The Canada solar energy market is poised for significant growth, with an expected increase of USD 2.25 billion and a CAGR of 23.9% by 2029. This growth is driven by various factors, including government initiatives supporting renewable energy, increasing adoption of pay-as-you-go (PAYG) models, and the need for cleaner energy solutions to meet Canada’s net-zero emissions goals. Despite facing challenges such as competition from alternative energy sources and high installation costs, solar energy is becoming an integral part of Canada’s renewable energy mix.
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Solar energy is playing an increasingly vital role in Canada’s transition toward a low-carbon future. As a renewable energy source, it not only contributes to reducing greenhouse gas emissions but also helps in lowering dependency on traditional fossil fuels like coal. Photovoltaic (PV) systems are the primary technology used in solar energy production, efficiently converting sunlight into electricity. Given the growing adoption of solar energy, especially in rural communities, solar power is gaining traction as a viable solution to reduce reliance on fossil fuels such as diesel.
The Canadian government is committed to achieving net-zero emissions by 2050 and has implemented numerous incentives and subsidies to encourage the adoption of solar energy systems. These efforts are expected to continue fueling the market’s growth over the forecast period.
The Canadian solar energy market is segmented by the following factors:
Government Support: Canada’s government is a strong proponent of solar energy, offering subsidies, tax benefits, and financial incentives to encourage the installation of solar energy systems. These initiatives are crucial to reducing the country’s reliance on fossil fuels and meeting climate change goals.
Pay-As-You-Go (PAYG) Model: The growing adoption of PAYG models is a key market trend. This approach enables consumers to pay for solar energy systems in installments rather than upfront, which makes solar power more accessible to residential users and communities with lower capital.
Environmental Concerns: The increasing awareness of climate change and the need for sustainable energy sources are pushing businesses and governments to seek cleaner, renewable energy solutions like solar power.
Despite its growing adoption, the solar energy market in Canada faces several challenges:
Competition from Other Renewable Sources: Although solar energy is gaining traction, Canada also has a strong mix of hydroelectric and wind power. The intermittency of solar energy, which depends on sunlight, poses a challenge in comparison to the more consistent availability of hydro and wind energy.
High Initial Costs: The upfront costs of installing solar panels and associated equipment remain high for many households and businesses, even with government incentives.
Grid Integration: Efficient grid connection and energy storage remain crucial to ensuring the stable operation of solar energy systems. This requires technical expertise and trained personnel.
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Several key players are driving growth and innovation in Canada’s solar energy market:
These companies are implementing various strategies such as strategic alliances, mergers and acquisitions, and geographical expansion to strengthen their presence in the Canadian solar energy market.
Neon’s 93 MW Solar Project: In January 2023, the French renewable energy developer Neon started the construction of a 93 MW solar project in Alberta, Canada. This project is slated for completion in 2024 and is expected to sell power through power purchase agreements (PPAs) and the electricity market.
TC Energy’s $146 Million Investment: In 2022, TC Energy Corporation announced a $146 million investment in an 81 MW solar project in Alberta, signaling growing investments in solar power across Canada.
PACE's Joffre Solar Power Project: The Joffre Solar Power Project in Alberta, a 47 MW development by PACE, is expected to commence commercial operation in 2024.
These recent developments highlight Canada's growing focus on increasing solar power capacity to meet its renewable energy goals.
The Canadian solar energy market is expected to grow significantly across various regions, with Ontario, Alberta, and British Columbia leading the way. Over the forecast period of 2025-2029, the market will continue to expand as technological advancements, government support, and the increasing push toward sustainability drive the demand for solar energy systems.
With significant investments and a clear commitment to renewable energy, Canada’s solar energy market presents ample opportunities for both local and international companies. The focus on reducing carbon emissions and increasing energy security will continue to shape the trajectory of this market in the coming years.
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