Economic Impacts of The Solar Photovoltaic Sector in Ontario 2008-2018 July 26 0

EconomicImpactsoftheSolarPV
SectorinOntario20082018
July,2011
PreparedbyClearSkyAdvisorsInc.
ClearSkyAdvisorsInc.2011
Disclaimer
The materials ClearSky Advisors Inc. (ClearSky Advisors) provides will reflect ClearSky Advisors judgment
based upon the information available to ClearSky Advisors. ClearSky Advisors disclaims any other
representations or warranties, express or implied, including without limitation any implied warranties of
merchantability, fitness for a particular purpose or noninfringement. This report is based on sources
believedtobereliable,butnoindependentverificationhasbeenmadenorisitsaccuracyorcompleteness
guaranteed.ClearSkyAdvisorsisanindependentresearchfirmthatdoesandseekstodobusinesswithall
stakeholders within the industries covered in ClearSky Advisors research. Investors and decisionmakers
shouldconsiderClearSkyAdvisorsresearchasonlyasinglefactorinmakingtheirkeydecisions.
TheEconomicImpactsoftheSolarPhotovoltaicSectorinOntario20082018,2011ClearSkyAdvisorsInc.
TableofContents
ExecutiveSummary........................................................................................................................ 3
1.Introduction ............................................................................................................................... 7
2.Investment ................................................................................................................................ 9
3.JobCreation ............................................................................................................................. 15
4.ElectricityCustomerImpacts....................................................................................................21
5.CostPremiumvs.JobCreation.................................................................................................25
Glossary........................................................................................................................................26
Appendices...................................................................................................................................28
TableofFigures ............................................................................................................................ 36
Bibliography .................................................................................................................................37
ExecutiveSummary
ElectricitysupplyinOntariowillundergosignificantchangesoverthenext20years.Thesechangeswillbe
driven by the need to replace and/or refurbish existing electricity generating facilities as well as by rising
electricitydemand.
By2030,almost70%ofrequiredelectricitygenerationwillneedtocomefromneworrefurbished
electricitygeneratingfacilities
Despiteconservationefforts,demandforelectricityisexpectedtoincreaseby15%from20102030
Toprepareforthesechanges,theprovincehasdevelopedaLongTermEnergyPlan(LTEP)fortheperiodof
20102030.By2030,theLTEPcallsforthevastmajorityofelectricitygenerationinOntariotocomefrom
nuclear power (46%), hydroelectricity (20%), wind (10%), and natural gas (7%), and for conservation
measures to reduce demand by 14%. The solar photovoltaic (PV) industry is set to add to that mix an
expected1.5%oftotalgenerationby2030.
TomeettargetslaidoutintheLTEP,ClearSkyAdvisorsexpectsthatapproximately3,000MWdcofsolarPV
will be installed and operational in Ontario by 2018. This report examines a number of the economic
outcomesthatwouldarisefromthatlevelofmarketactivity.
Specifically, the report provides analysis of: (1) private sector investment, (2) job creation, and (3) cost to
Ontarioelectricitycustomers.
EconomicImpactsofSolarPVinOntario
In2011
20082018
PrivateSectorInvestment
$2billion
$12.9billion
JobCreation
8,200
74,000
MarginalMonthlyCostofSolarPVtoAverageOntarioElectricityCustomer
$1.42
$4.91(in2018)
MarginalCostofSolarPVasaPercentofAverageMonthlyElectricityBill
1.1%
3.0%
KeyFindings
OntariosSolarPVIndustryToday
OntarioiscurrentlyaleadingjurisdictionforsolarPVinNorthAmerica.
In2010,OntariorankedsecondforsolarPVinstallationsamongstUSstatesandCanadianprovinces
andterritories(167MWdc)
TheprovinceisexpectedtoremainthesecondlargestsolarPVmarketinNorthAmericain2011
Bytheendof2011therewillbemorethantwodozensolarPVmoduleandinvertermanufacturers
intheprovince
Jobs are measured in PersonYears of Employment (PYE). One PYE equals 40 hours of employment a week for a
periodof52weeks.
PrivateSectorInvestment
Ontarios Feedin Tariff (FIT) program and Renewable Energy Standard Offer Program (RESOP) have
attractedsignificantprivatesectorinvestmentinsolarPVfacilitiesbyguaranteeingafixedpaymentforeach
kWhofelectricitythesefacilitiesproduce.
By2018,OntariossolarPVmarketisexpectedtodrive$12.9billionoftotalprivateinvestment
Between$4.1$7.9billionoftotalprivateinvestmentwillbespentinOntario
$Millions
Ontario'sPVMarket:TotalInvestment(20082018)
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
HighCase
ExpectedCase
LowCase
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
JobCreation
Incomparisontolargecentralizedelectricitygenerationfacilities,alargerportionofeverydollarspenton
solarPVgoestowardslabour.Primarily,thesolarPVindustrycreatesjobsinoperationsandmaintenance,
constructionlabour,warehousinganddistribution,andmanufacturing.
OntariossolarPVindustryissettodrivesignificantjobcreationintheprovince.
In 2011, the provinces solar PV industry will provide the equivalent of 8,200 fulltime jobs2 in
Ontario
In2012,thatnumberwillgrowtoover11,400fulltimejobs
By2018,OntariossolarPVindustryisexpectedtohavecreatedover74,000jobs
SolarPVwillresultinanaverageofapproximately25jobsinOntarioperinstalledMW3
Jobs are measured in PersonYears of Employment (PYE). One PYE equals 40 hours of employment a week for a
periodof52weeks.
3
ThisnumberincludesalldirectandindirectjobsthatwillresultfromtheOntarioPVmarketbetween20082018
JobCreaBonperGWhProduced
SolarPV
Wind
SmallHydro
Biomass
Nuclear
NaturalGas
Coal
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
JobsCreated
Perunitofelectricitygeneration,solarPVcreates11timesmorejobsthannaturalgasorcoal
Perdollarspentonelectricitygeneration,solarPVcreates4.85.3timesmorejobsthannaturalgas
orcoal
CosttoElectricityCustomers
Overthecomingyears,electricitycustomersinOntariowillfaceincreasedcostsforanumberofreasons.A
smallpercentageofthesecostincreaseswillbeduetosolarPV.
It is expected that, from 20112018, solar PV will add 70 cents per year to the average Ontario
electricitycustomersaveragemonthlybill,comparedwithlikelyalternatives
By2018,thecostofaddingsolarPVtotheelectricitysupplywillamountto$4.91permonthforthe
averageOntarioelectricitycustomer,or3%oftheirmonthlyelectricitybill
ExpectedAverageMonthlyHouseholdElectricityBill:
SolarPVvs.NaturalGas
AverageCostperMonth
$200
$150
$100
$50
$
2011
2012
OtherElectricityBillCosts
2013
2014
CostofSolarPVGeneraUon
2015
2016
2017
2018
CostofNaturalGastoReplaceSolarPVGeneraUon
Methodology
PrimarydataforthisresearchwascollectedthroughinterviewsandsurveyswithawiderangeofsolarPV
industry stakeholders. Intotal, ClearSky Advisorsconducted over150indepth interviews andcompleted
nearly100surveys.Overall,weinterviewed:
largeandsmallprojectdevelopers,representing87%oftheMWvolumeofexecutedFITcontracts
modulemanufacturersthatrepresent89%ofexpectedmoduleproductioncapacityinOntario
invertermanufacturersthatrepresent85%ofexpectedinverterproductioncapacityinOntario
Extensivesecondaryresearchwasalsoundertakentosupportourfindings.
Forecastsforinvestment,jobcreationandelectricitycustomerimpactweregeneratedthroughaClearSky
Advisors model that incorporates established and recognized 3rd party tools (e.g. Jobs and Economic
Development Impact Model PV1.10.03) with inhouse modelling. Wherever possible, inputs were taken
fromofficialandtrusted3rdpartysourcessuchas:OPA,MinistryofEnergy,peerreviewedjournals,etc.
Note:Formoreinformationonourapproach,pleaseseeAppendixA
1.Introduction
Background
Thetechnologiesandapplicationsusedtogenerateourelectricityhavearangeofimpacts.Theyaffectour
economy, our health, our environment, and our local innovation. For example, investment in coal creates
cheap electricity but has expensive health and environmental impacts. On the other hand, investment in
solarPVcreatespremiumpricedelectricitybutalsosupportsahighleveloflocalspending,jobcreation,and
innovation.Adifferentbalancebetweencostsandbenefitsexistsforeachtypeofpowergeneration.
Thequestionofwhatvaluecanbeexpectedfromvariousinvestmentsinelectricityinfrastructureshouldbe
ofparticularinteresttoOntarians.Inordertomeetelectricitydemandin2030,Ontariowillneedtobuildor
refurbish70%4ofitselectricitysupplymix.Assuch,Ontariansandtheirgovernmenthavebigdecisionsto
makeaboutwhatkindofgenerationtheywishtosupportintheprovince.
ThisreporthasbeencommissionedbytheCanadianSolarIndustriesAssociation(CanSIA)toanalysesome
of the economic outcomes of increasing the proportion of solar photovoltaic (PV) generation in Ontarios
electricitysupplymix.Specifically,fortheperiodof20112018,CanSIAaskedustoquantify:
(1) totalinvestmentandlocalspending
(2) jobcreationinOntario
(3) electricitycustomerimpacts.
TheLongTermEnergyPlan
OntarioreleasedaproposalforanupdatedLongTermEnergyPlan(LTEP)inthefallof2010.InFebruary,
2011theMinistryofEnergyissuedaSupplyMixDirectivebasedontheplanwhichtooktheLTEPonestep
closer to implementation. These documents chart a path for Ontarios future electricity supply mix (from
20102030)5.
TheLTEPandSupplyMixDirectivehavebothsetatargetof10,700MWofrenewablegeneration,excluding
hydroelectric,by2018.Similarly,theLTEPhascalledfor1.5%oftotalgenerationinOntariotocomefrom
solarPVby2030.ClearSkyAdvisorsexpectsthatmeetingbothofthesetargetswillrequireapproximately
3,000MWdcofsolarPVtobeinstalledinOntarioby2018.
Scenarios
Theanalysisinthisreporthasbeenconductedusingthreemarketscenariosfortheperiodof20112018.A
highleveldescriptionofourmarketforecastmaybefoundinAppendixB.

