How Canada can Transform its BTM Solar Market to Meet Electricity Demand in a Net-Zero Pathway

Challenge: To achieve its net-zero 2050 targets at the lowest cost, net-zero pathways studies that include behind-the-meter (BTM) solar conclude that Canada must significantly increase adoption of this technology.

Solution: The Canadian Renewable Energy Association (CanREA) engaged Dunsky to develop a BTM solar market outlook to identify the level of intervention needed for BTM solar to support our net-zero targets. To do this, we modeled solar potential in Canada across three scenarios with varying levels of policy support.

Impact: Our report provides the first comprehensive national outlook for BTM solar in Canada, and offers policymakers and industry reliable data and policy options on how to grow market uptake of BTM solar between 2023 and 2050 to help the sector achieve its full potential.

Three Modeled Scenarios

To develop this comprehensive market outlook, our team worked with CanREA to develop three scenarios that reflect different levels of policy support for BTM solar. These scenarios were:

• Business-As-Usual (BAU): Current policy commitments such as the Greener Homes program, Investment Tax Credit (ITC), Accelerated Capital Cost Allowance (CCA) and provincial/municipal programs across the country.
• Expanded Financial Support (BAU+$): Expanded policy support through additional and expanded financial support through federal, provincial and municipal incentives and access to low-cost financing options.
• Market Transformation (BAU+$ + Transformation): Expanded policy support through additional financial support, market transformation efforts through permitting and interconnection process enhancements, and mandates for solar deployments on newly constructed homes.

Our report concludes that only the Market Transformation scenario (BAU + expanded financial support + Transformation) helps BTM solar achieve a level of adoption of 2-4% of total electric demand, which is the required contribution to support our net-zero pathways targets.

Extended Benefits of BTM Solar Expansion

In addition to reducing GHG emissions and supporting Canada’s net-zero targets at a lower cost, our report concludes that the expansion of BTM solar as seen in the Market Transformation scenario would bring significant additional benefits. These include:

• Reducing energy bills for homeowners and businesses that adopt BTM solar (including low or no interest financing to provide more equitable access to BTM solar),
• Various benefits to the electricity system, such as offsetting generation capacity needed for system reliability in summer months and reducing peak demand and minimizing the need for transmission and distribution projects,
• Significant local job creation in areas such as engineering, installation and sales.

Policy Considerations

The report concludes that in order to achieve the Market Transformation scenario, Canada requires quick and concerted efforts from different actors, including governments (provincial, federal and municipal), electricity industry stakeholders (utilities, system operators, regulators) and BTM solar industry actors (developers, industry association).

To accelerate this transformation, the report identifies 10 areas for policy intervention and action:

As Canada progresses towards a net-zero grid, BTM solar can play an important role. The data and recommendations presented in our report offer opportunities for clear, holistic and consistent objectives that can unlock the potential and full value of this market and help put Canada on track to meet its ambitious emissions targets cost-effectively.

To learn more about this study, please read the executive summary using the button below (full report is available only to certain CanREA member level organizations).

About Dunsky Energy + Climate Advisors 

Dunsky supports leading governments, utilities, corporations and others across North America in their efforts to accelerate the clean energy transition, effectively and responsibly. With deep expertise across the Buildings, Mobility, Industry and Energy supply sectors, our team of 50+ professionals supports clients in two ways: through rigorous Analysis (of technical, economic and market opportunities) and by designing or assessing leading Strategies (plans, programs and policies).