Developing a Solar Hot Water Deployment Program Lessons From the Toronto Solar Neighbourhoods Initiative April 28, 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

Residential Hot Water’s Role in CO 2 Reductions It is the single largest reducer of CO 2 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 CO 2 /year reduction in Toronto (but more in high carbon energy jurisdictions) –Over system life (20 years) = t CO 2

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?

Toronto Solar Neighbourhoods Initiative Solar Neighbours and Neighbourhoods

Toronto’s Community Solar Initiative Prior to 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!

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 Balance Apr-07$500 Solar put into ecoENERGY program Mar-08$500$1000Province matches May-08$1,000$2,000SN program Mar-09$1,500$3,500ecoENERGY program increase Jan-09$900$4,400Home Renovation Tax Credit Dec-09-$1,000$3,400SN support ends Feb-10-$900$2,500HRTC ends Apr-10-$1,250$1,250 ecoENERGY program ends - uncertain about provincial support

Toronto Solar Neighbourhoods Initiative 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 Solutions IssueResolutionDateSavings 1. Cost of Building PermitReduced from $400 to $98 (minimum charge) August 2008 $ 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 ProcessToronto Simplifies and makes consistent May 2009Up to 20 hours 5. Roof Structural ConcernsToronto 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 Backflow PreventionChanges to the OBC clarifies requirements January 2010 $ 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 ItemCostContractor Time Engineer Stamped Drawings, Mechanical and Structural $700 - $2,000 Done by a P.Eng – Done for each installation by contractor ? Building Permit Application$ hrs Roof Structure Report$600- $1,000 Done 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 ItemCostContractor Time Certified Plan development$700 - $2,000 Done by a P.Eng - Only done once Should be done by manufacturer ? Building Permit Application$962-3 hrs Roof Structure Report1 hr Backflow Preventor (DCAP type)$25 Thermal Expansion Device$25 (TER valve used instead of an expansion tank) Site inspection (with Toronto Building inspector)2 hrs Total$ hrs

Toronto Building is getting Better at Issuing Building Permits

Toronto Solar Neighbourhoods Initiative Learning from the Neighbours

What is the Price of a System? SlopedFlat Average$8,291$9,401 Highest$10,896$13,239 Lowest$7,601$7,560 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

Overcoming the “1 st 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?

It’s Now Cheaper to Heat Water with Electricity Potential of fuel switching to electricity This moves SDHW into electrical load displacement

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 Toronto Contacts Rob McMonagle SolarCity Program Manager Toronto Atmospheric Fund Solar Neighbourhoods Information Line Solar Permits