Introduction
There has been a growing need worldwide for alternative energy solutions to that of the traditional fossil fuel and mined coal. The need for sustainable renewable power sources can be attributed to the growing concern over the state of the area in which we live. Global warming is fast becoming the modern time's biggest threat to human life. Solar energy is one of the best answers to the energy problem that the world is currently facing. Solar power harnesses the energy from the ultraviolet rays emitted by the sun and converts it into electric energy. The determinants of the success of this form of energy include access to sunlight, the time of year, latitude and season. If all these conditions are such that there is a favorable amount of sunshine, then the amount of energy derived is at a maximum level. People can get free renewable energy for domestic and industrial use.
Canada has been leading in adopting solar energy as an alternative source of renewables. The country is now among the top ten nations to install solar PV in homes. The installed PV generates about 2GW of power for the state's homes and industries. There is a growing trend in the popularity and use of solar panels in places of work and residence all over Canada. There are varied reasons why Canada has sought to adopt solar power as a source of energy, and this paper will aim at analyzing the factors behind the growing demand and the policies put in place to govern the act (Armentrout and Armentrout, 23).
Canada has mostly been associated with a heavy dependence on fossil fuel along with having a widely unregulated electricity policy that was also emissions-unfriendly. These factors had put Canada under the global microscope with more and more developed countries sought to reduce their global carbon footprint. Canada has responded by implementing solar panel projects nationwide, increasing to over 140GW installation of PVs countrywide. Canada is cleaning up its energy in a big way, thus providing an exciting area of study.
This paper will be divided into various parts. The first includes a review of the current literature available on solar as a form of energy, the adoption of the same in Canada and its impact on the economy and global carbon emissions. The second part will seek to analyze and describe the available data on Canada's energy policies. Data will be described using demand estimation models considering regression output and results. There will be a summary of all the data collected and of the whole paper as well where the trend of the request for solar energy will be given.
Literature Review
Solar energy is the power that is harnessed from the sunlight and converted into electric power that can be used for cheap and clean energy within homes and industries. There are four types of solar energy used in the stated places: photovoltaic cells (PV), solar thermal, passive & active and concentrated panels. PV cells are the most commonly used forms of solar panels by homes and small industries. PV cells convert sunlight into electricity through silicon-based solar panels (Paehlke, 23).
Canada’s history of solar energy use was mostly concentrated on non-electric uses such as water and space heating. In the early 2000s, there were no more than 12,000 homes with solar water heating panels and 300 commercial industries. The solar energy resources of the country were mainly centered on southern parts of BC, Ontario, Prairies, and Quebec. The FIT program initiated in Canada, which was aimed at reducing the country's carbon emission, started a change within the country that has seen the use of Solar panels increase over the years.
Canada is now among the top countries that have installed solar panels installed in both commercial and residential buildings. The country boasts of a 14GW electric supply derived from solar panels. The rate of growth in the use of solar technology saw a 58 percent rise in consumption between 2011 and 2012. Canadian Solar Industries Association has laid out aggressive plans to increase the country’s use of solar panels to account for 20% of the total energy output (Parks, 10)
The adoption of solar energy in the country has been met with a lot of resistance. The biggest issue is changing the people's perspective on energy. Most people are ignorant of the need to obtain a renewable source of energy as opposed to the heavily used fossil fuels. The country has been blessed with abundant energy sources including fossil fuel that most of the government policies are tuned to supplying the fuel to citizens cheaply. The government supports the fossil fuel sector, and this has posed a challenge in the adoption of solar energy which has less funding and support.
Canada is also a northern country that receives little sunlight throughout the year as compared to other countries that want to achieve the same objectives of reducing carbon emission. The citizens of the country view the installation of solar panels as more of a luxury than a necessity. The subsidized fossil fuel available in the country is heavily subsidized by the government making them a cheaper acquisition than solar panels. The problem with such a situation is that the hunger for fossil fuels might one day surpass supply of the same. Solar power offers a great alternative because there is nothing quite as free and easily available as sunlight. Solar panels may be more expensive to install but in the long run, they provide a better return for the money. There is need to establish policies that favor the adoption of alternative sources of energy such as solar. The success of the adoption of solar energy can be mostly felt in rural and remote places. These areas are the main beneficiaries of the extensive solar plants that have been set up in the country over the past decade. These remote places can receive a constant electric supply that caters for all the household needs.
Data
This study will collect data on various variables affecting the adoption of solar energy in Canada, and a regression analysis will be conducted to determine the relation between the various dependent and independent variables. The regression model will be used to evaluate the demand for solar panel installations across homes and businesses in Canada. The independent variables will include the price of PV solar panels, the price of traditional fossil fuels, interest rates and income of the people. The independent variable in this regression model will be the demand for solar panels.
The price of PV solar panels is an important factor in the adoption of solar technology in any country. The main problem facing the adoption of solar energy in most developing as well as developed countries is the high installation prices of panels. Many people feel that solar panels are more of a luxury than a necessity given the high price one pays to purchase and install them. Data is collected on the average installation price in the country. The price is denoted by β2.
The price of other fossil fuels is an important variable in determining the need for solar panels in Canada. The country of Canada has enjoyed abundance in the supply of fossil fuel. The government has heavily subsidized the price of oil and other fossil fuels making these products cheaper for the common citizen. The low price of fossil fuel has served to decrease the popularity of solar energy as an alternative means of energy for most people in the country. Β3 denotes the price of other fossil fuels in the equation.
