20- or 30-year period, which is the life of these assets, it is highly competitive with thermal energy, particularly diesel fuel, gas and electricity. You can well imagine that because of the increased cost of gas and electricity.
The next slide is on heat energy. About 75 per cent of the energy used in solar is for space and water heating. That reflects the movement in that area of the technology. Following that is what is called PV, photovoltaic. In fact, Albert Einstein received his Nobel Prize for photovoltaic effect technology.
The next two slides are graphs showing the participation of Canada and where we fit in the use of renewable energy around the world. You can see that it is not a happy scenario. Canada is well down the list in terms of the use of solar energy. International growth in solar PV was 36 per cent in 2003. Canada's growth rate was about 20 per cent, but from a tiny base. It is a similar situation with solar thermal. If you look at the OECD countries, Canada is down in eighth or tenth place. Mr. Wilkinson indicates that Canada is 17th out of 22 reporting nations in the use of solar energy. Germany is the current leader in that area, although it is constantly under cloud, I believe.
The next slide is entitled "International Solar PV Funding," which shows that Canada is dead last on the list. The average is 61 cents per capita in international energy agency companies. The questions are: What is Canada's vision? Where do we want to go with it? How will solar play a role in the future? We are arguing and advocating that we should have 25 million megawatt-hours of solar generation or solar power energy by 2025 — both electrical and thermal. That equates to the energy needs of about 2.5 million Canadian homes. In fact, it is the amount of energy that was produced by Ontario's coal-powered plants in 1999. That gives you a sense of the order of magnitude.
The economic benefit will be the generation of sales revenues and jobs. It will create opportunities for the graduates of our universities and technical colleges to work in an industry in which they want to participate. There will be environmental benefits as well. At the end of the day, we have to reduce the amount of energy consumed, and thermal energy and solar is a way for that to happen.
Locally, based on a community of 100,000 Canadians, there would be about 200 jobs in sales, installation and maintenance. There would be about 100 manufacturing plants across Canada, and local sales would generate about $100 million to pay for systems. Energy costs for gas, oil and coal to generate heat and electricity would be avoided.
We have 10 recommendations to make solar energy a major part of Canada's energy mix that are shown on the next slide, entitled "Key Recommendations."
Mr. Brian Wilkinson, President, Matrix Energy; Canadian Solar Industries Association: The 10 recommendations are more detailed in the paper version before you this morning. We will summarize five key recommendations in our presentation.
The Deputy Chairman: That would be fine.
Mr. Carten: The first recommendation is for a national, renewable energy strategy. We have to approach renewable, alternative energy in a coherent fashion.
The second recommendation is for increased government funding. The level of support to bring these new technologies on board is well below international averages. We must set a target that will bring us up to that international average within the next two years and that will put us in the top five within the next five years.
The third recommendation is the establishment of financial mechanisms that will allow people like you and me to have solar power in our homes. Solar power, unlike other renewable energy, is the one energy source that the average Joe can acquire on his own. It is the area in which he can make a contribution to creating a solution. The problem is financing. We need a financing mechanism to make it work.
The fourth recommendation is to begin deployment programs. We need people to see solar energy around them and that it can be done. We need to make it a reality, not just a dream. We need to duplicate what other countries have done. Japan and Germany are world leaders because they are investing in the programs and allowing people to put solar in their homes and businesses. We need to do the same.
This morning we are asking for senators' support for this principle and for this industry, which will be a significant part of the energy mix over the next 30 years. It is time to ask the Prime Minister and ministers to put it on their agenda.
We would like to get your support for local initiatives at the community level. Solar, unlike wind, and unlike many of the other technologies, can be a community resource. You can use it on schools and hockey rinks; that is where you can get the value.
We would ask you who are here today to support the development of policies that actually do focus on solar. We have an industry in Canada. We have companies that are investing in new technologies and creating product. We are at a point where the wind industry was 20 years ago in Canada. We have an opportunity to be a player on the world stage if we will invest in the technologies.
