Solar Trends in CanadaLinking Demand to the Supply Chain

Presented to the Canadian German Chamber of Industry and Commerce, Inc.

David Eisenbud, Chair of the CanSIA Board February 18, 2010

Canadian Solar Industries Association (CanSIA)

2

National Trade Association- Represents over 400 + solar organizations throughout

Canada- Represents firms active in Photovoltaic, Solar Thermal

Water and Thermal Air segments of the market

Mission and Strategic Objectives - Strengthen the Canadian solar industry; - Develop and expand solar markets;- Remove market barriers;- Strengthen labour force training and expertise; and,- Improve awareness and understanding of solar viability

across Canada and internationally

Where we stand…Canada’s Energy Reality

Energy / Electricity Governance Provincial jurisdictionFederal NO National Renewable Energy Plan

Natural Resources RichOil & Gas remains a key economic driver Challenge to convert to renewable energy action

Significant Nuclear Agenda Large uranium deposits + CANDU technology

Electricity CostRelatively inexpensive (i.e. Hydro)

Energy Security NOT a concern3

Solar Works in Canada!

4

5

Solar Can Help Meet the Challenge

Solar is scalable and growing- Solar combined with other smart grid technologies can meet 100% peak load growth

- 2000MW Nuclear plan = billions in construction cost; 10-15 years to in-service; payback over 40yrs

- Transmission infrastructure required for nuclear capacity- Distributed technologies built incrementally, avoids over/under building

Solar can be complementary with Nuclear

- Combined with demand response, solar is as predictable as a fossil fuel peaking plant - At higher penetrations, combined with storage/load control is 100% reliable

Solar is predictable

- Multi-tiered approach brings value to otherwise underutilized assetsBrownfields, airports, wastewater treatment facilities, public lands, parking lots, agricultural lands are excellent sites for solar parksAcres of new and existing rooftops in urban areas to meet local demand (in US over 2 billion sq. ft. of new roof installed annually*)

Solar space is available

6

Solar Can Help Meet the Challenge

Solar can help reduce need for distribution capacity investment to meet future peak growth- Ideal for installation right at customer’s site in large urban areas i.e. behind-

the-meter- Does not negatively impact environment/wildlife

- Summer Peaking capacity at maximum to meet summer demand- Distributed Power built incrementally, avoids over/under building

Solar works best when Canada needs it most

Solar WILL create green jobs- Navigant Study 28 new jobs per MW – 14 direct; 14 indirect- Job creation tends to be local

Solar Project deployment requires a mature supply chain

A rising commitment to Canadian clean energy

7

2. US-Canada Clean Energy DialogueElection of Obama (i.e. Renewable Energy platform)U.S. Energy Security (i.e. Canada viewed as domestic)Canada likely to follow US lead in Copenhagen

3. North American Cap & Trade System 4. Smart Grid Infrastructure

Ontario Green Energy Act5. Green Jobs for New Economy6. Principal support for renewables eminates from

provincesOntario Green Energy Act, Solar BC

1. Canadian Solar IndustryIndustry in transition…From smaller scale to larger scale projects/players

PHOTOVOLTAIC TRENDS

8

PV – Global Supply/Demand Snapshot

9

Major Components (% of PV System)

10

Canada Solar PV Industry Growth

2009

SOLAR THERMAL TRENDS

12

Solar Thermal Industry Approx. 100% growth in 2008* Federal Incentives ended 2007 / reinstated 2008 Federal Residential Pilot Projects starting in 2009

* Preliminary findings from NRCan survey for 2008

Solar Thermal – Hot Water

14

ST Adoption Rates – Too low for Canada

15

Germany

Canada

Solar Thermal Incentives & Support

Federal IncentivesResidential Solar Water Heating Pilot ProgramecoEnergy Renewable Heat ProgramecoEnergy Home Retrofit Program Home Renovation Tax Credit (expires Feb, 2010)

Provincial IncentivesMatching Federal ecoEnergy Renewable Heat and Home Retrofit Programs (Ont, BC, Sask, NS)Various rebates, etc.

