Agenda

Developing a Solar Hot Water Deployment ProgramLessons From the Toronto Solar Neighbourhoods Initiative

April 28, 2010 - Rob McMonagle, Toronto Atmospheric Fund

Agenda

Toronto’s Interest in Solar Solar Neighbourhoods Backgrounder Overcoming the Regulatory

Challenges Learning by Doing

– Cost of Solar– Marketing– Opportunities

Toronto Solar Neighbourhoods Initiative

The Reason to Go Solar (Toronto’s Perspective)

Why Toronto is Going Solar?

The main drivers– Climate Change– The Local Economy

Reduce our energy dollar outflow

Local job creation

Climate Change will Increase the Number of Hot Days in Toronto

1. A Scan of Climate Change Impacts on Toronto – Clean Air Partnership

Energy Usage in Toronto(70% Natural Gas and Growing)

Total energy consumption = 72,000,000,000 kWh/year Note: Deep Lake Water Cooling provides 89,000,000 kWh/year (0.1% of total)

Electricity

Natural Gas

City of Toronto

City of Toronto

Nuclear

Hydro

Coal

Natural Gas

Residential Hot Water’s Role in CO2 Reductions

It is the single largest reducer of CO2 that a homeowner can make – Plus it is highly visible (unlike

caulking or weather-stripping)– Homeowners want to be seen as

Green – solar is the new BMW in the driveway

SDHW Systems can provide 0.4 – 0.7 t CO2/year reduction in Toronto (but more in high carbon energy jurisdictions)– Over system life

(20 years) = 8 - 15 t CO2

Lifetime GHG Reductions

-

5

10

15

20

25

30

35

TorontoElectricity

TorontoNatural Gas

PEI Electricity PEI Oil

C)2

(to

nn

es)

Red

uce

d

How Much is Toronto Spending on Energy? (A: $4.5 billion per year)and where it goes…

Natural Gas$1,760,000,00

Dividends from Energy Firms

$???

Electricity$2,690,000,000

Spent by Energy Utilities in Toronto

$???

Head offices of Energy Firms$???

City of Toronto (corporate) Energy Bill (2005):

$232,000,000

Toronto Energy Bill (2005): $1,700/capita

Economic Considerations on Local Deployment of Solar Every GJ/kWh saved by solar (and other

renewables) reduces the outflow of energy dollars from the local economy

Solar water heating employees 10xs as many workers per energy unit than the fossil fuel industry – and the jobs are in the local economy

And... – Will solar prices go up or down in the future?– Will fossil fuel prices go up or down in the future?


Solar Neighbours and Neighbourhoods

Toronto’s Community Solar Initiative

Prior to 2007 30-50 systems were installed in Toronto annually (without building permits)

Action item from the Climate Change Plan (2007): “develop a pilot residential solar domestic hot water program”

The Toronto Solar Neighbourhoods Initiative was developed to identify challenges and support barrier resolutions

Target of 100 system sales in one neighbourhood

Why “Neighbourhood” Solar?

Early adoption needs high profile– Focusing on one

community allows us to allocate the resources needed to build that profile

– “A solar system on every street”

Need to get the comfort level up of homeowners – “No – you’re not alone”

Get the community involved– Take advantage of social

marketing

Residential Systems Sold in Canada

Based on annual survey by NRCan sales of residential systems now about 800-1,200 systems per year

Solar Neighbourhoods (2009) – 100 systems in one ward– It this was replicated across Toronto – 4,000 systems/year– But using Austrian levels of installation – 2,200 installed in just the

one ward and 90,000 in Toronto!

Residential SDHW Sales in Canada

-

200

400

600

800

1,000

1,200

1,400

2003 2004 2005 2006 2007 2008

No

. o

f S

yste

ms

Toronto Solar Neighbourhoods Pilot– the Highest Density of SDHW Systems in Canada

Canadian Financial Support for Solar Hot Water has been Growing

Support has grown rapidly over the past two years.– In 2008 total was $500– Peaked May-Dec 2010 at

$4,400 However, there has been

a dramatic reversal in last few months with the cancellation of the ecoENERGY for Homes program

Average SDHW system cost (during SN program)

$8,000

Solar Neighbourhoods incentive (Toronto only – program now over)

-$1,000

Home Renovation Tax Credit (ended Feb. 1, 2010)

-$900

Federal ecoENERGY rebate

-$1,250

Ontario Home Energy Savings rebate

-$1,250

Total support for early market transformation

$4,400

Costs after discounts and rebates

$3,600

Costs after incentives financed at 0% over 10 years

$30.00 per month

Government Support is now Uncertain

Government Support for SDHW in Toronto

$0$500

$1,000$1,500$2,000$2,500$3,000$3,500$4,000$4,500$5,000

3/1

/20

07

6/1

/20

07

9/1

/20

07

12

/1/2

00

7

3/1

/20

08

6/1

/20

08

9/1

/20

08

12

/1/2

00

8

3/1

/20

09

6/1

/20

09

9/1

/20

09

12

/1/2

00

9

3/1

/20

10

Balance

Apr-07 $500 $500 Solar put into ecoENERGY program

Mar-08 $500 $1000 Province matches

May-08 $1,000 $2,000 SN program

Mar-09 $1,500 $3,500 ecoENERGY program increase

Jan-09 $900 $4,400 Home Renovation Tax Credit

Dec-09 -$1,000 $3,400 SN support ends

Feb-10 -$900 $2,500 HRTC ends

Apr-10 -$1,250 $1,250ecoENERGY program ends - uncertain

about provincial support


Overcoming the Regulatory Barriers

Regulatory Challenges of Solar

Solar industry has been operating outside the regulatory framework

The small size of the solar industry has kept it from adequately reviewing and advocating for regulatory changes