Mr. Wilkinson: I am not sure if you are aware that Canada is the number two user of energy per capita in the world. I find it embarrassing that we are not doing more to try to lower our rate of energy consumption and increase the funding given to the technologies.
I have nothing against the other renewable technology that has been touted. There are no manufacturers of that type of equipment installing systems in Canada, unlike the solar thermal industry, which is providing a large and growing number of employment opportunities. I can speak personally about my organization. Our staff is up 30 per cent over last year. I expect to be hiring almost as many again this year. The technology that is being developed in Canada is being used in Canada and, to the extent possible, we are exporting. Probably 80 per cent of the product of two of the largest solar thermal organizations is going outside this country. We are starting to look outside this country because the market, while it should exist here, does not.
The Deputy Chairman: I want to remind you that we recently completed a report on the One-Tonne Challenge, which is, of course, a challenge to individual Canadians to reduce greenhouse gas emissions. That report will be released within the next couple of weeks.
As chair, I will begin by asking you to tell us how solar energy could be used to help both individual Canadians and businesses reach this target.
Mr. Wilkinson: The installation of one solar water heater on a house will reduce greenhouse gas emissions by two tonnes. You can double your commitment to the One-Tonne Challenge by installing solar domestic water heaters on your house.
Senator Lavigne: I would like to know how much it costs to put one solar water heater on a house and how many units you need to heat a house with four apartments.
[Translation]
Mr. Wilkinson: Approximately $4,000 for the water heater unit.
Senator Lavigne: For each unit?
Mr. Wilkinson: No, for a four-unit building. The cost is approximately $4,000.
[English]
Senator Lavigne: To put the unit on top of the house?
[Translation]
Mr. Wilkinson: And that will result in savings of approximately 65 per cent in a person's water heating bill.
[English]
Senator Lavigne: Good.
The Deputy Chairman: That is very good.
Senator Christensen: Thank you for your presentation.
As you know, back in the 1980s we had the oil crisis and we seemed to be running out of oil. We seem to be constantly running out of oil, but it keeps coming back. There were a number of programs for solar energy, both for PVs and for hot water.
There were programs then to help contractors and individuals do the installations. Has there been any significant growth as a result of those government programs of the 1980s? Once we discovered there was more oil, prices started dropping, and since about 1988-89 we have not had those types of programs. Has there been any growth since the 1980s to the present, or did we get that bump and then it dropped off and that was the end of it?
Mr. Wilkinson: I started my business around 1985, when the PUSH, or Purchase and Use of Solar Heating, Program to which you are referring was available. In a nutshell, it was an incentive program designed to encourage retail customers and small commercial customers to install solar water heating systems on homes and businesses. It was a declining program, in that every year the amount of the incentive was reduced.
It has been demonstrated time and again that if you want a new technology to develop and flourish, you will need to encourage it through incentives.
The European, Japanese and American models are constantly repeating this. The PUSH Program is a classic example of what happens when you take away that incentive, which was terrific. I started my company back in 1985 as a result, certainly supported by that program. Our sales were going up until the point when the government started pulling it back.
The minute that subsidy stopped, people stopped buying. In the last year that subsidy was in place, we had almost 10,000 systems installed. We had three or four major manufacturers. There was Solcan, Thermo-Dynamics, Petro-Sun and a fourth one. Of those companies, only Solcan and Thermo-Dynamics dynamics still exist. A good 95 per cent of Thermo-Dynamics' product is exported to the United States and Europe.
Until the industry is able to support those numbers on its own, to get the economies of scale, it needs those subsidies to continue.
To answer your question directly, we have probably fallen off since that peak of 1989 or thereabouts.
Senator Christensen: How long should subsidies last?
Mr. Wilkinson: That is a good question, but a hard one to answer.
