Exponential Growth in Solar Industry as Hydropower Becomes ‘Less Reliable’

Renewable energy solutions have shifted recently as solar energy production experiences exponential growth, driven by increasing reliability and advancements. This is rooted in response to the declining dependability of hydropower, which is impacted by climate variability and environmental changes. According to the International Energy Agency, the reliability of hydropower is expected to decrease by approximately 10-15% over the next decade in regions experiencing heightened climate instability. In contrast, the photovoltaic industry has demonstrated resilience and scalability. Data from the SEIA highlights that global capacity increased by 23% in the past year alone, with Canada’s top solar companies contributing to this surge. 

The Shift from Hydropower to Photovoltaics

Climate Variability

Hydropower generation is highly sensitive to changes in precipitation and water flow. Climate change-induced alterations in precipitation patterns increased evaporation rates. Shifts in snowmelt timing have also led to reduced river flows and inconsistent water availability. The World Bank’s 2023 report highlights that by 2050, up to 50% of existing hydropower facilities in regions experiencing severe climate variability could experience diminished performance.

Sedimentation

The sediment accumulation in reservoirs reduces water storage capacity and affects turbine efficiency. Sedimentation rates have increased due to intensified soil erosion linked to deforestation and land-use changes. Studies have shown that sedimentation can decrease hydropower output by up to 30% over a facility’s operational lifespan.

Environmental Impacts

Hydropower projects can disrupt local ecosystems, alter riverine habitats, and affect aquatic species. These ecological impacts have led to increased regulatory scrutiny and opposition from environmental groups.

Impact on Canada’s Renewable Energy Goals

In 2023, the country generated over two-thirds of its electricity from renewable sources, with hydro making up most of that total. However, its growing unreliability is now becoming a challenge to meeting national goals. According to BloombergNEF (BNEF), Canada is the second cleanest producer in the G20, but continued disruptions in its production could jeopardize this position.

Increasing Pressure to Deploy Other Renewables

BNEF analyst Derrick Flakoll noted that falling production creates pressure to deploy other renewable sources and storage. The Canadian government has set ambitious targets for 2030, aiming for a 39.5% increase in wind capacity and a 179.4% leap in its capacity.

How About in Photovoltaics?

Technological Advancements

The development of bifacial solar energy solutions, which capture sunlight on both sides of the panel, has improved yield by 10-20% compared to traditional monofacial panels. Moreover, innovations in thin-film and multi-junction cells have pushed the efficiency of commercial panels beyond 22% in the industry.

High-Efficiency Panels	Monocrystalline silicon cells now achieve 20-22% efficiencies, while multi-junction cells stack multiple layers of PV components can exceed 40%.
Thin-Film Technologies	Choose Cadmium telluride and copper indium gallium selenide, as they are flexible, lightweight, and lower production costs.
Perovskite Cells	Promising due to their high efficiency and low production costs. They achieve efficiencies of over 25% and are being explored for commercial use.

Scalability and Flexibility

PV panel installation systems can be deployed in residential, commercial, and utility-scale configurations, with modular designs for incremental capacity expansion. Incorporating lithium-ion and flow batteries has further enhanced their reliability and dispatch ability.

Lithium-Ion	Widely used due to their high resource density, long cycle life, and decreasing cost. Commonly seen in residential and commercial panel systems to provide backup power and manage supply and demand.
Flow	Vanadium redox and other flow batteries offer scalable, long-duration storage solution. Useful for utility-scale projects because they provide stability and grid support.

Economic Factors

The International Renewable Energy Agency discloses that the global levelized cost of electricity for solar panel technology has decreased to $30 per megawatt-hour (MWh). This is attributed to advancements in manufacturing processes and economies of scale in PV systems.

Environmental Benefits

Clean power generation produces no greenhouse gas emissions during operation and has a lower environmental footprint than hydropower. The lifecycle carbon footprint of a panel system is 40-60 grams of CO2 equivalent per kilowatt-hour (gCO2e/kWh), lower than that of hydropower, which ranges between 20-100 gCO2e/kWh.

Increasing Pressure to Deploy Other Renewables

Falling production creates pressure to deploy other renewable sources and storage. The Canadian government has set ambitious targets for 2030, aiming for a 39.5% increase in wind capacity and a 179.4% leap in its capacity.

The Exponential Growth

Large-Scale Farms

In regions such as Prince Edward Island (P.E.I.), Canada, PV installations have experienced exponential increases. However, this dynamic changed drastically with the commissioning of two large-scale farms: Summerside’s Sunbank and the Slemon Park Microgrid.

1. Sunbank is a 21.6 MW farm that supplies power directly to Summerside Electric.
2. Slemon Park Microgrid added another 10 MW to the grid. Together, these projects have contributed to a more than fourfold increase in monthly solar technology production, from 1,475 MWh in 2023 to over 6,000 MWh by April 2024.

Rooftop Installations

Between 2021 and 2023, rooftop capacity in P.E.I. grew from 10 MW to 39 MW—an increase of 290% in just two years to install solar panels. Reduced panel costs, government incentives, and increased awareness of economic and environmental benefits from renewable energy companies drive this surge.

Seasonal and Weather Considerations

Summers in P.E.I. are characterized by long daylight hours. Conversely, winters experience shorter daylight periods and lower irradiance. However, the dark-coloured PV panels warm up under sunlight, even in winter, preventing long-term snow cover. As a result, PV solutions are still viable during the colder months, albeit at reduced levels.

Diversification and System Reliability

P.E.I. has relied on wind power for its renewable needs and reducing energy costs, producing 30% of its electricity from wind in 2023. The Island has diversified its portfolio by integrating sun-powered systems from solar energy companies.

Challenges in Scaling Photovoltaic Production + Solutions

Land Use Constraints

Large-scale photovoltaic (PV) projects require significant land, but finding suitable locations is a challenge, especially in regions like P.E.I., where agriculture, housing, and nature preservation compete for space. As land becomes scarce, future projects may struggle to expand. Solution: To address land constraints, developers can focus on dual-use projects, such as agrivoltaics, where panels are installed alongside crops to optimize land use for power production and agriculture. Rooftop solar installations and floating PV farms can also offer alternative solutions that don’t require large expanses of land.

Intermittency and Grid Stability

Sun’s power intermittency can strain the electrical grid, especially in regions with high sun penetration. Battery Energy Storage Systems (BESS) help smooth fluctuations, but backup generation and grid upgrades are still necessary. Solution: Grid operators can integrate smart grid technology to improve stability and efficiency, while hybrid solar systems combine photovoltaic with other renewable energy sources (e.g., wind or hydro) to generate electricity.

Export and Local Grid Limitations

Reliance on imported electricity limits how much locally generated solar power system can be integrated or exported. Expanding the local grid’s capacity is critical for future growth. Solution: Investing in grid infrastructure upgrades will enhance the capacity to handle local PV power and reduce reliance on imports. Microgrid systems and distributed energy resources (DERs) can also improve local resilience and energy independence by allowing more efficient power distribution.    

Securing a Sustainable Future

As hydro becomes vulnerable due to climate-induced variations in water levels, sun-powered technology has been a catalyst for the reliability of Canada’s renewable infrastructure. With advancements in photovoltaic technology, the integration of BESS, and the rapid expansion of large-scale farms, it is positioned to take center stage in meeting the country’s clean goals. MAG Solar supports Canada’s transition to a more resilient and sustainable future. Our personalized solar installation process can help you avoid rising energy costs and reduce your energy bills.