Regulatory challenges have kept the industry underground doing “guerrilla solar” since the 1980s Lack of solar issue knowledge in regulatory sector agencies plus an industry that has not self advocated for regulatory changes until recently

Regulatory SolutionsIssue Resolution Date Savings

1. Cost of Building Permit Reduced from $400 to $98 (minimum charge)

August 2008

$300

2. CSA Certification expensive, long delays and does not show conformance to the OBC

Toronto develops Certified Plan process

January 2009

$60,000 or $2,000 for engineer’s drawings each site

3. Installation to conform to CSA F383

Toronto accepts use of CanSIA certified installers

January 2009

$1,000 engineer’s site report

4. Building Permit Process Toronto Simplifies and makes consistent

May 2009

Up to 20 hours

5. Roof Structural Concerns

Toronto develops a simple 3-step process

May 2009

$1,000 (cost of a engineer’s roof inspection)

6. Verification installation to codes and standards

Toronto develops an inspector’s check list

November 2009

7. Backflow Prevention Changes to the OBC clarifies requirements

January 2010

$500

8. Exemption to municipal bylaws (i.e. Zoning)

Ont. Reg 10/15 – Green Energy Act

February 2010

Up to 4-6 hours

Toronto’s Solar Documents

The Cost of Regulatory Compliance in Toronto - Before

Item Cost Contractor Time

Engineer Stamped Drawings, Mechanical and Structural

$700 - $2,000Done by a P.Eng – Done for

each installation by contractor

?

Building Permit Application $400 2-3 hrs

Roof Structure Report $600- $1,000Done be a structural engineer

?? Hr

Backflow Preventor (RP type) $125 + $150 Certified Backflow Preventor test

2 hr

Thermal Expansion Device $125

Site inspection (with Toronto Building inspector)

?? hrs

Total $2,100 ???

The Cost of Regulatory Compliance in Toronto - Now

Item Cost Contractor Time

Certified Plan development $700 - $2,000Done by a P.Eng - Only done

once Should be done by

manufacturer

?

Building Permit Application $96 2-3 hrs

Roof Structure Report 1 hr

Backflow Preventor (DCAP type) $25

Thermal Expansion Device $25 (TER valve used instead of an expansion tank)

Site inspection (with Toronto Building inspector)

2 hrs

Total $150 5-6 hrs

Toronto Building is getting Better at Issuing Building Permits

Days to Issue Building Permit

0

20

40

60

80

100

120

28-Mar-09

17-May-09

6-Jul-09 25-Aug-09

14-Oct-09 3-Dec-09 22-Jan-10


Learning from the Neighbours

What is the Price of a System?

Sloped Flat

Average $8,291 $9,401

Highest $10,896 $13,239

Lowest $7,601 $7,560

Project Cost (vs. Roof Type)

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

A B C D E F G H

Sloped

Flat

Contractor

How Should Governments Support SDHW Sales?

Offered 2 options:– Interest Free Loan

10 years, <$10,000 no down payment

– $1,000 up front support

Paid to contractor “No waiting”

70% took the loan

Support Mechanism Choosen

0

10

20

30

40

50

60

Loan Rebate

Overcoming the “1st on the Block” Syndrome

36% of sales occurred in clusters of 2, 3 or 4 projects on the same block

Important Factors in Selecting a Contractor

Drivers to Purchasing a System

How Can Low NG Prices be Good for SDHW Deployment?

Natural Gas Price of Enbridge (Monthly average)

25.0030.0035.0040.0045.0050.0055.0060.0065.00

Jan-2000

Jan-2001

Jan-2002

Jan-2003

Jan-2004

Jan-2005

Jan-2006

Jan-2007

Jan-2008

Jan-2009

c/m

3

It’s Now Cheaper to Heat Water with Electricity

Potential of fuel switching to electricity This moves SDHW into electrical load

displacement

Cost of Heating Water

0100200300400500600

NG (2009price 38.94

c/m3)

off-peak half off-peak& half mid-

peak

mid-peak 42% off-peak/ 33%mid-

peak /25%on-peak

NG(2006price 52.84

c/m3)

$/ho

useh

old/

year

Early Learnings for Solar Neighbourhood Pilot is now complete Report is now being

prepared along with recommendations

Key learnings on:– Regulatory challenges– Building industry capacity– Marketing

Report Available early June

City of TorontoContacts

Rob McMonagle SolarCity Program ManagerToronto Atmospheric Fund

[email protected]

Solar Neighbourhoods Information Line

416-393-6370 www.solarneighbourhoods.ca

Solar Permitswww.SolarPermits.ca