I cannot place value judgments for you on where you think money should be spent. You could build a case for subsidizing any industry, be it aerospace or renewable technology. There is a need, depending upon your commitment to solving the Kyoto issue, to developing an industry that can compete worldwide. There is no question the world needs energy and that Canada has technologies that the rest of the world can use. If we do not have some encouragement to develop those, it is difficult to continue.
I might add that right now we have the Renewable Energy Deployment Initiative. Without that program, the solar thermal side of our business would probably not exist. Thermo-Dynamics would probably not exist. Conserval Engineering makes the world-renowned solar wall technology. It is the world's most cost-efficient, effective solar air heating system in the world and was developed by a Canadian in Toronto, Mr. John Hollick. That technology would not exist without the REDI program. That program is typical of Canada's on-again, off-again commitment to renewable technology. This program started in 1998. I was on CanSIA's committee at that time. We made recommendations to the finance department because at the time, there were no subsidies given to solar except via class 34.1 of the tax act, which gave us an accelerated tax write-off. Unfortunately, it only gave us that write-off on solar thermal technologies used in the direct manufacturing process. I can tell you that no solar technology is used directly by manufacturers in their process. We are a low-heat technology, not an extremely high-heat technology such as is used by industry.
In order to compensate us for that, class 34.1 became class 43, but at the same time, they introduced the Renewal Energy Deployment Initiative to encourage Canadians to buy solar technologies. For those of you who are not aware of it, it makes a 25 per cent direct financial contribution to the owner of the cost of the installed system.
Unfortunately, it is a three-year program. I cannot run my business with a three-year horizon, particularly when you finance the program, but if you run out of money, it stops. How do I tell a client like Bombardier, to whom I have sold seven systems, the government ran out of money? We have to cancel that job. It is embarrassing for me and for the country. You meet with executives of a large organization and you say, "This project was to go ahead, but now you have to pay the other 25 per cent."
This type of thing has made it difficult for our industry to proceed. Currently, nothing like this program exists for the photovoltaic industry. The U.S. and other countries in the world are clamouring to get photovoltaic systems on people's roofs. It is technology that will sit there for 45 years, pumping out energy with virtually no environmental damage. The cost of a photovoltaic module is recovered within 18 months of its use. They are 100 per cent recyclable when they are finished. They use silicon technology — silicon is basically sand and glass — and aluminum. There is nothing complicated about it. Companies such as Michaels that are producing accessories to enable grid-tie to the grid need this type of program to move forward. We are falling further behind while the world races ahead on this technology.
Senator Christensen: When we look at PV installation capacities, are other countries offering extensive, ongoing subsidies?
Mr. Carten: For the most part, yes. The Japanese led the way. They have now almost eliminated their subsidy because the costs have come down and the energy prices have gone up. The Germans are second now because of their subsidies for the installation of systems — they have backed off nuclear, as you know — and that market is exploding. Some countries in the European Community are starting to pick them up. Spain and Italy, for example, are starting to put in subsidies that allow average individuals to have solar panels on their roofs and sell the power into the grid. The hypothesis underlying that is this will make Germany a serious player in the industry. To get the industries moving — we did it with the wind power industry and then we lost it — we have to put the subsidies in place to create a domestic market for our companies that are manufacturing the technologies. Yes, they all have a subsidy of some sort. In the United States, Arizona, California, New Jersey and New York have subsidies that give you a buy-down. They subsidize the capital cost of the PV system. They are two different approaches but they reflect a commitment on the part of the community to saying, "We are the ones to encourage renewable energy installation and therefore the community should pay part of the cost, not just the owner or the power plant."
Senator Christensen: Those are subsidies. Do they not have a finite life?
Mr. Carten: They do. The German one comes down to 5 per cent a year. The Japanese one is being phased out. Spain had the same subsidy program as Germany. It was not guaranteed beyond a year until last year. They changed the program and it is now guaranteed for 20 years. If you put the system in you get the pricing for 20 years. They will go from perhaps 6 megawatts of installed capacity to 20 megawatts annually this year in terms of new PB.
