The Town of Banff give will businesses and residents a financial incentive to plug into solar.
On Monday (Feb. 23), council unanimously approved an incentive program to support installation of about 26 rooftop solar photovoltaic panel systems, making the Town of Banff the first municipality in Canada to offer what is essentially a feed-in-tariff program.
The Town will use $300,000 from its environmental reserve to fund the program, which will be administered by way of a lottery to be held in April.
The program will require qualifying homeowners to pay for the installation of the solar system, and then they would receive a top-up payment over the next seven years, based on a formula, to help make solar investment more affordable.
Officials say the idea of the incentive program is to try to show people that installing solar PV panels on their rooftops isn't just the environmentally correct thing to do, it can be financially viable over time.
“It's new territory so we don't know how popular this will be,” said Chad Townsend, the Town of Banff's environmental manager.
More than 80 per cent of Alberta's electricity is generated using non-renewable fossil fuels, primarily coal. Energy consumption is Banff's largest source of greenhouse gas emissions.
With the help of legal counsel, administration has drawn up a Clean Local Energy Accessible Now, or CLEAN contract. The contract allows homeowners with solar installations to received fixed revenue for the solar energy they produce, giving them more certainty and making the payback on their investment much shorter.
The CLEAN contract is a mechanism that allows municipalities in Alberta to effectively make a feed-in tariff – or fixed rate for energy produced – available to residents. Under Alberta's deregulated electricity market, a municipality can't directly implement a feed-in tariff as has been done in Germany, Ontario and Florida, for example.
Municipalities can get the same basic result by providing contracts to solar energy owners for set rates for energy they produce, and recovering the funding from franchise fees, so the program is funded by electricity consumption and not by tax revenues.
Prices for solar PV systems are expected to continue to gradually fall, but softer costs of solar PV systems, such as installation costs and processes to tie into the grid, remain higher and prove a barrier for many people to make upfront investments.
In Banff, typical investment for a residential home would be about $13,600. This system could generate about $500 worth of power a year and the municipality will provide about $1,400 a year, subject to a number of specific criteria.
The investment will be paid off in seven years, and every year thereafter, the homeowner will make about $500, based on the existing price of power.
“Homeowners want energy choices, but the economics are just too far apart right now,” Townsend said.
“This is rewarding residents with money from our environmental reserve, not taxes.”
A solar PV system has no minimum requirement of hours to work, and will generate power even on cloudy days, as long as the panels are not shaded by trees or other structures.
Local research shows wind is not a viable way to produce energy in Banff, but solar potential across southern Alberta is high, especially when compared to international solar leader Germany, and Ontario, where production incentives already exist.
“Germany is one of the world leaders in the deployment of photovoltaic panels, yet they don't have nearly as much annual sun as we do,” Townsend said.
Councillor Stavros Karlos voiced support for the program.
“We are the first community to do a solar top-up. Cool,” he said. “There are variables, for sure, because there's no market experience on this.”
The lottery will be held in April.
Karlos said there would be no extensions on the lottery.
“This isn't a commercial development lottery. I don't want to be in a situation where we're going to give extensions to people,” he said. “You win the lottery, you build it. And if you don't, it expires right away.”
Installation of rooftop PV systems on homes and commercial buildings will need to go through Banff's development review process.
Banff's environmental reserve is funded though an electrical franchise agreement with Fortis Alberta for the distribution and delivery of electricity within the townsite. As part of this, the Town levies a fee for use of municipal lands.
Banff is already leading the way among Alberta municipalities in capturing solar power.
There are 14 panels on the Wolf Street washroom and the Banff Community High School has 50 panels.
In addition, there are 72 panels on Town Hall – the largest PV installation in the Bow Valley – generating an estimated 17,109 kilowatts per, which is the equivalent to power needs for at least three Banff households a year.
“It doesn't power the building,” Townsend said. “But there were a few days last year where we were actually feeding back into the grid.”