4
Ontario Power Authority. (2011). Integrated Power System Plan (IPSP) Planning and Consultation Overview. OPA;
OntarioMinistryofEnergy.(2010).Ontario'sLongTermEnergyPlan:BuildingourCleanEnergyFuture.Governmentof
Ontario
5
ForacostanalysisoftheLTEPandtheroleofsolarPVrolewithintheLTEPpleaseseeAppendixCCostoftheLong
TermEnergyPlan
Ourhighcasescenarioanticipates3,800MWdcofinstalledsolarPVby2018
o
ThiscouldoccurifsolarPVweretomakeupalargerthanexpectedshareofthe10,700MW
of renewables targeted in the LTEP or if Ontarios overall target for renewables were to
increasecomparedtothecurrentLTEP
Ourexpectedcasescenarioanticipates3,000MWdcofsolarinstalledby2018
o
ThiswouldoccurbasedontheLTEPstargetsforgenerationfromsolarPV(i.e.10,700MW
ofrenewablesby2018and1.5%oftotalelectricitygenerationby2030)
Ourlowcasescenarioanticipates2,000MWdcofsolarinstalledby2018
o
This could occur if solar PV were to make up a smaller than expected share of the 10,700
MWofrenewablestargetedintheLTEPorifOntariosoveralltargetforrenewableswereto
decreasecomparedtothecurrentLTEP
Note:Themodellingofthesescenariosincludesmanyvariables.Thestatementsabovedemonstrateonlyahigh
levelconceptualizationofeachscenario.FormoredetailsseeAppendixA.
Throughout this report, where only one set of outcomes is presented (i.e. for job creation and electricity
customer impacts) the findings are based on our expected case scenario which, in turn, is based on LTEP
targets.
Forthesakeofclarity:
unless explicitly attributed to another scenario, all of the results in this report are based on
3,000MWdcofinstalledandoperatingsolarPVinOntarioby2018.
ElectricityCosts
AnotherkeyassumptionrunningthroughthisreportisthatthecostofgenerationfromsolarPVshouldbe
comparedtothecostofgenerationfromnewnaturalgas.Thisassumptioniscentraltoouranalysisofthe
costimpactsofsolarPVonelectricitycustomersinOntario.
WhyarewecomparingsolarPVtonaturalgas?
Solar PV is essentially a form of peaking power. In other words, it supplies electricity when demand is
highest(i.e.duringthedaywhenthesunisshining).TraditionallyinOntarioeithercoalornaturalgasare
usedtomeetpeakelectricitydemand.Thisreportconsidersthecostsofbothoftheseformsofelectricity
generation; however, since Ontario has elected to phase out coalfired generation, we considered natural
gastheprimaryalternativetosolarPV.
Whyareweusingthecostofnewelectricitygenerationasthebasisforcomparison?
By2030,almost70%ofrequiredelectricitygenerationwillneedtocomefromneworrefurbishedelectricity
generatingfacilities.SolarPVwillbeapartofthenewgenerationrequiredtoserveelectricitydemandinthe
province.Assuch,thecostofsolarPVismostaccuratelycomparedwiththecostofothernewgeneration.
2.Investment
Largely,investmentinOntariossolarPVmarketisdrivenbytwoprovincialgovernmentprograms.Thefirst
is the Renewable Energy Standard Offer Program (RESOP), which is no longer offering new contracts for
solarPVgeneration.ThesecondisOntariosFeedinTariff(FIT)program,whichreplacedRESOPinoffering
contractsforsolarPVgeneration.
BoththeRESOPandFITprogramsprovidefixedtariffratestoindependentpowerproducersforrenewable
energygeneration.Independentpowerproducersmayincludebothindividualsandprivatecompanieswho
havereceivedcontractsthroughtheFITand/orRESOPprogramandwillreceiveasetpaymentforeveryunit
ofelectricitythattheirsolarPVfacilitygenerates.Inshort,itisprivateinvestorswhoinvestinOntariossolar
PVmarketandelectricitycustomerswhopayfortheelectricitythatsolarPVgenerates.
ThisreportdealswithinvestmentintoOntariossolarPVmarketintwoways.
First, it presents cumulative total investment and cumulative spending in Ontario. Figures 13 tie
totalprojectinvestmenttotheyearinwhichtheprojectisconnected.Bypresentingthedatainthis
way,itiseasytovisualisetheimpactofvariousmarketscenarios.
Second, it presents total annual investment and annual spending in Ontario. Figures 45 separate
investmentintotwophasesanddemonstratehowannualinvestmentswillchangeovertime.
ConstructionCostsandO&MCosts
Investment in Ontarios solar PV market can be broken into the following categories: (1) the construction
phaseand(2)theOperationsandMaintenance(O&M)phase.
Theconstructionphaseincludestheonetimecostswhicharerequiredtobuildanoperationalsolarfacility.
Costsduringtheconstructionphaseinclude:
equipmentsuchassolarPVmodules,inverters,andmounting
labourforinstallation
permittingandengineering
businessoverhead.
The O&M phase includes the ongoing costs which are required to maintain the performance of a solar
facility.CostsduringtheO&Mphaseinclude:
performancemonitoring
labour(forcleaning,replacingbrokenorwornoutsystemcomponents,etc.)
thereplacementofequipmentwhichisnotcoveredbywarrantees.
10
2.1TotalInvestment
Total investment includes all costs associated with the construction and operation of solar PV facilities in
Ontario.TotalinvestmentintoOntariossolarPVmarketwillbedeterminedbythreefactors:(1)thevolume
ofsolarPVinstalled,(2)thecostofthoseinstallations,and(3)ongoingO&Mcosts.
Ontario'sPVMarket:TotalInvestment
20,000
18,000
16,000
$Millions
14,000
12,000
HighCase
10,000
ExpectedCase
8,000
LowCase
6,000
4,000
2,000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Figure1Ontario'sSolarPVMarket:TotalInvestment
By2018,OntariossolarPVmarketisexpectedtodrive$12.9billionoftotalinvestment
ByreducinginstalledsolarPVfromapproximately3GW(expectedcasescenario)toapproximately
2GW(lowcasescenario),totalinvestmentwouldbereducedby$3.8billion
2.2SpendinginOntario
SpendinginOntariowillbedeterminedbytwofactors:(1)theamountoftotalinvestmentinOntariossolar
PVmarket,and(2)theproportionoftotalinvestmentthatisspentlocally(e.g.onOntariomadeequipment,
locallabour,localengineeringservices,etc.).Theproportionoflocalspendingwillbeprimarilyinfluencedby
the type of project (e.g. residential, commercial rooftop etc.) and the level of manufacturing and service
provisionthatoccursinOntario.
Note:OntariosFITprogramrequiresthatacertainpercentageofsolarprojectcostscomefromOntariogoods
and labour or Domestic Content. Solar PV FIT projects in Ontario are required to have either 40%, 50%, or
60% Domestic Content. Solar PV RESOP projects, on the other hand, do not have Domestic Content
requirements.
11
Ontario'sPVMarket:SpendinginOntario
9,000
8,000
$Millions
7,000
6,000
5,000
HighCase
4,000
ExpectedCase
3,000
LowCase
2,000
1,000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Figure2Ontario'sSolarPVMarket:SpendinginOntario
By2018,OntariossolarPVmarketwilldrivebetween$4.1$7.9billionofspendingintheprovince
ByreducinginstalledsolarPVfromapproximately3GW(expectedcasescenario)toapproximately
2GW(lowcasescenario),spendinginOntariowouldbereducedby$1.8billion
SpendinginOntarioasaPorBonofTotalInvestment
14,000
12,000
$Millions
10,000
8,000
TotalInvestment(ExpectedCase)
6,000
SpendinginOntario(ExpectedCase)
4,000
2,000
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Figure3SpendinginOntarioasaPortionofTotalInvestment
By2018,spendinginOntariowillaccountfor46%6oftotalprivateinvestmentinOntariossolarPV
market
ThepercentageoftotalprivateinvestmentwhichisspentinOntariowillincreaseovertime
o
Inpart,thisisduetoDomesticContentrequirements
ThisnumberistheweightedaverageoftheamountoflocalspendingthatwilloccuracrossallsolarPVinstallationsin