Senator Gustafson: This is a very interesting subject. Yesterday, those of you who are fortunate enough to live in Saskatchewan had a presentation from the nuclear energy people. It seems we are in a situation now, whether it is wind power, nuclear or the tar sands, where there is a great deal of competition for where we will go. Now, what is the cost to, say, an average homeowner to put in the Cadillac system?
Mr. Carten: The cost for a photovoltaic system depends on the size.
Senator Gustafson: For an average home.
Mr. Carten: It would be 3 kilowatts, about $40,000. That would give you free energy for 30 or 40 years.
Senator Gustafson: Would there be a great deal of upkeep?
Mr. Carten: No, none — zero.
Senator Gustafson: This operation does not wear out?
Mr. Carten: It does not wear out.
Senator Gustafson: $40,000.
Senator Adams: All you need is sun.
Senator Gustafson: Estevan, Saskatchewan, is the sun capital of Canada. We get more sunlight there than any other place in North America.
Mr. Carten: Solar power, like all renewable energy, is not a complete answer. The sun does not always shine. It is an exercise in load-balancing. What happens with solar, particularly in Europe, is the peak power comes in the middle of the day, so it is ideal for reducing the amount of energy from coal-fired generation being used, typically, coal or gas. It is really a fuel-saver in a way. Senator Adams, in your constituency, you rely totally on diesel.
Senator Adams: Yes.
Mr. Carten: Like wind, solar can be used simply to reduce the amount of diesel fuel being consumed and it is economic over the long term.
Senator Gustafson: You are facing the same problem as the gasohol program. Governments have to subsidize it to make it competitive. In Saskatchewan, there was talk of putting in two new plants. After the government did the numbers, how much the subsidy was and how much money they had to put up, the plants did not go ahead. The idea is great but the problem is dollars.
Mr. Carten: I would like to address that, if I could. I know Mr. Wilkinson is chomping at the bit. I come from the energy industry. I was involved in oil and gas for years. That was one of the most heavily subsidized industries in North America, after the nuclear industries. The oil sands of today are totally the result of the federal government stepping up and giving huge subsidies to the first Syncrude project. They did that to bring the costs down, and as they came down it became more economic. That is the same kind of principle, and the same kind of commitment that has to be made, in the renewable energy industries.
The second point is that there is another side, other than the GHG emissions and the cost of energy. In the 1980s, Canada had a leadership position in the wind power industry. We lost it. For all the money we give now to the wind power industry, you can hear this big sucking sound in Germany and Denmark as they pull that money back into their countries. We do not have companies that make wind turbines any more. In the solar industry we still have an opportunity to play a role. We have companies manufacturing and exporting products. We have companies such as my own who do the electronics. Xantrex in Vancouver, which also does the electronics, is a world-class company. If we can support the industry, we have an opportunity to be a player in the game. Otherwise, we will be a spectator. We are a spectator in the wind power industry now. We have an opportunity to be a player in the solar industry now. It is at that stage of its development that if we intervene now, we can be a player. If not, we will be a spectator.
Mr. Wilkinson: In terms of the $40,000 cost to which Mr. Carten referred, that is a reality of the solar industry. Our customers are forced to pay for all energy that their system will produce up front. In Quebec or Ontario, where it might be nuclear energy, the governments and the general population are subsidizing the construction of that plant over many years. I am not saying it is right or wrong, but I am bringing it to your attention that our customers are forced to pay up front, whereas everyone else has pay as you go.
We met with members of the Bloc caucus yesterday. We got into the discussion that it is a provincial jurisdiction, but it would be nice if the utilities would be willing to buy systems and then lease that energy to the customers, as they do with dams and coal-fired plants, what have you.
