Lessons for the US in Canada’s Solar Energy Failure:

Lessons for the US in Canada’s Solar Energy Failure: A Market-Driven Approach to Sustainable Tech Adoption

By Dr. Doug Milburn, Co-Founder and Chairman of Advanced Glazings

The transition to sustainable energy sources is crucial in our fight against climate change and in reducing dependence on fossil fuels. However, the approach to achieving this transition—whether driven by government mandates or market forces—has been widely debated. The Canadian government’s failed attempt to mandate the adoption of solar energy in the late 1970s offers a valuable lesson that is particularly relevant today as we grapple with similar challenges in the adoption of technologies like electric vehicles (EVs). While the adoption of sustainable technologies is essential, Canada’s solar energy experiment suggests that market-driven adoption is more effective than government mandates.

The Canadian Solar Energy Experiment: A Case Study in Government Overreach

In the late 1970s, during an energy crisis, the Canadian government initiated ambitious programs to promote solar energy, such as the Purchase and Use of Solar Heating (PUSH) and the Program of Assistance to Solar Equipment Manufacturers (PASEM). The goal was to create a self-sufficient solar industry in Canada, supported by over $125 million in funding (in 1978 dollars) for solar-thermal research and industry development.

However, these programs were plagued by administrative confusion and delays. Newly formed companies were overwhelmed by the extensive feasibility studies required by the PUSH program. By 1982, only $35 million of the allocated funds had been spent, and the solar industry was struggling to compete with conventional energy sources. When government funding was cut in the mid-1980s, the Canadian solar industry collapsed, with many companies going bankrupt or shifting to other industries. This failure illustrates the risks of relying on government mandates for technological adoption.

Parallels with Today’s Sustainable Tech Challenges

Today, we see similar challenges with the adoption of EVs and other sustainable technologies. Governments worldwide are eager to accelerate the transition to cleaner technologies through mandates and subsidies. However, as with Canada’s solar energy experiment, these efforts risk being undermined by an overreliance on government intervention.

The adoption of EVs has been slower than anticipated, despite generous subsidies and stringent emissions regulations in some regions. High costs, limited charging infrastructure, and concerns about battery life and range contribute to consumer hesitation. Moreover, the push for EV adoption has faced resistance from industries and consumers, leading to uneven adoption rates.

Is the EV story just that this technology doesn’t work? No, but there’s a risk that when you push adoption before the market is ready, the backlash you create will prevent it from ever gaining acceptance. The perception becomes so mired by the botched forced adoption rollout that even when the technology vastly improves, it’s virtually impossible to recover.

The Case for Market-Driven Adoption

The Canadian solar energy experiment and current challenges with EV adoption highlight the importance of letting market forces drive the transition to sustainable technologies. While government incentives can support early-stage technologies, the market must ultimately determine which technologies succeed. Market-driven adoption ensures that technologies are developed in response to genuine consumer demand and economic viability, rather than political mandates.

As outlined in Jeffrey Moore’s book “Crossing the Chasm,” new technology adoption is driven by consumer psychographics. Early adopters embrace innovation, while laggards resist until it becomes ubiquitous. Market forces, including testimonials and social intelligence, play a critical role in this process.

For instance, the EV market is already driving innovation in battery technology, charging infrastructure, and vehicle design. Companies like Tesla, which focus on creating desirable products that meet consumer needs, have driven EV adoption without heavily relying on government mandates. As the EV market grows, competition increases, leading to further technological advancements.

The Role of Government in a Market-Driven Transition

This is not to say that the government has no role in transitioning to sustainable technologies. Rather, the government should focus on creating an environment that supports market-driven adoption instead of mandating it. This can be achieved through policies that promote innovation, reduce barriers to entry, and encourage competition.

For example, the government can invest in research and development to support early-stage innovation without picking winners and losers. Policies like carbon pricing can level the playing field for sustainable technologies by internalizing the environmental costs of fossil fuels, making cleaner alternatives more competitive. Additionally, the government can support infrastructure development, such as EV charging stations, to facilitate the adoption of sustainable technologies.

However, the government should avoid overregulation and mandates that distort the market and create artificial demand. The failed Canadian solar energy experiment serves as a cautionary tale. The perception created by botched forced adoption could backfire, setting the movement back exponentially. It’s crucial to resist the impulse to over-legislate, allowing market forces to guide the adoption naturally. Otherwise, there’s a risk of killing the very thing you love.

In conclusion, while adopting cleaner technologies is vital for addressing climate change and reducing reliance on fossil fuels, the experience of Canada’s solar energy experiment shows that government mandates and subsidies are not the best way to achieve this goal. Instead, we should allow market forces to drive the transition to sustainable technologies, with the government playing a supportive role in creating conditions for innovation and competition. By learning from the past, we can build a sustainable future driven by consumer demand and economic viability, rather than political mandates.

About Dr. Doug Milburn

As a long-time entrepreneur and innovator, Dr. Doug Milburn thrives on solving problems. For more than 35 years, he has brought his vision and passion to manufacturing, engineering, software development and process engineering. Throughout his leadership, Dr. Milburn has aimed to create great workplaces by shaping a company’s success through corporate values and ethical guidelines. Born and raised in Nova Scotia, Canada, Dr. Milburn earned his undergraduate and master’s degree in physics at Mount Allison University, before finishing his studies with a PhD in mechanical engineering at the University of Waterloo. In 1995, Dr. Milburn and his wife Michelle co-founded Advanced Glazings, which developed and manufactures SOLERA® light diffusing glass, which enables architects to create beautifully daylighted buildings that are incredibly energy efficient.