the province. It includes all RESOP program (which has no Domestic Content requirements), FIT program (which
mandates40%,50%,or60%DomesticContent),andothersolarPVinstallationsintheprovince.
12
2.3TotalInvestmentOverTime
Until now, we have presented investment in Ontarios solar PV market by linking it to the year in which
projects are connected. That is not the way that investment in the sector actually occurs. In reality, in
Ontario,investmentbeginslongbeforeaprojectisconnectedandcontinuesthroughouttheprojectslife.
Moreover,theinvestmentrequiredperunitofinstalledcapacitywilldecreaseovertime.Theexperienceand
expertisegainedduringearlyprojectsisexpectedtoleadtolowercoststhrough:
astreamlinedapprovalandpermittingprocess
efficienciesthroughoutthedevelopmentprocess
reducedequipmentcosts.
Figure 4 separates investment in the construction phase (onetime costs) from investment in the O&M
phase(ongoingcosts)anddemonstrateshowthatinvestmentwilloccuronanannualbasis.
TotalInvestmentOverTime
3,000
$Millions
2,500
2,000
1,500
O&MPhase
ConstrucUonPhase
1,000
500
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Figure4TotalInvestmentOverTime
Totalinvestmentwillpeakin20122013atapproximately$2.4billion
Investmentinconstructionofnewprojectswilldecreasefromthattimeon
After2018,andlastinguntilatleast2030(duetothedurationofsolarPVcontracts),investmentin
O&M, which extends the life of projects, will remain quite constant at approximately $53 million
annually
Note:TheinvestmentfiguresabovearebasedsolelyonOntariosolarPVinstallationsbetween20082018.They
do not include additional investment due to the export of Ontario manufactured solar PV equipment or to
OntariosolarPVprojectsbeyond2018.Assuch,totalinvestmentislikelytobehigherthanwhatisshownhere.
13
2.4SpendinginOntarioOverTime
Figure5demonstratestheamountoftotalinvestmentinOntariossolarPVmarketthatwillbespentinthe
provinceonanannualbasis.
SpendinginOntarioOverTime
1,200
$Millions
1,000
800
600
O&MPhase
ConstrucUonPhase
400
200
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Figure5SpendinginOntarioOverTime
SpendinginOntariowillpeakin2013atapproximately$1.1billion
Spendingonconstructionofnewprojectswilldecreasefromthatpointon
After2018,andlastinguntilatleast2030(duetothedurationofsolarPVcontracts),spendingon
O&MinOntariowillremainquiteconstantat$33millionannually
2.5SpendinginOntariowithOngoingManufacturingExports
AlloftheinvestmentandspendingnumbersabovearetieddirectlytosolarPVinstallationsinOntario(i.e.
the Ontario solar PV market) from 20082018. If Ontariobased manufacturing, project development, or
services are used outside of the province (as is already occurring and is likely to increase), spending in
Ontariowillexceedthefigurespresentedabove.
Forexample,ongoingsolarPVmanufacturinginOntariocouldhaveasubstantialimpactonlocalspending.
Figure 6 demonstrates the impact on local spending if Ontariobased module manufacturers were able to
sustainthepeaklevelofsalesrequiredtomeetOntariodemand(i.e.$ofmodulesalesin2013)from2013
onwards(i.e.from20132030).
14
SolarPVIndustrySpendinginOntario
(WithandWithoutModuleExports)
1,200
$Millions
1,000
800
600
OntarioMarketOnly
400
OntarioMarketandExports
200
0
200820102012201420162018202020222024202620282030
Figure6SolarPVIndustrySpendinginOntario(WithandWithoutModuleExports)
Giventhelevelofmanufacturingexportsdescribedabove,localspendingwouldincreasefrom$5.8
billiontoover$14billion
By2019,localspendingwouldstabilizeatabout$550millionannually
IfotherOntariobasedmanufacturing(i.e.invertersandracking)andservices(i.e.engineering)for
the PV industry were also to continue serving markets outside Ontario, ongoing spending in the
provincewouldbeevenhigher
15
3.JobCreation
Solar PV is a strong driver of job creation. Over the life of a solar PV contract in Ontario, local jobs are
createdprimarilyintheoperationsandmaintenance,constructionlabour,warehousinganddistribution,and
manufacturingsectors.
OfallOntarioselectricitygeneratingoptions,solarPVcreatesthemostemploymentopportunitiesperunit
ofelectricityproducedanddoessoatthelowestcostperjob.Thisfact,asdemonstratedbythenumbers
below, helps to explain why the province of Ontario and other governments from around the world are
includingsolarPVaspartoftheirelectricitysupplymix.
Note:Alljobscitedinthisreportrepresentonepersonyearofemployment.Asthenamesuggests,person
yearsofemployment(PYE)representoneyearsworthofemploymentforoneindividual(i.e.40hoursperweek
for52weeks).
3.1SolarPVJobCreationvs.JobCreationfromOtherFormsofPowerGeneration
By installing 3,000 MW dc of solar PV in Ontario, the province will create many times more employment
than would be created by installing an equivalent amount of generating capacity from other forms of
electricitygeneration.
JobCreaBonperGWhProduced
SolarPV
Wind
SmallHydro
Biomass
Nuclear
NaturalGas
Coal
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
Jobs
Figure7JobCreationperGWhProduced
Solar PV in Ontario7 creates more jobs per unit of electricity produced than traditional forms of
electricitygenerationinOntario;14timesmorethancoal,14timesmorethannaturalgas,and11
timesmorethannuclear
In general, renewable and green sources of electricity generation create more jobs per unit of
electricityproducedthannuclearandfossilfuelalternatives
SolarPVinOntarioisexplicitlydiscussedbecauseofthedurationoflocalFITandRESOPcontractsandtheamountof
solarradiationintheprovinceimpactjobcreationperunitofenergyproduced
16
Inadditiontocreatingmorejobsthanotherformsofelectricitygeneration,solarPValsocreatesthosejobs
atalowercosttoOntarians.Figure8presentsthecosttoOntarioelectricitycustomersforeachjobcreated
byvariouselectricitygenerationtechnologies.
CostperJobbyGeneraBonTechnology
Coal
NaturalGas
Nuclear
Biomass
SmallHydro
Wind
SolarPV
$
CostofExternaliUes
$500,000
$1,000,000
$1,500,000
CostperJob
Figure8CostperJobCreatedbyTechnology
ForeverydollarOntariansspendontheirelectricitybills,morejobscanbecreatedthroughsolarPV
generationthanthroughotherformsofelectricitygeneration
Excludingexternalities,naturalgasjobscost4.2timesasmuchassolarjobswhilecoaljobsare1.2
timesascostly
Whenexternalitiesareincluded,naturalgasjobsare4.8timesthecostofsolarjobsandcoaljobs
are5.3timesmoreexpensive
Note: An externality is a cost that is a result of a financial transaction but that is not monetized within that
transaction.Forexample,intheelectricitysector,electricityfromcoalfiredgenerationisveryinexpensivebutit
has expensive health and environmental impacts. When we pay for coalfired generation we pay only for the
electricitythatwereceive,notforthenegativehealthandenvironmentalimpactsitcauses.Thecostsofthose
impactsarecalledexternalitiesandtheyarebornebypartiesexternaltothetransaction.
17
3.2SolarPVJobCreationinOntariobyInstallationYear
Figure 9 demonstrates job creation linked to the year in which solar PV projects are connected to the
electricitysystem.Inotherwords,althoughnotalljobsassociatedwithasolarPVfacilityoccurintheyear
thefacilityisconnected,thegraphdisplaystheminthatmanner.Itisausefulwaytoseethedirectimpactof
annualinstallationvolumesonjobcreation.
SolarPVSectorEmploymentinOntariobyInstallaBonYear
Jobs
10,934
14,961