It is a reality. Perhaps this is not the place to address that, but when you talk about a $40,000 cost —
Senator Gustafson: There is no question that there is competition, and it seems to be mounting. The tar sands people will say that they have an infinite supply. The governments of Alberta and Canada are saying that they want their money back, so they will push that kind of energy. This is what you are facing.
Senator Adams: I was an electrician before I got into the Senate. Now we are paying for the kilowatt hours in Nunavut. I heard the day before yesterday that the cost of electricity will be increased by 30 to 40 per cent. I am paying 45 cents a kilowatt. Commercial places are paying 47 cents.
I think that solar energy is the answer in Nunavut. I was up there last week. The people of Grise Fjord said, "Senator Adams, we would like to invite you to the community this winter." I asked what month. They said to maybe wait until it is daylight. Grise Fjord is dark now. That is typical. Between April or May and August or September, we have pretty near 24-hour daylight.
I am familiar with solar energy. Up there, it is typical to have up to 30 or 40 feet of semi frost. In some places, there are holding tanks to be able to have a hot water system and everything. Most now in the community will use oil-fired heating systems in the houses.
One company makes shingles for the roofs to add to the heating system in the houses. Are you familiar with that?
Mr. Wilkinson: Yes.
Senator Adams: The system is piped in with copper pipes?
Mr. Wilkinson: Yes.
Senator Adams: You are talking about $40,000 to install a system. My water use would have to be cut into because the solar energy and the sun are not operating. Do you have any idea of by what per cent? It might cut down the hot water heater, mostly up to about 3,000 watts. It costs quite a bit to heat that through electricity. Do you have any idea by what percentage you can cut your costs?
Mr. Wilkinson: About 65 per cent. Obviously, it will not work when you are in 24 hours of darkness.
Senator Adams: Even today, we have daylight hours where I live in Rankin. Daylight starts at about nine in the morning, and it gets dark around four o'clock.
We studied wind-generated power before. If I were to invest money in putting some wind-generated power into the community, do you have any idea of how many years it would take to recover the investment? Today we have one 60- kilowatt wind generator in Rankin.
I was in Montreal about a month ago. I talked to a person who had installed the 60-kilowatt one in Rankin, and in one year, it reduced consumption by 140,000-kilowatts. I was told the cost to put up the 60-kilowatt generator was about $100,000. If I were charging 45 cents a kilowatt, maybe I could make money at it. How many years does it take to recover the investment?
Mr. Carten: Two years. The payback is staggering.
Senator Adams: Our committee was told about 10 years ago that it would take 20 years.
The Nunavut Power Corporation does not pay for kilowatt hours.
Mr. Carten: They do not pay the retail rate.
Senator Adams: They pay a percentage. If the generator costs a certain amount in a year, and if you cut down 10 per cent in a year, they pay you the 10 per cent. That is the system in the Nunavut Power Corporation. Two years is not bad for the cost of the windmill.
The Deputy Chairman: You have to get your business investment going right away.
[Translation]
Senator Lavigne: You maintain that home water heating and electricity bills will be cut by 65 per cent. Correct?
Mr. Wilkinson: Water heating charges will be lower.
Senator Lavigne: Which means that I can install my water heating system directly next to my home heating system?
Mr. Wilkinson: Yes, but we are talking here about two different systems, one to heat water, and one to heat the home.
Senator Lavigne: If my annual home heating bill is $5,000, are you saying that I stand to save 65 per cent of that amount?
Mr. Wilkinson: No. If you look at the chart, you will note that a water heater accounts for approximately 14 to 16 per cent of a home's overall energy charges. A solar energy system can result in savings of 65 per cent, bringing the figure down to between 7 and 8 per cent of a home's overall charges.
Senator Lavigne: If a photovoltaic cell system for the average home costs $40,000, how long would it take to recoup the initial investment?
[English]
Mr. Carten: It is a complex question, but I understand why you ask.
Senator Lavigne: I want to know how many years it will take to get my money back.