Additional Provincial SupportSolar BC (100,000 Roofs Program)Ontario Solar Thermal Task Force Ontario Green Energy Act (100,000 Roofs Program)

Turning the corner...Expanding Solar Markets

Doing Solar Business in Canada

Strategic Location (Gateway to N.A.)Close proximity to more mature eastern U.S. solar markets (NJ, PA, MA, MD, NY, FL, NC)Transportation links to major N.A. markets (CA, Southwest US)

Emerging silicon production Emerging thin film opportunities Low manufacturing input costs Qualified labour force Provincial funding support, market advantage

AMIS, NGJFGreen Energy Act Domestic Content Policy

National Perspective...Future Challenges National Renewable Energy Policy

Tax Incentives? Loan Guarantees? Government Solar Procurement?

National Climate Change PolicyRenewable Portfolio Options?

US-Canada Energy/Environmental Dialogue Getting Ontario FIT Program Right!!

No start / stop and long-term program stability (investment certainty)Adequate transmission capacity allocation across industry providersMinimum project realization bureaucracy to maximize near-term economic benefits

Solar Workforce Development Strategy100% solar employment growth over next 3 years

ST Product CSA CertificationBalance costs and time against codes/standards/consumer protection

Ontario…Challenges Going Forward

Ongoing Stability and LongevitySending the right signal to the marketplace

Renewable Energy Approval ProcessStreamlined regulatory approval process

Domestic Content RequirementsImpacts International and non-Ontario companiesPoison pill for investorsFIT Program: 50% Increase to 60% by Jan 2011MicroFIT: 40% increase to 60% by Jan 2011

Agricultural Lands Restriction Remove unnecessary barriers to solar deployment

Developing Industry Capacity

SUPPLY CHAIN OVERVIEW

21

22

Wafer Solar Cell Solar Panel System $/WIngotPolysilicon

Value Chain Cost Distribution

20%30%

50%

Solar System Cost Allocation by Category (US-2006 figures)

Solar Energy Value Chain

Heavy ManufacturingEngineered Material Handling SystemsCustom Production MachineryIndustrial Process Supplies

23

Wafer Solar Cell Solar Panel System $/WIngotPolysilicon

Process ManufacturingCustom Production Machinery

Lab and testing materials

Semiconductor Supplies

Glass

Light ManufacturingMetal fabricationElectrical Systems ComponentsPower System Design/EngineeringProject Installation Miscellaneous Supplies & Services

Silicon – Raw Materials Silicon – Processing Implementation

Renewable Energy Jobs Impact:

Germany: May 2008: 40,000 created in PV industry alone

... Feed-in tariffs have made Germany a solar powerhouse that employs 40,000 people in the solar industry alone, and an estimated 140,000 jobs in renewable energy

US: Obama Signs Economic Recovery Legislation; Solar Industry Poised to Create 110,000 Jobs over Next Two Years….solar energy provisions in this bill will help create 60,000 jobs in the solar industry in 2009 alone and a total of 110,000 over the next two years,”Rhone Resch - SEIA.

Canada: Green Energy Creates Jobs “Proposed New Act Would Result in 50,000 New Jobs in three years.” Premier Dalton McGuinty

24

Examples of Solar-related Green Jobs1

Solar Power (Thermal) & Photovoltaic (PV) Systems – Harnessing the power of the sun

Solar Development and ManufacturingSolar Fabrication TechnicianSolar Lab TechnicianSolar Hot Water Heater Manufacturing TechnicianPV Fabrication and Testing Technician

Solar Installation and MaintenanceSolar Energy System InstallerSolar and PV Installation – RooferSolar Residential Installation – ElectricianSolar Commercial Installation – ElectricianICE Technician – Instrumentation/Controls/Electrical SystemSolar Commercial Installation – Engineering TechnicianSolar Electrical Foreman

Solar Engineering, Design & Project ManagementSolar Energy Systems DesignSolar Thermoelectric Plant ManagerSolar Operations EngineerPV Solar Cell DesignerSolar Energy EngineerPV Power Systems Engineer (Electrical)

Solar Sales & MarketingResidential/Commercial Solar Sales Consultant

25

More Information Available:

Environmental Defense Fund

THANK YOU!

26