15,055
4,097
4,150
11,827
3,375
3,333
6,830
4,323
1,311
49
2008
1,103
2009
10,864
1,978
10,905
4,853
3,012
2010
1,532
8,452
7,601
2011
2012
2013
2014
5,161
2015
2,494
3,629
734
1,760
2016
2017
1,481
2018
Year
O&M
ConstructionPhase
Figure9SolarPVSectorEmploymentinOntario
Insum,installedsolarPVcapacityinOntariofrom20082018isexpectedtocreate74,217jobsinthe
province
SolarPVwillcreateanaverageofapproximately25jobsinOntarioperMWinstalled
Note:ThejobcreationfiguresherearebasedsolelyonOntariosolarPVinstallationsbetween20082018.They
do not include additional job creation due to the export of Ontario manufactured solar PV equipment or to
OntariosolarPVprojectsafter2018.Totaljobcreationislikelytobehigherthanwhatisshownhere.
18
3.3SolarPVJobCreationbyJobYear
Figure10demonstratesjobcreationbytheyearinwhichemploymentisexpectedtooccur.Thesenumbers
maybeusedasaproxyforthenumberoffulltimeemployeesinthesolarPVindustryinOntarioinanygiven
year.
SolarPVSectorEmploymentinOntariobyJobYear
14,000
12,000
Jobs
10,000
8,000
6,000
4,000
2,000
0
2006
2007
2008
2009
2010
2011
ConstrucUonPhase
2012
2013
Year
2014
2015
2016
2017
2018
O&M
Figure10SolarPVSectorEmploymentinOntariobyJobYear
In2011,theprovincessolarPVindustrywillprovidetheequivalentof8,188fulltimejobsinOntario
In2012,thatnumberwillgrowtoover11,400fulltimejobs
After 2018, approximately 1,100 ongoing, fulltime jobs will be needed for the operation and
maintenanceof3,000MWdcofsolarPVinOntario
3.4SolarPVJobCreationinOntariowithOngoingManufacturingExports
ThejobcreationnumbersabovearetieddirectlytosolarPVinstallationsinOntario(i.e.theOntariosolarPV
market)from20082018.IfOntariobasedmanufacturing,projectdevelopment,orservicesareusedoutside
oftheprovince,jobcreationinOntariowillexceedthefigurespresentedabove.
For example, ongoing solar PV manufacturing in Ontario could have a substantial impact on local job
creation. Figure 11 demonstrates the impact on job creation if Ontariobased module manufacturers were
abletosustainthepeaklevelofsalesrequiredtomeetOntariodemand(i.e.$ofmodulesalesin2013)from
2013onwards(i.e.from20132030).
19
PVIndustryJobCreaBoninOntario(WithandWithoutExports)
12,000
10,000
Jobs
8,000
6,000
4,000
OntarioMarketOnly
OntarioMarketandExports
2,000
Figure11SolarPVSectorJobCreationinOntario(WithandWithoutExports)
Giventhelevelofmanufacturingexportsabove,totalemploymentinOntariowouldincreasefrom
approximately74,000jobstoover100,000jobs
After 2018, local employment in the solar PV industry would stabilize in the range of 3,400 jobs
annually
3.5Directvs.IndirectJobs
Jobcreationisnormallyclassifiedintothreecategories:directjobs(included),indirectjobs(included),and
inducedjobs(notincluded).
Direct jobs are jobs that are created to immediately serve the actual supply chain; for example,
thesejobsincludesolarmodulemanufacturingandprojectconstruction
Indirectjobsarejobsthathavebeencreatedtofacilitatethedevelopmentandmaintenanceofthe
supply chain; for example these jobs include renovations on manufacturing facilities and building
themachinesusedtoassemblesolarmodules
Inducedjobsarejobsthatarecreatedelsewhereintheeconomyasaresultofspendingfromboth
directandindirectworkersandfirms
Although induced jobs are real, they are difficult to quantify accurately. We have chosen to take a
conservativeapproachtojobforecastingandhaveincludedonlydirectandindirectjobsinthisreport.
20
DirectandIndirectJobCreaBoninOntario'sSolarPVSector
indirectjobs
34%
directjobs
66%
Figure12DirectandIndirectJobCreationinOntario'sSolarPVSector
OntariossolarPVsectorwillcreateapproximately:
49,000directjobsbetween20082018
25,000indirectjobsbetween20082018.
3.6SolarPVEmploymentbyTypeofJob
OntarioSolarPVEmploymentbyTypeofJob
Other
4%
O&M
29%
Manufacturing
14%
ProjectDevelopment
10%
ConstrucUonLabour
24%
Wholesale&
DistribuUon
19%
Figure13OntarioSolarPVEmploymentbyTypeofJob
Overtheassumed20yearlifeofsolarfacilitiesinOntario,ongoingO&Mjobswillaccountfornearly
30%ofalljobcreation
Manufacturingwillaccountforaminimumof14%ofemployment;thisgrowsto42%ifweassume
exportsallowforcontinuedmanufacturing
Constructionlabourwillaccountfor24%ofexpectedemployment
21
4.ElectricityCustomerImpacts
By2030,70%ofOntarioselectricitydemandwillneedtobemetbyneworrefurbishedsourcesofelectricity
generation.Ourfuturesupplymixwillbearrivedatthroughdifficultdecisionswithimportantimplications
(i.e.costofelectricity,jobcreation,healthimpacts,innovationetc.).Ontarioelectricitycustomerswillpay
forournewelectricitysupplymostlythroughtheirelectricitybills,butalsothroughtheirtaxesandthrough
damages to their environment. As such, it is important to have a factbased discussion about the relative
costsandbenefitsofvariousformsofelectricitygeneration;toconsiderwhatelectricitysupplymixwillgive
electricitycustomersintheprovincethebestvaluefortheirmoney.
ToaccuratelygaugethecostofinstallingsolarPVintheprovince,itismostusefultoconsiderthemarginal
costofthatelectricitygeneration.
Note:ThemarginalcostofsolarPVisthecostforgeneratingelectricityfromsolarPVthatisoverandabovethe
costofgeneratingtheequivalentamountofelectricityfromanotherformofelectricitygeneration.
ThismeasureismostusefulbecauseOntariowillneednewgenerationfacilitiesregardlessofwhethersolar
PVisinstalledornot.Inotherwords,ifsolarPVisnotinstalledinOntariosomeotherformofgeneration
mustbeinstalledinitsplace.Itisagainstthecostofthatothergenerationthatthecostofsolarshouldbe
compared.
4.1ComparingtheCostsofElectricity
TounderstandexactlywhatthemarginalcostisforsolarPVinOntario,wemusthaveaclearpictureofthe
pricesforbothsolarPVanditsalternatives.Toproperlycomparecosts,thefollowingfourquestionsmustbe
answered.
1.
WhatisthecostofsolarPVinOntario?
Weprojectthattheeightyear(20112018)weightedaveragecostofallsolarinOntariowillbe46.7
cents/kWh.
2. ShouldthecostofsolarPVbecomparedagainstcurrentelectricitypricesinOntario?
Comparing the cost of solar to the cost of existing electricity generation facilities sets up a false
choiceforOntarians.Itsuggeststhatwehavetheoptionofnotinvestinginanynewgenerationand
can simply keep our existing facilities without further investments. In reality, many of Ontarios
electricity generating facilities are nearing the end of their lives. Approximately 70% of Ontarios
electricitygenerationwillneedtobebuiltorrefurbishedby2030.
Assuch,thecostofsolarPVshouldbecomparedwiththecostofelectricityfromneworrefurbished
electricityproducingassets.ThecurrentlowcostofelectricityproducedinOntarioisnotarelevant
benchmarkforthecostoffuturegeneration.
22
3.
AgainstwhichtypesofelectricitygenerationshouldthecostofsolarPVbecompared?
While the costs and benefits of all sources of electricity generation should be considered for
Ontariosfutureelectricitysupplymix,solarPVisessentiallyaformofpeakingpowergeneration.
Assuch,thecostsandbenefitsofsolarPVcanbebestunderstoodwhencomparedwithotherforms
of peaking power generation. Alternative sources of peaking power include natural gas, coal, and
biomass.
Here,wecomparesolarPVwiththeprovincestraditionalformsofpeakingpower:naturalgasand
coal.
4. IscostperunitofgenerationasufficientmeasureforthecostofelectricitytoOntarians?
In short, the answer is no. Ontario has decided to phaseout coal fired generation because of the
