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A legislative model to regulate solar technology Cannon, Gerald William 1979

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LEGISLATIVE MODEL TO REGULATE SOLAR TECHNOLOGY by. GERALD WILLIAM CANNON B.A., The University of B r i t i s h Columbia, 1970 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS i n THE FACULTY OF GRADUATE STUDIES School of Community and Regional Planning We accept this thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA November 1979 (t) Gerald William Cannon, 1979 In presenting th i s thes is in par t i a l fu l f i lment of the requirements for an advanced degree at the Univers i ty of B r i t i s h Columbia, I agree that the L ibrary sha l l make it f ree ly ava i lab le for reference and study. I further agree that permission for extensive copying of th i s thes is for scho lar ly purposes may be granted by the Head of my Department or by his representat ives. It is understood that copying or pub l i ca t ion of this thes is f o r f inanc ia l gain sha l l not be allowed without my written permission. Department of Community and Regional Planning The Univers i ty of B r i t i s h Columbia 2075 Wesbrook Place Vancouver, Canada V6T 1W5 Date October 15, 1979 ABSTRACT This thesis develops and discusses a strategic model to regulate the solar technology industry, based upon the follow-ing arguments: 1) that solar technology w i l l be a major source of energy in the future, 2) that the nature of the solar industry warrants i t being regulated, • 3) that existing energy l e g i s l a t i o n is not suitable to be extended to the solar technology industry, and 4) that a strategic model gleaned from the radio and t e l e -v i s i o n l e g i s l a t i o n can be adapted to regulate the hypothesized solar technology industry. The amount of solar energy reaching the earth i s massive. The only thing stopping i t from being a ready source of supply is the conversion e f f i c i e n c i e s of the devices needed to make i t usable. As the economic and technical c h a r a c t e r i s t i c s of the solar industry improve, i t becomes more competitive with other sources. It i s highly l i k e l y that these c h a r a c t e r i s t i c s w i l l improve to the point that solar technology w i l l be one of the largest energy industries by the next century. The solar technology industry i s highly centralized. Major multinational corporations are very active in increasing their economic strength in this industry. Because Canada w i l l prob-ably face a market controlled by foreign multinational corpora-tions importing goods into this country, any national involvement can only come v i a regulatory l e g i s l a t i o n . National involvement - i i i -w i l l be needed because energy i s fast becoming a major p o l i t i c a l issue. Thus, i t i s l i k e l y that for reasons of p o l i t i c a l sover-eignty, Canada w i l l have to regulate the solar technology i n -dustry . The existing l e g i s l a t i o n i s not suitable to do this for two reasons. The f i r s t i s that although some of the l e g i s l a -tion at a general l e v e l conceptually includes solar technology, none of i t includes i t in a comprehensive manner. The second i s that the l e g i s l a t i o n for the energy sector is organized on an industry by industry basis. To structure l e g i s l a t i o n to cover this new industry, e n t i r e l y new acts are needed which w i l l follow the existing pattern and which w i l l serve this one industry. The most suitable model to do this i s that which functions within the context of the radio and t e l e v i s i o n l e g i s l a t i o n . This l e g i s l a t i o n has the c h a r a c t e r i s t i c of being s t r a t e g i c . This means there are d i f f e r e n t strategic approaches that government can take to regulate this industry. The value of this approach is that i t i s f l e x i b l e , allows e f f i c i e n t p o l i cy formulation, and is s t i l l subject to public accountability. The model formed i s a combination of the strategic structure of the radio and t e l e v i s i o n l e g i s l a t i o n and the conditions neces-sary to properly regulate the solar technology industry. This combination conceptually analyzed for v a l i d i t y and r e l i a b i l i t y and i t s positive and negative points are discussed with a view to evaluating i t s benefits to Canadian l e g i s l a t i o n . iv- -TABLE OF CONTENTS ABSTRACT . i i TABLE OF CONTENTS • iv LIST OF TABLES AND DIAGRAMS .v CHAPTER I - INTRODUCTION 1 CHAPTER II - SOLAR TECHNOLOGY - ITS POTENTIAL PRODUCTION AND USE • 4 Passive Solar . 5 Active Solar and Photothermal . . 7 Why Regulate? 10 The Structure of the Industry 13 CHAPTER III - THE EXISTING LEGISLATION . . 19 Federal Legislation .19 B.C. P r o v i n c i a l L e g i s l a t i o n 26 CHAPTER IV - THE RADIO AND TELEVISION REGULATION MODEL: AN ANALOGY 34 Technical Aspects 35 P o l i t i c a l Aspects 36 Economic Aspects 37 The Radio and Television Regulative Model 41 CHAPTER V - A LEGISLATIVE MODEL TO REGULATE THE SOLAR TECHNOLOGY INDUSTRY 51 CHAPTER VI - CONCLUSIONS . 76 FOOTNOTES 82 BIBLIOGRAPHY 85 LIST OF TABLES AND DIAGRAMS A Lines of Authority Within the Regulative Structure . . 42 B Radio and Television Regulatory System . The Strategic Alternatives A Representative L i s t of Relative Powers 48 C Solar Technology Regulation Model 57 D Model Components vs. Objectives : . . 