Canadian Solar PV Sector:

Market Forecast 2013-2018 - Q2, 2013 -

Prepared by ClearSky Advisors Inc.

© ClearSky Advisors Inc. 19-Jul-2013

Executive Summary

Ontario is currently, by far, the largest solar PV opportunity in Canada due to its feed-in tariff program which is

expected to award or complete a total of over 3 GW of contracts over the next several years. Although Ontario will

continue to be the largest opportunity for the foreseeable future, industry players are increasingly looking to other

provinces to diversify their business and seek out new opportunities. In order to inform decision makers about the

prospects and intricacies of the Canadian market, this report covers the policies, fundamentals and market

potential of Ontario as well as all other Canadian provinces.

Overall, visibility within the Ontario market has improved and after several years of uncertainty some

stability has been injected into the market

o The overall risk of investing in the Ontario market has fallen, but some uncertainty still remains

o Industry players will need to understand these sources of uncertainty such as the WTO ruling,

political issues and program changes in order to effectively navigate the industry

It is expected that several provinces outside of Ontario will develop PV incentive programs during the

forecast period (2014 – 2018)

o Under both the Expected and High Case scenarios, the combined annual installation volume for

provinces other than Ontario will approach or surpass Ontario’s annual installation volume

The fundamental and political drivers within each Canadian province are markedly different

o This report provides insight into the political forces, policies and market fundamentals which will

drive PV installations in each province over the next five years

Canadian Opportunities

In order to show the opportunities available for PV in Canada, the following attractiveness matrix was developed

by combining all of the relevant factors which contribute to a strong market environment. Each province is ranked

on each of the six criteria which are then combined to give the overall PV market attractiveness score. Also included

in this report is the information used to inform this matrix and the detailed results.

Canadian Market Forecast

Although Ontario currently dominates the majority of PV installations in Canada, it is expected that the other

provinces will cumulatively begin to rival the annual amount of installations occurring in Ontario by the end of the

forecast period.

Ontario

Significant changes have occurred to Ontario’s FIT program over the past year which has caused ClearSky

Advisor’s forecasts to increase

o 900 MW of new micro FIT and Small FIT contracts will be awarded between 2014 and 2017 which

has increased the forecast past 2014

o The WTO ruled against the province’s domestic content regulations which has introduced

uncertainty into the regulations which will govern future rounds of applications

o The Large FIT contracting process will be replaced by a RFP process for future rounds of

procurement

Given these changes, ClearSky Advisors expects that 2795 MW of solar PV will be connected in Ontario

between 2013 and 2019, but as this report demonstrates, the range of possible installation volumes varies

widely depending on several key factors

Ontario’s peak demand for solar PV will occur in 2014 and early 2015 when the majority of Large FIT

projects are slated to be installed

The long-term viability of the Ontario PV market, beyond the procurement goals which have already been

announced, is subject to the province’s review of the Long Term Energy Plan which is set to be reviewed by

the end of 2013

0

200

400

600

800

1000

1200

2014 2015 2016 2017 2018

An

nu

al M

W In

sta

lle

d

Annual Canadian PV Installations (2014 - 2018)

High Case

Expected Case

Low Case

Ontario Market Forecast

Our analysis considers three scenarios to forecast market development. These differ based on future contract

awards, project attrition rates and the province’s approach to the Long Term Energy Plan.

Western Canada

It is expected that the provinces in Western Canada will provide some of the strongest growth

opportunities outside of Ontario

o The market potential scenarios show that British Columbia, Alberta and Saskatchewan are all at

a point where even modest incentives will drive noteworthy PV installation volumes

o Several of these provinces are considering and/or developing PV incentive programs

o Manitoba, on the other hand, has an abundance of clean hydropower and is not expected to be a

major PV market in Canada

Quebec and Atlantic Canada

Although Quebec currently does not have a large amount of PV installed, the market potential scenarios

show that incentives could drive utility scale installations in the province

Individually, the four Atlantic provinces do not represent a large market opportunity. Taken together,

however, they may cumulatively represent some modest opportunities.

o Nova Scotia, in particular, has a track record of promoting renewable energy and is considering

expanding its COMFIT program to solar PV

o New Brunswick also shares a similar potential as Nova Scotia, although there is currently no policy

support in the province

2,000

2,500

3,000

3,500

4,000

4,500

2014 2015 2016 2017 2018 2019

MW

dc

Ontario PV Cumulative Forecast (2014-2019)

High Case

ExpectedCase

Low Case

Canadian Solar Demand Outlook 2013 - 2018

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