additional health and environmental costs that it imposes on Ontarians. Hundreds of premature
deathsandoverathousandemergencyroomvisitshavebeenattributedtocoalfiredgenerationon
anannualbasis8.Althoughthesecostsarenotincludedinelectricitybills,theyareveryrealandare
ultimatelybornebyOntariotaxpayers.
Figure 14 shows the cost per unit of generation for solar PV, natural gas, and coal including conservative
assumptionsforhealthandenvironmentalexternalities.
AverageCost/kWhforPeakingPowerinOntario(IncludingExternaliBes)
SolarPV
Coal
$/kWhGeneraUon
$/kWhExternaliUes
NaturalGas
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
$/kWh
Figure14AverageCost/kWhforPeakingPowerinOntario(IncludingExternalities)
Includingexternalities,themarginalcostofsolarPVrelativetocoalis30cents/kWh
Includingexternalities,themarginalcostofsolarPVrelativetonaturalgasis31.7cents/kWh
SolarPViscurrentlyamoreexpensiveformofelectricitygenerationthanarecoalornaturalgas
DSSManagementConsultantsInc.(2005).CostBenefitAnalysis:ReplacingOntario'sCoalFiredElectricityGeneration.Toronto:
OntarioMinistryofEnergy.
23
ItismostaccuratetoincludethecostofexternalitieswhencomparingsolarPVwithfossilfuelgeneration.
However,quantifyingexternalitiescanbechallengingandincludingtheminanyanalysisopensfindingsup
to additional scrutiny. As such, the following analysis compares solar PV to natural gas and coalfired
generationbothincludingconservativeestimationsofexternalities(section4.2)andexcludingexternalities
altogether(section4.3).
4.2ImpactonOntarioElectricityCustomersIncludingExternalities
InordertoputthemarginalcostofsolarPVinperspective,itisusefultothinkofitsimpactontheaverage
Ontarioelectricitycustomer.Figure15comparesthecostofsolarPVwiththecostsofnaturalgasincluding
externalitiesandcoalincludingexternalities.
SolarPVvs.AlternaBves
200
AverageCostperMonth
150
100
50
2011
2012
2013
2014
2015
2016
2017
2018
CostofNaturalGas(withExternaliUes)toReplaceSolarPVGeneraUon
CostofCoal(withExternaliUes)toReplaceSolarPVGeneraUon
Figure15ExpectedAverageMonthlyHouseholdElectricityBill:SolarPVvs.Alternatives
In 2018, for the average Ontario electricity customer, the marginal cost of solar PV relative to
naturalgaswillbe$4.58/month
o
In2018,thiswillequal2.8%oftheaverageresidentialelectricitybillinOntario
Usingthesamemeasure,themarginalcostofsolarPVrelativetocoalwillbe$4.34or2.7%ofthe
averageresidentialelectricitybillinOntario
Onaverage,bychoosingtogenerateelectricityfromsolarPVratherthannaturalgas,theaverage
Ontarioelectricitycustomersmonthlybillwillincreaseby$0.65annuallybetween20112018
24
4.3ImpactonOntarioElectricityCustomersExcludingExternalities
TogaugetheimpactofsolarPVonOntarioseconomy,itismostaccuratetoincludeexternalitiesinthecost
of fossil fuels. However, this concept is somewhat complex. To provide clarity on the direct electricity
customerimpactofincludingsolarPVinourelectricitysupplymix,wehavecomparedthecostofsolarPV
withthecostsofnaturalgasexcludingexternalitiesandcoalexcludingexternalities.
When we exclude the external costs of fossil fuels, coal is clearly the least expensive option. However,
Ontarianshavealreadydismissedcoalaspartofoursupplymixbasedonitsheavyimpactonhealthandthe
environment.
SolarPVvs.AlternaBves(ExcludingExternaliBes)
200
AverageCostPerMonth
150
100
50
2011
2012
2013
2014
2015
2016
2017
2018
CostofNaturalGas(withoutExternaliUes)toReplaceSolarPVGeneraUon
CostofCoal(withoutExternaliUes)toReplaceSolarPVGeneraUon
Figure16ExpectedAverageMonthlyHouseholdElectricityBill:SolarPVvs.Alternatives(ExcludingExternalities)
In 2018, for the average Ontario electricity customer, the marginal cost of solar PV relative to
naturalgaswillbe$4.91/month
o
In2018,thiswillequal3.0%oftheaverageresidentialelectricitybillinOntario
Usingthesamemeasure,themarginalcostofsolarPVrelativetocoalwillbe$6.47or4.0%ofthe
averageresidentialelectricitybillinOntario
Onaverage,bychoosingtoinstallsolarPVratherthannaturalgas,theaverageOntarioelectricity
customersmonthlybillwillincreaseby$0.70annuallybetween20112018
25
5.CostPremiumvs.JobCreation
ThereisapricetobepaidforchoosingsolarPVoverotherformsofpeakingpower.Thecostofgeneration
fromsolarPV,between20112018,willbegreaterthanthecostofitsalternatives.Ontheotherhand,per
dollarinvested,solarPVcreatesmanytimesmorejobsthannaturalgasorcoal.
Figure 17 displays the electricity generation and job creation returns from a $1 million investment by
electricitycustomersineithersolarPV,naturalgas,orcoal9.
ElectricityGeneraBon/$1,000,000
CosttoOntarioElectricityCustomers
4.0
3.5
3.0
2.5
GWh
JobCreaBon
JobCreaBon/$1,000,000
CosttoOntarioElectricityCustomers
2.0
1.5
4
3
1.0
0.5
NaturalGas
Coal
SolarPV
NaturalGas
Coal
SolarPV
Figure17ElectricityGenerationandJobCreationper$1,000,000CosttoElectricityCustomers
SolarPVwillgeneratebetween32%34%theelectricitygeneratedbynaturalgasorcoal
SolarPVwillcreatebetween4.85.3timesasmanyjobsasnaturalgasorcoal
Fossilfuelexternalitiesareincludedinthesecosts.
26
Glossary
AverageOntarioElectricityCustomer
Demandforelectricityintheprovincecanbeseparatedintothreesegments:industrialdemand,commercial
demand, and residential demand. In this report, where the average Ontario electricity customer is
referenced, we are referencing residential customers only. Based on figures presented in the LTEP the
averageresidentialelectricitycustomerinOntarioconsumes800kWhofelectricityonamonthlybasis10.
DirectJobs
Directjobsarejobsthatarecreatedtoimmediatelyservetheactualsupplychain;forexample,thesejobs
includemodulemanufacturingandprojectconstruction.
DomesticContent
OntariosFeedinTariffprogramhassetlevelsofdomesticcontent(forwindandsolarprojects)thatmust
beadheredtoinordertoqualifyfortheprogram.Essentially,DomesticContentreferstogoodsandservices
thatarenecessaryfortheinstallationofanelectricitygeneratingfacilityandthatarelocaltoOntario.For
solarPV,levelsofDomesticContentareeither40%,50%,or60%.
Externalities
An externality is a cost that is a result of a given transaction but that is not monetized within that
transaction.Forexample,intheelectricitysector,electricityfromcoalfiredgenerationisveryinexpensive
butithasexpensivehealthandenvironmentalimpacts.Whenwepayforcoalfiredgenerationwepayonly
fortheelectricitythatwereceive,notforthenegativehealthandenvironmentalimpactsitcauses.Thecosts
ofthoseimpactsarecalledexternalitiesandtheyarebornebypartiesexternaltothetransaction.
FeedinTariff(FIT)Program
The program features stable prices under longterm contracts for electricity generated from renewable
sources. The FIT program includes standardized rules and contracts for anyone interested in developing a
qualifyingrenewableenergyproject.Pricesaredesignedtocoverproject costsandallowforareasonable
return on investment over the contract term. Ontarios FIT program continues to accept applications and
awardcontracts.
IndirectJobs
Indirectjobsarejobsthathavebeencreatedtofacilitatethedevelopmentandmaintenanceofthesupply
chain; for example these jobs include renovations on manufacturing facilities and building the machines
usedtoassemblesolarmodules.
InducedJobs
Inducedjobsarejobsthatarecreatedelsewhereintheeconomyasaresultofspendingfrombothdirectand
indirectworkersandfirms.

