Innovation Energy: How Calgary became an unlikely location for a creative solar solution | Financial Post

The energy industry gets a bad rap when it comes to innovation, yet the oilpatch is by far the largest spender on clean tech in Canada, to the tune of $1.4 billion a year. As part of its continuing coverage of the innovation economy, the Financial Post reports on the intersection of technology and energy, from the oilpatch in Alberta, off the shores of Nova Scotia to the plains of Saskatchewan.

CALGARY — Rows of luxurious Audis hide from the sun under a canopy of solar panels on the north edge of Calgary, but it’s not the sun that poses a threat to these cars.

The 933 solar panels on this lot produce 306,000-kilowatt hours of power, about 60 per cent of the dealership’s yearly energy needs, and also protect the cars from the frequent hail storms that pummel the region each spring and summer and result in millions of dollars of damages for property and car owners.

As a result, the covering of solar panels here generates both power revenues and insurance savings for the Audi Royal Oak dealership, which was the first to install a solar canopy in Canada, though other dealerships in Southern Alberta – dubbed “Hailstorm Alley” by insurance companies – have since followed suit.

“I had to come up with hail protection,” said Murray Dorren, the owner of the dealership, adding that in 2013 a hailstorm hit and he had to make a $3 million claim. “It was disgusting. The next day, I had no cars to sell.”

Now, he said, with the solar canopy generating power and making him eligible for an insurance rate cut, he expects to pay off the solar panels in 10 to 11 years, which makes the solar panels cheaper than other options dealerships are considering.

An AMA Insurance report this month showed Alberta accounts for 51 per cent of all storm related damage claims in Canada including $5 billion in damages from storms since 2010. A similar 2017 report from Desjardins Insurance found that due to the disproportionately high number of claims in the province, homeowners have experienced 20 per cent increases in premium policies.

Sol Power Projects Ltd. director Tod Petersen said, depending on how the deductibles in the insurance policies are structured, he’s seen dealerships in the area reduce their annual premiums by 75 per cent. His clients have also told him they’ve reduced their deductibles from $400,000 per occurrence to $75,000 per occurrence.

“I think it pushes them over the line in terms of the economic justification,” Petersen said of the lower insurance premiums, though he said the costs for solar panels have also fallen sharply in recent years and the energy source has therefore become more economically viable.

Sol Power installed the solar panels at Audi Royal Oak, at a Honda dealership south of Calgary and expects to do more in the coming years. The company is also installing solar panels on the roof of a parkade at another local Toyota dealership, which was recently built to keep the inventory safe from hail.

The solar canopies in Calgary exemplify a broader trend within the solar power business. Companies are looking for inventive ways to repurpose existing land – some of which might have few other obvious uses — to fix their power costs by installing solar panels to generate renewable power. The installations allow landowners to generate income from land that would have otherwise been underused or sat idle.

For example, Ireland-based DP Energy has proposed turning a contaminated former fertilizer site in an industrial yard in southeast Calgary into Western Canada’s largest solar farm, with 1,576 solar panels generating 25 megawatt hours of electricity annually. Another solar project has been proposed on land reclaimed from a coal mine near Hanna, Alta.

The trend of using brownfield sites for solar installations has also played out around the world, with solar power being generated, including at the site of former Soviet nuclear disaster Chernobyl in Ukraine, and at former coal-ash ponds in the U.S.

Mining giant BHP Group Ltd. has been working on plans to turn former mines in the States into solar and storage facilities, repurposing previously used land. Closer to home, Vancouver-based Teck Resources Ltd. is invested alongside the city of Kimberley, British Columbia in the SunMine solar power project, which sits atop an old mining site.

The ability to repurpose industrial sites or under-utilized commercial sites shows that solar panels “can solve other types of challenges” beyond just producing renewable energy, said Canadian Solar Industries Association president and CEO Wes Johnston.

“When you have a brownfield site, there’s not a lot of other things you can do with the land,” he said. “We’re seeing a lot of engineers being more creative in deploying the technology.”

Solar panel manufacturers are also developing new innovative projects – like solar windows, solar roofing tiles, solar window shades, floating solar projects and wind/solar hybrid generators – that will also boost the adoption rate of solar power in Canada and elsewhere, said Johnston.

In many cases – like the car dealerships using solar panels to reduce their insurance costs – the economic case for installing solar panels on brownfield sites can be stronger than it is on a greenfield site. Rather than paying property tax on contaminated land sitting idle, for example, companies are looking to solar power to generate revenue from the sites.

We’re seeing a lot of engineers being more creative in deploying the technology

Still, the solar power industry faces some challenges, from concerns about shifting government policies towards renewable energy and amortization periods for paying off high up-front costs of solar power installations.

On the cost side, University of Calgary research fellow Sara Hastings-Simon said prices for solar photovoltaic panels have fallen dramatically as they’ve become more widely developed.

The cost of solar PV module have fallen by around 80 per cent since the end of 2009, while wind turbine prices have fallen by 30–40 per cent, according to the International Renewable Energy Agency.

Hastings-Simon is also director of Business Renewables Centre Canada, which is affiliated with the Pembina Institute, and is working to connect businesses that want to install renewable power generation on their lands with industrial customers looking for to use renewable power in their operations.

“One of the question that always comes up is, ‘If solar and wind has gotten so cost competitive, then why don’t we see a ton of it being developed all over,’ and the challenge there is no longer a technological one but it’s a financing model one,” she said.

As a result, she said the goal of the Business Renewables Centre is to connect companies looking to purchase renewable power directly from potential developers on a longer-term, fixed price. The fixed price, she said, is necessary for a renewable power provider to get the financing necessary to proceed with a project in a deregulated market like Alberta, where power prices can fluctuate wildly.

In the U.S. major companies like Starbucks, Facebook, Cargill and even ExxonMobil Corp. have entered into contracts directly with renewable power developers. Alberta’s previous NDP government signed one such agreement earlier this year to install solar panels on government buildings at a fixed price of $48 per megawatt hour.

Sol Power’s Petersen said the continued reduction in solar power costs is leading to wider adoption and more work for his company, including from landowners or business owners looking to protect their inventory from the elements.

“I think there’s an early adopter phenomenon,” Petersen said, adding that since the first installation of solar panels at the north-Calgary Audi dealership, “there’s certainly been a lot more uptake.”