Renewable energy: good for the world, better for
the bottom line
Monday, October 2, 2000
By Dwane Wilkin
Christian Vachon dropped all the green
slogans from his spiel two years ago, when it finally
dawned on him that people who buy clean energy really
don’t care about the environment.
“The bottom line is money,” says Vachon,
an engineer whose Canadian company, Enerconcept
Inc., sells and installs renewable solar and wind
power systems in southeastern Quebec. “That’s
the kind of world we live in.”
Pious-sounding homeowners who take the time to
indulge a twinge of guilt about global warming still
call on Vachon sometimes. He used to spend hours
with them, reciting the virtues of renewable energy,
only to watch their gusto wilt with the price tag.
These days, Vachon hands customers a brochure
and sends them on their way. “When we talk
business, we never talk about the environment,”
The search for clean alternatives to fossil fuels
has held Canada’s public imagination for more
than three decades, yielding some remarkable technologies
since the early days of the ecology movement. But
they haven't produced much in the way of sales.
So the pitchmen and the pioneers of the clean
energy trade have shaken themselves from the dream
of greening the planet with good intentions.
Forget about pollution and climate change; the
masses aren’t interested. To make it in the
renewables business you’ve got to sell your
solar to Big Business.
And industry is slowly warming up to renewable
energy, — not because it’s good for
the environment, but because it’s good for
the bottom line.
“Energy efficiency and environmental management
systems in general are increasingly being taken
as a measure of good management in financial markets,”
says Rebecca Last of the Canadian Environmental
Last points to an index of publicly traded companies
kept by the U.S. bond-rating agency Standard and
Poors. The list is called the sustainability index.
“That list of companies has significantly
outperformed counterparts who didn’t make
the sustainability index,” she says. “So
there really is recognition in financial markets
for companies who perform well on the environmental
Four years ago, the Canadian multinational company
Bombardier installed the world’s largest industrial
solar air heating system at its Canadair plant in
St. Laurent, Quebec, using a technology called Solarwall
made by Conserval Engineering Ltd. of Downsview,
The US$1.65 million price tag for the solar panel
retrofit at Canadair was US$171,000 higher than
the conventional alternative, but annual fuel savings
of US$90,000 resulted in a simple payback period
of 1.7 years.
Automakers Ford Canada and GM Canada have also
installed solar air heating systems as have smaller
companies such as rugmaker Beaulieu Canada in Farnham,
Some farmers have begun using the technology to
dry their crops. Enerconcept’s Vachon, who
is flogging the Solarwall systems to industrial
clients in the Sherbrooke region, says, “The
biggest barrier’s ignorance. It’s rarely
Architects and engineers, conditioned by the prevailing
conservatism of the building industry, have been
slow to appreciate renewable energy technologies,
he says. “But now I think we’re staring
to reach a critical mass.”
Sixteen companies are using the solar wall technology
along a 150-kilometer corridor between Montreal and
Sherbrooke, said to be the densest region of industrial
solar panel installations in the country.
According to government figures, the renewable energy
industry produced about US$600 billion worth of goods
and services last year, mostly in sales of hydro-electric
power, which may not fit every environmentalist’s
definition of a renewable resource.
Still, with more than 200 companies nationwide and
a workforce estimated at 4,000, members of Canada’s
renewable and alternative energy sector say clean
power is an economic dynamo just waiting for someone
to throw the switch. The difficulty is politics.
“It’s now an accepted concept in environmental
areas, but it is not yet an accepted concept in the
energy department, that if you use filthy energy that
pollutes the world, you should pay more than me,”
says Bill Eggertson, president of the Canadian Solar
Eggertson and others from the renewable energy industry
complain that competing with conventional energy is
made more difficult because of Canada’s tax
regime, which he says favors fossil fuel exploration,
big hydro development and nuclear energy for political
He’d like to see a special carbon tax or some
other fiscal measure that would help “level
the playing field,” but acknowledges that there’s
a very strong counterlobby to it — oil-rich
Not to mention leagues of angry truck drivers and
ordinary citizens who are already clamoring for cheaper
fuel as Canadians head into another winter of rising
So, businesses are expected to take the lead toward
low-emission, efficient energy systems.
Compared with conventional fossil fuels and hydro-electric
power, alternative energy systems can be very expensive
to install, and the payback in future savings comes
much sooner to large-scale consumers than to private
“As a country we’re blessed with low
energy costs,” says Deirdre Heatherington, an
energy analyst with Natural Resources Canada. “So
the average consumer doesn’t have the monetary
incentive to switch.”
A case in point is solar water heaters. Few homeowners
are willing to shell out thousands of dollars upfront
for a water heater that could save them US$240 a year
in electric bills at current energy prices.
When it comes to solar generating capacity, the
difference in cost is even more dramatic. It is estimated
that a kilowatt of electric-generating capacity using
solar electric panels, called photovoltaic or PV energy,
currently costs about US$7. A kilowatt of hydro-electric
generating capacity, by comparison, costs about US$1.
PV sales, though growing, are limited to niche markets,
at least for now. Nonetheless, the solar electric
industry shows a growth rate of 30 percent for the
past six years, primarily in off-grid gas, telecommunications
and remote residential markets.
A society blessed with cheap energy can be a curse,
especially if you happen to be peddling a pricey substitute
without comparable brand recognition or distribution
“Most Canadians don’t understand an
energy source that doesn’t have a flame attached
to it,” Eggertson says.
No wonder the greatest share of energy consumed
in Canada — 88 per cent of it — still
comes from burning non-renewable oil and natural gas.
While hydro-dams churn out nearly two-thirds of all
electricity in the country, the second most important
source of electric power in Canada is carbon-based
Coal-fired plants provide the lion’s share
of electricty in Alberta and Saskatchewan and not
insignificant amounts in Ontario and the Maritime
Alternative energy sources other than hydro, on
the other hand, account for just 2 percent of all
electric power generation in the country.
Analysts say one large factor that continues to
hobble the development of the renewable energy industry
is its fragmentation. A slew of competing and often
complementary technologies exist, but none enjoy a
very high profile in the marketplace.
According to the Earth Energy Society of Canada,
for instance, there are 30,000 ground-source heat
pumps in operation across the country, one of the
cheapest and cleanest forms of year-round heat, hot
water and air conditioning available. But installation
costs hover between $10,000 and $15,000 for an average
home, “which is a sticker shock that blows most
Canadians away,” admits Eggerston.
Still, Eggertson believes the renewable energy sector
is primed for growth, especially in light of rising
conventional fuel prices and the fact that Canada
is running out of time to meet her own modest goals
for reducing greenhouse gas emissions. “This
is the best time of our life,” he says.