10
OntarioMinistryofEnergy.(2010).Ontario'sLongTermEnergyPlan:BuildingourCleanEnergyFuture.Government
ofOntario.
27
LongTermEnergyPlan(LTEP)
TheLongTermEnergyPlan(LTEP)isagovernmentdocumentwhichchartsthepathforOntariosenergy
future.ThedocumentwaspublishedbyOntariosMinistryofEnergyinthefallof2010.
The LTEP set a target of 10,700 MW of renewable generation, excluding hydroelectric, by 2018. Similarly,
theLTEPhascalledfor1.5%oftotalgenerationinOntariotocomefromsolarPVby2030.
PersonYearsofEmployment(PYE)
PersonYearsofEmploymentareacommoneconomictermusedtomeasurejobcreation.OnePYEisequal
tooneyearoffulltimework(e.g.40hoursofworkperweekforaperiodof52weeks).
RenewableEnergyStandardOfferProgram(RESOP)
OntariosRESOPprogramwasamethodforprocuringrenewableenergyfeaturingfixedpaymentratesfor
various types of renewable generation. The program is no longer accepting applications or awarding
contracts.
SolarPhotovoltaic(PV)
SolarPVisaformofelectricitygenerationthatconvertssolarradiationintodirectcurrentelectricity.
28
Appendices
AppendixAMethodology
DataCollection
Primarydata for this research wascollectedthroughinterviews andsurveys with awiderangeofindustry
stakeholders. Information was gathered between December, 2010 and June, 2011. In total, ClearSky
Advisorsconductedover150indepthinterviewsandcompletednearly100surveys.Overall,weinterviewed:
largeandsmallprojectdevelopers,representing87%oftheMWvolumeofexecutedFITcontracts;
modulemanufacturersthatrepresent89%ofexpectedmoduleproductioncapacityinOntario;and
invertermanufacturersthatrepresentover85%ofexpectedinverterproductioncapacityinOntario,
Extensivesecondaryresearchwasalsoundertakentosupportourfindings.Thisresearchwasusedtoinform
interviews,crosscheckinterviewfindings,compareOntariowithothermarkets,andgenerallytodevelopa
deeperunderstandingoftheeconomicsofOntariossolarPVsector.Notableexamplesofsecondarysources
include:
publications by the Ontario Power Authority (OPA) including Ontarios LongTerm Energy Plan
(LTEP),IntegratedPowerSystemPlan(IPSP)andquarterlyupdates
peerreviewedstudiesfromacademicsourcesandpublications
statementsandplansbytheMinistryofEnergy,IESO,andOPG.
OurApproach
InordertoanalysetheeconomicimpactsofsolarPVinOntario,aframeworkforprojectingthefutureofthe
market is required. ClearSky Advisors regularly publishes market forecasts for the Ontario PV market and
continuously acquires data from a broad and comprehensive group of stakeholders in Ontarios solar PV
sector.ToanswerthequestionsCanSIAaskedofus,itwasnecessarytoextendourmarketforecastto2018.
Todevelopourmarketforecast,sevenmarketsegmentsandthreemarketscenarioswereanalysed.
In addition to our market forecast, each question which CanSIA asked required a unique methodology. A
highlevelsummaryofourapproachtoansweringeachquestionisincludedbelow.
To forecast total investment, installation volumes were compared with installation costs and
ongoingcostsovertime.Thiswasdoneforeachmarketsegmentineachscenario.Installationcosts
wereforecastbasedonhistorictrends,marketdynamics,interviewdata,andinhouseanalysis.
Spending in Ontario was calculated by assigning a local spending multiplier to each market
segment. This multiplier was arrived at by assigning local spending percentages to 10 different
project cost components (i.e. modules, inverters, installation, etc.). Amounts for local spending
were largely established through interviews and inhouse analysis that we compared to industry
practicesoutsideofOntario.Inaddition,inputsfromaClearSkyAdvisorssurvey(completedbyover
40installersanddevelopersactiveintheOntarioPVmarket)wereused.
ForecastsforjobcreationweregeneratedthroughaClearSkyAdvisorsmodelthatincorporatesan
established and recognized 3rd party tool (Jobs and Economic Development Impact Model
29
PV1.10.01)withinhousemodeling.InputsforthemodelweretakenfromClearSkyAdvisorsmarket
modeling as well as trusted 3rd party sources (e.g.. economic multipliers specific to Ontario were
obtainedfromStatisticsCanada).Thesenumberswerethencrossreferencedagainstprimarydata
acquiredthroughinterviewsandoursurveytoverifyaccuracy.
Levels of job creation by various generating technologies were taken from recent University of
California,Berkeleyresearch11thatsynthesizesdatafrom15jobstudies.ClearSkyAdvisorsadapted
this research to reflect Ontariospecific conditions. For example, ClearSky Advisors adapted solar
jobcreationtoreflectsolarinsolationandthedurationofsolarPVgenerationcontractsinOntario.
Thecostofjobcreationwascalculatedbycomparingjobcreationperunitofelectricitywiththecost
perunitofelectricity.
Electricity customer impacts were calculated using trusted 3rd party sources combined with our
analytical model. Our generation forecast is largely taken from Ontarios LongTerm Energy Plan
(LTEP).Withtheexceptionofsolar(forwhichpricedatahasbeentakenfrominhouseforecasting),
price information is taken from trusted sources such as: the Ontario Power Authority, Ontarios
MinistryofEnergy,andMoodysinvestmentservice.Costdataforfossilfuelsincludeenvironmental
and health externalities where they have been quantified by either peer reviewed publication or
governmentdata.

