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Efficiency Manitoba must decide on popular solar program

MIKE DEAL / WINNIPEG FREE PRESS files</p><p>Alex Stuart is co-founder of Solar Manitoba, a firm active in the alternative energy industry.</p>


Alex Stuart is co-founder of Solar Manitoba, a firm active in the alternative energy industry.

Hey there, time traveller!
This article was published 24/4/2018 (808 days ago), so information in it may no longer be current.

As Manitoba Hydro organizes the transition from Power Smart to Efficiency Manitoba, it could be that one of the most pleasant decisions officials will have to make is whether to extend the solar power program.

The two-year-old rebate program for installing solar panels is coming to end April 30.

The takeup has far exceeded what Manitoba Hydro had originally anticipated when it set up the program that provides a $1-per-watt rebate, or about 25 per cent of the cost of a solar photovoltaic system.

Hydro spokesman Bruce Owen said Efficiency Manitoba, the soon-to-be created Crown corporation, must decide what it wants to do with the program that has been credited with kick-starting the solar energy industry in Manitoba.

"It is the best solar rebate program in the country," said Justin Phillips, the president of Solar Manitoba, a company that had been active in the alternative energy industry since 2008, and has grown exponentially over the past two years thanks to the solar power program.

"We like to say we are an overnight success 10 years in the making," he said.

The program rules call for all the installations to be complete by the end of March 2019. With 200 jobs still on the books for Solar Manitoba alone, Phillips said Manitoba Hydro might have to be a little flexible on the completion dates — or speed up the permitting approval process.

Since Manitobans have enjoyed the second-lowest electricity rates in North America for many years, it is not so surprising that this was not a hotbed of activity in the solar-energy scene.

But the introduction of the rebate in the spring of 2016 came at a time when prices for solar panels had been falling steadily, making the economics of such an investment more attractive.

Then, last year came the news that Manitoba Hydro would be applying for 7.9 per cent annual rate increases for several years to come. While it’s unlikely the regulators will approve such dramatic increases, it has made it clear to many that electricity rates are rising.

Ken Klassen, a Winnipeg-based independent contractor in the alternative energy business who does most of his work overseas, said even if people are not sure it makes financial sense now, there are cost-effective ways to do new home or building construction to make it easier to install solar in the future.

"I have been in the business 30 years, including on the government side — and when programs come and go it can be disruptive to industry," he said.

"But this time it could be different. The cost of solar panels, unlike programs for other technologies in the past, continue to decline. So it (the end of the solar power program) may create a temporary setback to the local market, but only temporary because of the inexorable decline in cost of solar panels."

For instance, he said, the costs of solar technology in Germany — where living expenses are generally higher than Canada, but where there is a highly developed alternative energy business — are such that installation is much cheaper than in Canada.

When Phillips’ company first got in the business in 2009, it cost about $10 per watt of installation; that’s down to $2 per watt now.

Phillips is not concerned the end of the rebate program will affect his business. Solar Manitoba has recently moved to a larger facility and just hired its 28th employee.

The company, the largest in the solar industry in the province, now is active elsewhere in the country and has recently acquired licences for novel alternative energy technologies.

Phillips said even if prices do not come down — and he, for one, believes they may be starting to level out — the attraction of locking in electricity costs for the 30-year lifespan of the equipment is starting to make sense to more people.

"The levellized cost of electricity over the 30-year life cycle is less than what people are paying for Hydro now," he said.

Phillips figures the solar costs would range from 3.5 to six cents per kilowatt hour compared to the 8.1 cents people are paying now. He says the rough estimate is that it would take a commercial install about eight to 10 years to pay for itself and 15 to 16 years for a residential installation.

Owen said that about 80 per cent of the new solar installations over the past two years have been in rural Manitoba and Wayne Clayton, chairman of Manitoba Sustainable Energy Association, said demand will grow among rural and in particular agricultural producers, for whom it could be advantageous to be able to power up operations that are off the electricity grid.

"There are some logistics that people will have to work out around that, but if farmers or a business has a place where they could use solar where they do not even need to have a Manitoba Hydro connection, that might be an option," Clayton said.


Martin Cash

Martin Cash

Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.

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