Mr. Carten: It depends on your electricity price. You are displacing electricity. If you are paying 11 cents —
Senator Lavigne: You know how much it costs for electricity today from Hydro-Québec.
Mr. Carten: In Nunavut, it costs 45 cents. In Alberta, it costs 10 or 11 cents. There are variations in costs. In Quebec, it is seven cents.
Senator Lavigne: What would it cost in Quebec if I put a solar system on my roof?
Mr. Carten: It would take probably 10 to 12 years to give you a payback. Mr. Wilkinson made an important point.
How many years does it take to pay back a hydro project at those prices? How many years does it take to pay back a nuclear project at those prices? We have a regulatory system that allows those projects to be financed by the public purpose through the rate base. Because solar is a human technology and based on individual ownership, if you and I use it, we have to pay it back ourselves over seven or eight years, whereas companies are allowed to pay it back over 25 years. That is the disconnect, and the government can play a role in bridging that.
[Translation]
Senator Lavigne: What is the life expectancy of a solar water heating system?
Mr. Wilkinson: The system comes with a ten-year legal warranty.
Senator Lavigne: You say it comes with a warranty?
Mr. Wilkinson: The solar panels come with a warranty. I would imagine that they have an estimated life expectancy of 20 or 25 years.
Senator Lavigne: Are the panels sheathed in either aluminum or copper?
Mr. Wilkinson: Yes. As with any conventional water heating system, the only system component that will need to be replaced is the tank and that would need to be done every five to ten years.
Senator Lavigne: The life expectancy is between 10 and 15 years.
Mr. Wilkinson: The same as for a conventional system. The components of a solar-powered water heating system are designed to last 20 or 25 years.
[English]
Senator Gustafson: This might be self-serving, but in Estevan, Saskatchewan, we have coal that emits fewer gases than most kinds of coal. Saskatchewan would seem to be an ideal place for solar energy because of the available sunlight. I have only that comment.
Senator Finnerty: Are provincial utilities and regulators generally supportive of solar energy systems? Do they allow for net metering?
Mr. Wilkinson: If you have a free moment later on today you might want to come back and see a presentation about what B.C. Hydro is doing, because it is a model for the rest of the country. I have a standing application with Hydro- Québec to install a grid system on my house. It will cost me, in paperwork, about $4,000. It will cost another $5,000 for the same bi-directional metre that B.C. Hydro will install for free. Those costs are over and above the cost of the equipment.
Mr. Carten: Generally, the utilities have resisted the change, to a greater or lesser degree. Utilities such as B.C. Hydro and Detroit Edison in the United States have embraced the change. On balance you could say that the utilities have resisted it. In part, that is because they no longer own the power generation; it is owned by the average person. Therefore that generation is now being fed into the system from outside. Historically, they have been used to a system that is owned internally. There is also the usual resistance of big companies to change, as much as anything else. For example, we have many debates on interconnect standards for interconnecting the solar power with the grid. They are doing it by the hundreds of thousands in Germany, California and New Jersey. Why we have to debate the subject is beyond me. The product we make is the interconnection, for which there is a highly sophisticated and detailed standard so that it will work in California. We can do the same thing in Canada without much smoke.
The Deputy Chairman: How can we get into the grid? Is it easy to do?
Mr. Carten: To make the technology to do it is difficult. It has been my hedge against wealth for a long time. It is a difficult to do well and efficiently at a low cost. The product exists and is essentially a consumer product, in that you put it in and it works. Our company's job is to make what is inside work so that you can simply plug it in. It is easy to do.
The Deputy Chairman: B.C. Hydro can offer this service for free, but in Ontario, Quebec or Atlantic Canada, you will pay an arm and a leg. Is that right?
Mr. Carten: It is the old mentality of the big utilities that find this whole shift in energy a big hassle. They would just as soon not have it happen. Around the world — and we may be the only country in the free world that does not have net metering — the utilities will buy back the electricity you produce at the retail price. In Canada, they want to buy it back at the wholesale price. B.C. Hydro has gone to the net metering system and Ontario is beginning to use it. That is the bedrock for solar power for the generation of electricity.