11
Wei,M.,Patadia,S.,&Kammen,D.M.(2010).PuttingRenewablesandEnergyEfficiencytoWork:HowManyJobs
CantheCleanEnergyIndustryCreateintheUS?EnergyPolicy38,919931.
30
AppendixBMarketForecast
Manyofthekeyfindingspresentedinthisreport(i.e.investment,jobcreation,electricitycustomerimpacts)
arehighlysensitivetotheamountofsolarPVthatistobeinstalledinOntariofrom20112018.ClearSky
AdvisorsregularlypublishesindepthmarketforecastsfortheOntariosolarPVindustry.Whilethedetailed
results of our market forecast are outside the scope of this report, we have included a brief, high level
summary of our most recent market research in order to provide the reader with a framework for
understandinghowsolarPVimpactsOntarioseconomy.
HistoricInstallations
OntarioisayoungsolarPVmarketthathasexperiencedsignificantgrowthoverthepastthreeyears.
In2008,2MWdcwereinstalledintheprovince
MarketForecast20112018
Lookingahead,thereareawiderangeofpossibleoutcomesforOntariossolarmarket.From20112018,
the rate of solar installation in Ontario will be impacted by a variety of factors. These include: political
support, the cost of installing solar PV, future tariff rates for solar PV, transmission availability, the
permittingprocess,andmanyotherissues.
In order to capture the uncertainty that exists in the market, we have forecast high case, low case, and
expected case scenarios. While the modelling of these scenarios includes many variables, each scenario is
drivenbyahighlevelconceptualizationofhowthemarketwilldevelop.
HighCaseScenario
Inthehighcasescenario,Ontariowillinstallapproximately3,800MWdcofsolarPVby2018.
ThehighcasescenarioisbasedonsolarPVbecomingamoresignificantpartoftheprovinceselectricitymix
thaniscurrentlytargetedintheLongTermEnergyPlan(LTEP).
This could occur if solar PV were to make up a larger than expected share of the 10,700 MW of
renewables targeted in the LTEP or if Ontarios overall target for renewables were to increase
comparedtothecurrentLTEP
o
TheLTEPistobeupdatedeverythreeyearsandtheroleforrenewablesmaybeincreased
basedonmarketconditions
Ourhighcasescenarioassumesalowerthanexpectedattritionrateamongstexistingcontracts
ExpectedCaseScenario
Intheexpectedcasescenario,Ontariowillinstallapproximately3,000MWdcofsolarPVby2018.
TheexpectedcasescenarioisbasedonmeetingtheLTEPstargetsforgenerationfromsolarPV(i.e.10,700
MWofrenewablesby2018and1.5%oftotalelectricitygenerationby2030)
31
ThiswillrequireareducedlevelofcontractoffersforsolarPVgenerationcomparedtothecurrent
rate
OurexpectedcasescenarioassumesacontinuanceoftheFITprogram
Italsoassumesamoderateattritionrateamongstexistingcontracts
LowCaseScenario
Inthelowcasescenario,Ontariowillinstallapproximately2,000MWdcofsolarPVby2018.
ThelowcasescenarioisbasedonsolarPVbecomingalesssignificantpartoftheprovinceselectricitymix
thaniscurrentlytargetedintheLongTermEnergyPlan(LTEP).
This could occur if solar PV were to make up a smaller than expected share of the 10,700 MW of
renewables targeted in the LTEP or if Ontarios overall target for renewables were to decrease
comparedtothecurrentLTEP
Ourlowcasescenarioassumesasteeperthanexpectedreductiontotherateofcontractoffersfor
solarPVgeneration
Italsoassumesahigherthanexpectedattritionrateamongstexistingcontracts
32
AppendixCCostoftheLongTermEnergyPlan
Ontarios LongTerm Energy Plan charts a course for our electricity supply mix through 2030. The plan
requiressubstantialinvestmentinnewandrefurbishedsourcesofelectricitygeneration.
ProposedchangestoOntariossupplymixinclude:
therefurbishmentofaginggenerationassets(i.e.10,000MWofnucleargenerationcapacity)
theconstructionof2,000MWofnewnucleargenerationcapacity
theinstallationof10,700MWofrenewableenergygeneration
theclosingofallcoalfiredpowerplantsintheprovince
anincreasedrelianceonbothhydroelectricpowerandnaturalgasforelectricity.
AllofthesechangeswillhaveimpactsonthecostofelectricityintheOntario.
200
180
160
140
120
100
80
60
40
20
0
AverageMonthlyBill
2029
2030
2028
2027
2026
2025
2023
2024
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2011
LTEPPorUonofMonthlyBill
2012
$/Month
AverageOntarioRatepayer:
LTEPNewandRefurbishedGeneraBonasaPorBonofTotalMonthlyBill
Figure18AverageOntarioElectricityCustomer:LTEPNewandRefurbishedGenerationasaPortionofTotalMonthly
Bill
By2018,LTEPtargetsfornewandrefurbishedgenerationwillcosttheaverageOntarioelectricity
customer$41.90permonthor26%oftheirmonthlyelectricitybill
By2030,LTEPtargetsfornewandrefurbishedgenerationwillcosttheaverageOntarioelectricity
customer$60.65permonthor39%oftheirmonthlyelectricitybill
CostofSolarPVWithintheLongTermEnergyPlan
Clearly,meetingLTEPtargetsforelectricitygenerationby2030willrequiresubstantialinvestment.Largely,
thecostsofnewandrefurbishedgenerationwillbepassedontoOntarioelectricitycustomers.SolarPVwill
accountforarelativelysmallportionofthosecosts.
33
AverageOntarioRatepayer:SolarPVasaPorBonofMonthlyLTEPCost
70
60
$/Month
50
40
LTEPPorUonofMonthlyBill
30
SolarPorUonofLTEP
20
10
2029
2030
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2011
2012
Figure19AverageOntarioElectricityCustomer:SolarPVasaPortionofMonthlyLTEPCost
Between 20112030, the average monthly cost of the LTEP to the average Ontario electricity
customerisexpectedtobe$45.05
Overthatsameperiod,thetotalaveragemonthlycostofsolarPVtotheaverageOntarioelectricity
customerisexpectedtobe$4.87
FortheaverageOntarioelectricitycustomer,solarPVisexpectedtoaccountfor10.8%ofthecost
oftheLTEP
34
AppendixDAssumptions
Assumption
Value
Longterm target for generation from solar PV in 2.97TWhby2030

