Wednesday, March 10, 2010

Solar Thermal in Canada - Impact of the Canadian Government Budget of 2010

The Federal government will let a popular solar thermal incentive program (EcoEnergy for Renewable Heat) expire this year, except it will continue to provide support for small residential solar hot water systems (a $1250 grant per system). This is mostly bad news for solar thermal manufacturers in Canada. This is obscure, as the majority of solar thermal manufacturers in this country focus on non residential systems, such as EnerWorks, an Ontario based manufacturer of glazed solar thermal collectors. For the most part the small residential solar hot water systems are thermo-siphon/glass tube collectors that are manufactured in China. Thus, this budget decision essentially favours the non-domestic manufacturers. It also ends an important market for commercial and larger scale solar thermal applications, such as the promising solar for process heat (commercial uses of heat) and the "killer app" for solar thermal, using solar heat to drive chilling equipment (solar air conditioning). This, in combination with the Federal governments inaction on CO2 (Carbon) legislation has put a huge dent in this industry.

Thus in summary, the 2010 Canadian Federal Budget will not renew funding for the EcoEnergy for Renewable Heat program, which will expire in 1 year and whose budget is now largely expired. Without provincial level programs commercial/industrial solar thermal in Canada will disappear, particularly as natural gas prices (which solar thermal substitutes) continues to be depressed.

Moving forward, solar thermal companies in Canada will have to focus on residential solar hot water products. There is no requirement for domestic manufacturing, so the only barrier to this market is for a company to achieve CSA 378 certification (a Canada specific certification).