By Henry (Hank) Trim
Solar energy seems poised to become a major player in the world of energy. Years of investment have brought down the price of photovoltaics and innovative financing methods have generated unprecedented growth in the industry. According to the Canadian Solar Industries Association solar electric is the fastest growing source of energy in the world.The future of solar is bright! No pun intended.
This is not the first time solar technology has seemed poised for success. In the late 1970s solar heating appeared ready to sweep across Canada. In fact, the federal government launched a multibillion dollar commercialization program and Alistair Gillespie, then the Minister of Energy, Mines, and Resources, promised that a solar industry would provide jobs for thousands of Canadians.
In a series of posts over the next four months, I will explore the meteoric rise of solar heating in the 1970s and its fall in the 1980s. Solar heating’s story highlights the complexity of energy markets and energy policy and it illustrates how energy experts thought about the future and made critical decisions the basis of their best guesses in the 1970s. Energy analysts in government and industry still struggle with the challenges of uncertainty and contentious politics as they attempt to chart and control our energy future. Today’s photovoltaics still rely on these experts’ projections of the future.
The oil embargo of 1973 inaugurated today’s complex energy market. The Organization of Petroleum Exporting Countries (OPEC), led by Saudi Arabia, embargoed western countries in retaliation for their support of Israel in the 1973 Yom Kippur war. Oil prices spiked as reductions in supply and speculation drove prices to double the then quadruple. Oil, the foundation of the world’s energy supply, no longer seemed safe.
At the same time as the oil shocks disrupted markets, economists, engineers, and scientists began to use their growing abilities to model and analyze the world’s complexity. Searching for a way to understand energy, government and industry analysts applied these models to energy questions. In fact, discussions of energy quickly became debates over supply and demand projections, depletion rates, and forecasts of potential discoveries sprinkled with references to billions of barrels and megawatts of electricity.
Huge scale, long lead times, and global volatility made these forecasts both a necessity and a headache for companies and governments. Having some idea about what to expect, where to invest your time and money, and what new technology or energy source might reshape the energy future became a full time occupation for legions of industry and government analysts in the 1970s. Accurate predictions or not, the demands of the industry and the payoffs of backing the right idea has keep them scanning the horizon ever since. Canada’s solar boom in the 1970s was just one product of the ongoing search for energy futures.
Far from an energy superpower, Canada had not yet developed the oil sands. Nor had it begun to extract oil from the Grand Banks or fully explore the arctic for oil and gas. Nonetheless, the Canadian government saw great potential in the oil industry in the early 1970s. The government’s Energy Plan for Canada forecast rapid growth as new reserves were discovered and the oil sands finally came on line. In 1973, just before the embargo, analysts stated these developments would provide Canadians with jobs and tax dollars for decades.
Three years later the government admitted the oil shock had thrown its “energy-policy planning and other social and economic” goals into disarray. There were two reasons for this disarray. First, in the 1970s the Canadian oil market functioned as two separate and heavily managed markets. West of the Ottawa River, Canada relied on Alberta oil, which before the OPEC embargo was more expensive then imported oil. East of the River, Canada relied on imports. The 1973 shock destroyed this system. In 1974 a new oil program attempted to strike a balance between western producers, who wanted to sell their oil at rising world prices, and consumers (particularly in central Canada’s industrial heartland) who wanted to keep low fuel costs. To allow prices to rise, subsidies were applied to imported oil. When oil prices continued to rise, it destroyed the federal government’s balance sheet. This created a strong incentive to find a substitute to oil.
The second cause of disarray further complicated matters. In 1974 energy experts brought further bad news. They decided their previous sunny forecasts of Canadian oil and gas potential had been far too optimistic. Experts now forecast that the country would run short of conventional oil by the mid 1980s unless the industry made substantial breakthroughs in extraction. This meant that Canadians and their government had to start preparing for a world of energy scarcity and rising prices. Although these forecasts turned out to be wrong, they shaped policy throughout the 1970s.
Canada’s energy future became a political issue in 1975. Pierre Elliott Trudeau’s Cabinet decided that it needed to respond to the criticism that “Canada [has] no national energy policy” and no idea how to respond to the energy crisis. Cabinet demanded that the Department of Energy, Mines, and Resources “guide “aggressive government policies directed at increasing supplies, reducing demands, and …encouraging inter-energy substitutions” according to Cabinet memos. The federal government quickly launched new programs and the Department published a new Energy Strategy for Canada in 1976 that made decreasing energy use and replacing oil with other forms of energy a central goal. Scientists, entrepreneurs, and environmentalists saw this growing desperation as an opportunity. Perhaps, they thought, renewable energy’s time had finally come.
Hank Trim is a SSHRC postdoctoral fellow at the University of California, Santa Barbara. This is the first in a four part monthly series on the rise and fall of solar energy in the 1970s and 1980s
 “Roadmap 2020: Powering Canada’s Future with Solar Electricity,” Canadian Solar Industries Association, last modified August 20, 2015, http://www.cansia.ca/sites/default/files/cansia_roadmap_2020_final.pdf.