Ontario
(Or1.5%ofOntarioselectricitysupply12)
Weighted average capacity factor in Ontario (relative 11.5%

toMWdc)
Moduleperformancedegradation
1%annually
Expectedinstalledcapacityby2018
Approximately3,000MWdc
WeightedaveragesolarFITtariffratedecrease
7%annually
Averageannualinflationrate
2%13
AveragecostofsolarPVgeneration20112018
46.7cents/kWh
14
Averagecostofnewnaturalgasgeneration(excluding 13cents/kWh20102030
externalities)
Externalitiesassociatedwithnaturalgas
2cents/kWh15
Averagecostofcoalfiredgeneration
3.7cents/kWh16
Externalitiesassociatedwithcoal
12.7cents/kWh17
Local spending on construction phase of solar PV 36%48% of total investment depending on

projectsinOntario
type of project (e.g. residential or commercial

rooftop)andlevelofDomesticContent

12
Ontario.
13
BankofCanadatarget
14
Ontario Power Authority. (2007). Methodology and Assumptions for the Cost to Consumer Model.
http://www.powerauthority.on.ca/ipsp/Storage/53/4886_G21_Att_1_corrected_071019.pdf.; and Ontario Power
Authority.
(2008).
Integrated
Power
System
Plan
for
the
Period
20082027.
http://www.powerauthority.on.ca/integratedpowersystemplan/gplanoutcomes.
15
DSS Management Consultants Inc. (2005). Cost Benefit Analysis: Replacing Ontario's Coal Fired Electricity Generation.
Toronto:OntarioMinistryofEnergy.
16
17
ibid
ibid
35
Local spending on O&M phase of solar PV projects in 69%76% of total investment depending on
Ontario
typeofinvestment
(Includinglabourandequipment)
AveragetotalsolarPVinstallationcostdecrease2011
6.4%
2018
O&Mspending
<1%ofcapitalcostsannually
(For
all
market
segments:
residential,
commercialrooftop,etc.)
ConversionfromMWactoMWdc
115%
Increase to the average Ontario electricity customers $28

averagemonthlybill20112030
Neworrefurbishedgenerationby2030
70%19
(Relativeto2011)
20
Average monthly consumption of electricity by the 800kWh
averageOntarioelectricitycustomer

19
Ontario Power Authority. (2011). Integrated Power System Plan (IPSP) Planning and Consultation Overview. OPA.;
Ontario.
20
Ontario.
36
TableofFigures
Figure1Ontario'sSolarPVMarket:TotalInvestment................................................................................ 10
Figure2Ontario'sSolarPVMarket:SpendinginOntario............................................................................11
Figure3SpendinginOntarioasPortionofTotalInvestment ......................................................................11
Figure4TotalInvestmentOverTime ........................................................................................................ 12
Figure5SpendinginOntarioOverTime.....................................................................................................13
Figure6SolarPVIndustrySpendinginOntario(WithandWithoutModuleExports) ................................ 14
Figure7JobCreationperGWhProduced................................................................................................... 15
Figure8CostperJobCreatedbyTechnology ............................................................................................ 16
Figure9SolarPVSectorEmploymentinOntario .......................................................................................17
Figure10SolarPVSectorEmploymentinOntariobyJobYear.................................................................. 18
Figure11SolarPVSectorJobCreationinOntario(WithandWithoutExports) .......................................... 19
Figure12DirectandIndirectJobCreationinOntario'sSolarPVSector ..................................................... 20
Figure13OntarioSolarPVEmploymentbyTypeofJob ............................................................................ 20
Figure14AverageCost/kWhforPeakingPowerinOntario(IncludingExternalities) .................................. 22
Figure15ExpectedAverageMonthlyHouseholdElectricityBill:SolarPVvs.Alternatives ......................... 23
Figure 16 Expected Average Monthly Household Electricity Bill: Solar PV vs. Alternatives (Excluding
Externalities) ....................................................................................................................................... 24
Figure17ElectricityGenerationandJobCreationper$1,000,000CosttoElectricityRatepayers .............. 25
Figure 20 Average Ontario Electricity Customer: LTEP New and Refurbished Generation as a Portion of
TotalMonthlyBill ................................................................................................................................ 32
Figure21AverageOntarioElectricityCustomer:SolarPVasaPortionofMonthlyLTEPCost ....................33
37
Bibliography
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Economic Impacts of The Solar Photovoltaic Sector in Ontario 2008-2018 July 26 0

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EconomicImpactsoftheSolarPV

Longterm target for generation from solar PV in 2.97TWhby2030

Weighted average capacity factor in Ontario (relative 11.5%

Local spending on construction phase of solar PV 36%48% of total investment depending on

type of project (e.g. residential or commercial

Increase to the average Ontario electricity customers $28

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