The income of the people, therefore, sets a tone for the number of people that can afford the installation of solar panels in the country. Canada has one of the best performing GDP over the years making the country an averagely high-income country. The average social class in Canada is the upper-middle class which accounts for over 56% of the country's total population. Β5 will denote the 5income.
Interest rates determine the consumer’s behavior by decreasing or increasing borrowing and spending within the country. This variable will be denoted byβ4.
Data on the policies set up that govern solar energy in Canada will also be done. The data collected will be used to show the shortcomings and advantages of the country's policymakers. The results of this will be included in the summary.
General linear demand estimation for solar energy:
Q demand = a + bPV+ cFE+ di+ eY
a= constant value
b= coefficient of the price of solar PV panels
c= coefficient of the price of traditional energy
d= coefficient of interest rate
e= coefficient of income
The formula is applied to the data on the country’s recent statistics in the price of PV installation, the price of fossil fuel, the average income and interest rates. A relationship is made between the independent variables and the demand for solar energy.
Model Summary
Regression Values: Demand vs. GDP
Regression values: Demand vs. interest rate
Regression values: Demand vs. Price of Panels
Regression values: Demand vs. Price of Traditional forms of electricity
Linear Solar Demand Equation
Linear equation of Price of PV panels against demand
Q = 2.91 -2.67b
Linear equation for demand and price of traditional energy
Q =2.91 – 5.78 c
Linear equation for interest rates and demand
Q = 2.91 – 1.67d
Linear demand equation for income
Q = 2.91 – 15.60
The various types of demand formulae can be compounded into one model through which the relationships between the various variables are established.
Q demand = a + bPV+ cFE+ di+ eY
Ln version of linear demand equation for solar energy
lnQ = 183.27 – 2.67 PV– 5.78 FE + 1.67 I – 15.60 Y
LN Solar Demand for Canadaresidential=183,270-2,91Price of Pv Panel -5.78Price of Traditional Electricity+1.67Interest Rate -15,60Real GDP per capita
Results Summary
The demand estimation method chosen for this model is used to forecasting the future prices and demand for solar panels installations in Canada. In any regression model, there need to be estimates of t-test and p-values to assess the statistical significance of the parameters being tested. In this case, the demand estimation model is represented by a demand function that assesses one variable while keeping others constant to observe the effect it has on the demand for solar energy.
Many factors affect the demand for solar panels in Canada. These factors include the price of installation, the price of traditional sources of energy, the income per household and the interest rates. Relations are made between these factors, and the results are as follows.
Price of PV Panels
There is a strong relationship between the prices of PV panels to their demand. One unit rise in the price of PV will lead to a -2.91 on the demand for solar panels. Price is a crucial factor in determining the demand for a commodity, and this case remains true for solar panels. PV panels are not only expensive to purchase but also to install it. Any increase in the price of one will lead to a substantial decrease in demand.
Price of Traditional Fuel Sources
The availability of a cheaper source of energy tends to reduce the demand for solar energy demands in the country. One unit rise in the price of traditional fossil fuel sources increases the need for solar energy by +5.78 and a reduction in the same translates to a similar drop in demand.
Income
One unit increase in the GDP of the country leads to a 15.60 increase in the demand for solar panels. An increase in income means more families and businesses can afford buying and installing solar panels
Interest Rates
The interest rates are a big factor on the adoption of solar energy in any country. There has been a positive relation determined between interest rates and demand for solar panels. A unit decrease in interest rates will lead to a +1.67 in the request of solar panels. Low-interest rates encourage borrowing and spending. More people can afford to buy and install panels in their homes.
Policies
There are currently three federal programs that govern the implementation of alternative energy sources. These are Eco ENERGY for renewable heat, renewable power, and retrofit programs. The policy for renewable heat has seen the investment of 36 million dollars into encouraging industries to adopt solar energy for thermal solutions in the business place. The policy for renewable power seeks to offer residents and homes with cheaper ways of fitting alternative sources of energy within the home. The retrofit program holds a 200 million dollar kitty that is used to help homes renovate and establish more efficient energy sources in their homes (Zaida, 17).
Conclusion
Many factors affect the demand for solar panels in Canada. The country has made great strides in becoming a world leader in solar power consumption. The factors that play a big role in the adoption include the price of PV, price of fossil fuels, the country’s GDP and the interest rates. The government is doing its part in encouraging the adoption of this policy through government legislature that encourages the same.
Works Cited
"90-day delinquency rate (%) and GDP in Canada, 2007-12: Canada." (2014): Print.
Armentrout, David, and Patricia Armentrout. Solar Energy. Vero Beach: Rourke Pub, 2009. Print.
Paehlke, Robert C. "Canada: Solar Energy a Northern Variant." Environment: Science and Policy for Sustainable Development 21.9 (1979): 5-42. Print.
Parks, Peggy J. Solar Power. San Diego: ReferencePoint Press, 2010. Print.
STATS. "Electricity Rates by Province." N.p., 2016. Web. <http://www.ontario-hydro.com/electricity-rates-by-province>.
Zaida, Kamaal R. "Solar Energy Policy in Canada: An Overview of Recent Legislative and Community-Based Trends." Journal of Environmental and Sustainability Law 17.1 (2009): n. pag. Print.
