Solar power companies coping with slow burn
Province’s green energy regime leaves equipment makers struggling
Don’t be fooled by the civilized demeanour displayed by executives of Ontario’s biggest solar energy equipment makers, an industry conference was told Wednesday.
“We seem to be amicable as we’re sitting here, but we’re trying to poison each other’s coffee as soon as we get out of the room,” Martin Pochtaruk of Heliene Canada told the Ontario Feed-in Tariff Forum.
The audience laughed. His fellow panellists — all competitors in the solar energy equipment business — smiled grimly.
To a man (the renewable energy business remains a guy’s world), panellists agreed that making solar equipment in Ontario is a struggle.
Current manufacturing capacity in the province for solar panels is about 10 times annual demand.
And although the Green Energy Act requires projects to meet high Canadian content rules to qualify for premium feed-in tariff rates, Paco Caudet of Siliken Canada produced Statistics Canada figures showing the value of solar panels imported from China jumped from $24 million in 2009 to $323 million last year. The fact that those panels have been installed on projects under programs predating the 2009 feedin tariff program comes as small consolation to manufacturers who’ve had to trim staff from their operations. Pochtaruk, for example, said his company’s solar panel plant in Sault Ste. Marie is down to 40 employees from a high of over 70. “We’re all hoping for the market to surprise us with a tsunami of orders, but it has not happened and it’s not going to happen,” he said. “We do have positive net income each month,” he said. “Does that pay the investment we have made? Certainly not, and my wife reminds me of that every evening.” A slow project approval process and difficulties in getting financing have contributed to the slow pace of development, he said. No one disagreed. “Everybody agrees there is an oversupply in the market right now,” said Manish Nayar of Oya Solar. The Green Energy Act was supposed to kick-start a new manufacturing sector in Ontario, providing a home market for makers of solar, wind and bioenergy equipment who could then expand into export markets. But the panellists — who estimate their companies have collectively invested $200 million in Ontario facilities — agreed progress has been painfully slow.
They’re expecting an uptick in demand in the latter half of this year, but that excites no one.
“It could only be better than last year,” Caudet said, before adding grimly: “Well, they could kill the program.
“But it is below everybody’s expectation of what the market could bring.”
Panellists said the Ontario Power Authority has been slow to grant approvals for solar projects.
When approvals do come through, they complained, they come in big batches, leading to a frantic burst of activity followed by a sudden drop-off.
Paolo Maccario of Silfab said Germany is often held up as an example of a green energy powerhouse that Ontario should emulate.
But he said the scale of green energy development in Germany is far beyond anything in Ontario.
And he said if Canada’s most populated province wants to grow an export market for green energy companies, it has to pay more attention to developing new or improved products.
The province will never be a lowcost manufacturer, he said.
“You need to work on innovation; you need to work on products that nobody else can produce.”