How Might the Coming Energy Transition Look?

Coal is no longer the “go to” fuel for new electricity generation. The pollution and carbon dioxide emissions associated with burning coal are just too high. As coal plants in Alberta reach the end of their economic life, they are being replaced by plants fuelled with natural gas.

But hold on. Other factors are also at play. Large wind farms have become competitive. A recent auction conducted by the Alberta government set all time low prices for renewable wind energy that is giving both coal and natural gas a run for their money.

And who knew? People like to make decisions for themselves. Knowledgeable electricity consumers know they have choices. They can even become their own producers of electricity by installing solar panels on their home or business. Some are starting to flex these muscles in the market place. The number of consumers making the switch to solar has grown steadily from a tiny trickle. What might be a tipping point that turns those numbers into a mainstream?

A few barriers stand in the way including:

  1. Rooftop solar is installed on racks placed on top of roof shingles. When the shingles have to be replaced, the entire solar array has to be dismantled (then re-installed), adding cost and disruption.
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  3. The costs of panels have dropped dramatically. However, installation costs still need addressing.
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  5. Cash to purchase a system can be hard to come by. Mortgage and other innovative financing is often needed.

 
A solution to help address these specific barriers is in place in Europe and is now available in Canada.

One can install a framing system directly onto the sub-roof of a building. Standard solar panels can then be fitted and fixed within the frames. Together, the solar panels and the frames turn into the roof envelope. The ingenuity of this solution is that it appears to address each of the key barriers:

  1. The solar array becomes the roof. The shingles are replaced by exceptionally durable solar panels and frames. Once installed, the rooftop system will generate electricity and protect the building underneath for many, many years.
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  3. Combining two jobs – roofing and solar installation – into one will reduce costs. If the frames and solar panels can be sold in standardized kits, costs will drop even more.
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  5. A solar roof, integrated into a building, can be eligible for mortgage financing and mortgage insurance reductions. As well, the PACE (Property Assessed Clean Energy) Program will be available in Alberta when municipalities take advantage of the new legislation. Under PACE, solar financing costs are attached to the property, similar to a local assessment charge, and repaid to the municipality over an extended period of time. With either financing, monthly payments are affordable with savings coming from electricity bills.

 
Transitions in society can sometimes take a long period of time to materialize. However, when a tipping point is reached, a transition can move with unexpected speed. It all depends on how widely and quickly the benefits of the transition can be experienced.

Big coal for large scale electricity is on its way out. Much more nimble and cost effective natural gas generation will fill much of that gap.

However, don’t count out renewable energy. When homeowners can affordably generate solar electricity for themselves, watch out. Solar roofs will be popping up all over Alberta.

As technology innovations enable costs to drop, the transition may happen more quickly than anyone expects.

Bob Hawkesworth
Senior Advisor

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