Senator Christensen: Are not the power corporations and the provinces dependent on their ability to expand? In B.C. they are having problems because most of their energy is hydro and they do not have that ability. They are trying to reduce usage and so they encourage people to use alternate energy sources. In Quebec, availability of hydro is vast and at very low cost, and so they want to use as much as possible.
Mr. Carten: That is one part of it. Another part that is almost more important speaks to the issue of brownout. The serious issue facing the electrical industry in Central Canada and in the U.S. is the grid infrastructure. We are increasing the use of electricity each year by 4 per cent to 5 per cent, compounded. The grid is old and rickety. When you push more power down the system in one direction, it blows up. That is what happened last summer. Solar power takes the pressure off the grid. It is partly an absence of generating capacity, but it is largely the absence of transmission capacity. Solar energy technology can take the pressure off the grid and save a ton of money in terms of how much has to be invested in it.
Mr. Wilkinson: In Montreal over the last year or so there was quite a debate about the construction of a 750- megawatt cogeneration plant not too far, as the crow flies, from my house. The plant that Hydro-Québec wanted to build was needed because they were unable to build hydroelectric dams within a short time. Thus, their option was to buy a large plant from GE that could produce the equivalent of 630,000 Honda Civics idling 24-hours per day, 365 days per year, in the southwest corner of Montreal. This is the kind of situation that many major centres in North America are looking at. We do not expect solar or wind to be the complete answer; this is not cold fusion. In respect of energy efficiency to reduce requirements and the use of renewables to supplement peak demand, solar marries well with the peak demand across this country. We can offset the need for producing new capacity. We are seeing more and more energy-efficient appliances in the marketplace. While the demand is increasing, we are seeing some efficiencies because people are replacing old appliances. Nonetheless, as Mr. Carten pointed out, there is a compounded growth in demand for energy. This morning we are asking senators to carry this message further. With government support, we could actually make a solid contribution to the energy requirement.
We are not here to say "no more oil." We are saying, "Let's try to reduce in a practical and cost-effective manner."
The Deputy Chairman: I have one last question. Do you have a national group? Do you have a national organization that represents all of you who deal with solar energy? Have you made representations to the government about the necessity of solar power and what you have told us here today?
Mr. Carten: We have written to ministers, yes.
The answer to both questions is yes. We have the Canadian Solar Industries Association, which has its annual conference here in Ottawa this week. We are using this opportunity to raise the consciousness of legislators such as you about this industry, about the technology and its value, so we can get more support. Other ministries have their constituencies as well, such as the oil industry, so we are in fact working with as many people as we possibly can to help them understand the value of the industry and the technologies.
The Deputy Chairman: Thank you very much.
Senator Adams: I want to come back to the question of the subsidy.
You are saying the government does not have a policy as to whether or not it will continue to help people to try to cut the costs of energy. Where I live, the Nunavut Power Corporation is losing millions of dollars a year. If you are to continue to find more efficiencies to cut energy consumption, do you think the government should have a policy? In that way, you will not be facing bankruptcies in the future. Should there be a continuing policy?
Mr. Carten: One of the key recommendations of the policy is a strategy.
Senator Finnerty: I think an effort has to be made to inform the public and help them to understand the savings they can achieve by going this route. Back in the 1980s, we saved a great deal on our indoor swimming pool by putting the panels on our roof. When you move away and buy another house, you forget.
We have to bring it back into focus. Perhaps we should have the minister here to discuss it with him.
The Deputy Chairman: We will have Minister Dion.
As chair, I want to thank you. This has been very interesting. You have made us put our thinking caps on, which is important as well. We will direct some of the questions on solar energy to the minister. I will relay everything to the chair of the committee when he returns.
Thank you so much.
The committee adjourned.