70 CHAPTER I INTRODUCTION The objective of this thesis i s to develop a l e g i s l a t i v e model to regulate a l l aspects of solar technology. The purpose of the model i s to protect Canadian sovereignty by inducing s e l f - s u f f i c i e n c y in solar technology in the context of compre-hensive energy planning. Thus several arguments w i l l be pre-sented in favour of solar energy regulation. Regulation in this paper i s viewed as serving the strategic purpose of forcing public r e s p o n s i b i l i t y and accountability, as opposed to the view that regulation i s simply a means of exercising r i g i d central control. Regulation as a strategy may avoid the p i t f a l l of repressive rules. The model there-fore addresses the c r i t i c a l aspects of the industry and does not try to account for a l l d e t a i l s . The argument in favour of the regulative system being pre-sented here i s that energy as a c a p i t a l good (as opposed to energy including labour) i s becoming a p o l i t i c a l l y c r i t i c a l and scarce commodity in modern western economies. This condition is partly due to the fact that the energy sector i s controlled by a very few large corporations, that are becoming more i n t e r -national and less responsible to national, much less regional government concerns. P o l i t i c a l control at national or regional levels may thus become subservient to the needs of international corporations. - 2 -The development of a regulatory system w i l l proceed by examining the factors that relate to the solar energy industry, i s o l a t i n g the c r i t i c a l ones requiring regulation, and propos-ing a structure that accounts for them. The format of this investigation w i l l be to deal,with a number of questions that are generated when regulation is considered. These questions are: What are the s p e c i f i c c h a r a c t e r i s t i c s of the technology and the industry that j u s t i f y i t s being regulated and have a bearing on what the regulatory model should comprise? What i s the behaviour of a firm that i s regulated? What i s the nature of the o l i g o p o l i s t i c firm? How do the conditions of regulated firms d i f f e r from those of unregulated oligopolies? What is the state of contemporary l e g i s l a t i o n which might a f f e c t the solar technology industry? How must i t be revised to s a t i s f y the requirements of the proposed model? And f i n a l l y , what should the model be? The analytic approach used in this thesis has two phases. The f i r s t , the information presentation and model b u i l d -ing phase has two components. One i s the presentation of i n -formation derived from investigating the conditions surrounding the solar technology industry. The other is the abstraction of an analogous model from the radio and. t e l e v i s i o n l e g i s l a -t i o n , used because of s i m i l a r i t i e s between the technical and p o l i t i c a l conditions of the two industries. - 3 -The second, the evaluative phase, has four components. F i r s t i s to develop, on the basis of previously presented i n -formation, a concise argument for regulative l e g i s l a t i o n . Second, i s to develop a system of objectives which the regu-l a t i v e system should f u l f i l l . Third, is to adapt the regula-tive model of the radio and t e l e v i s i o n industry to the solar technology industry. Last, is to evaluate whether or not the model f u l f i l l s the objectives of the second component. The two c r i t i c a l factors in this approach are the v a l i d i t y of the analysis of the solar technology industry and the v a l -i d i t y of the f i t between the model c o n t r o l l i n g the radio and t e l e v i s i o n industry and the solar technology industry. The v a l i d i t y of the former can only be judged against the compre-hensiveness of the sources used and the accuracy with which these sources are presented. The v a l i d i t y of the l a t t e r i s to be tested by the second phase of the analysis. - 4 -CHAPTER II SOLAR TECHNOLOGY -ITS POTENTIAL PRODUCTION AND USE Solar Conversion Technology has the potential of becoming one of the major sources of primary energy. Solar energy f a l l -ing upon the earth's surface annually is 28 times the world t o t a l supply of f o s s i l fuels."*" In the temperate zones this i s an average of above 1500 BTU's per square foot per day or 21 2 watt/meter second squared. This i s approximately twice the 3 energy needed to heat and cool an average house. In more glo^ bal terms a major U.S. u t i l i t y , by converting the energy re-ceived on one square mile of ground at a conversion rate of only 4%, could meet i t s demand to supply almost half a m i l l i o n cus-tomers. The role of solar conversion technology i s to capture this massive amount of energy and convert i t into a secondary or usable energy source. There are three categories of solar energy conversion technology. They are photovoltaic, active thermal and passive thermal. Photovoltaic has a var i a t i o n c a l l e d photogalvanic which i s at present embrionic and of l i t t l e consequence to this thesis. The difference between the three forms is based upon technical differences in the c o l l e c t o r s . - 5 -Passive Solar Passive solar i s by far the simplest of the three forms. It functions on the basis of d i r e c t , as opposed to converted or in d i r e c t , use of solar radiation. It gains i t s name from the fact that i t does not ac t i v e l y convert the energy. This is op-posed to active solar which may convert the energy many times before i t i s f i n a l l y used. The uses of passive solar are limited to space heating and hot water heating. This l i m i t a t i o n must not be seen negatively as these two uses account for a s i g n i f i -cant portion of the t o t a l energy consumption. The concept of a passive solar system consists of the sun's radiation d i r e c t l y heating the a i r , or a s o l i d mass, or water in a pipe, and by the natural process of convection the a i r or the water transports the energy either to the place i t i s used or to a storage f a c i l i t y for later c i r c u l a t i o n through the system. There are two problematic aspects to passive solar technology. They are the nature of the materials used and the ar c h i t e c t u r a l 4 design of the building i t is being f i t t e d into. The natural absorptance and reflectance of materials used as well as the flow created by the design of the convection system are the factors that either make the system work or make i t f a i l . The s p e c i f i c technical aspects can best be demonstrated by reference to some examples. Reference w i l l be b r i e f l y made to solar s t i l l s and to a house b u i l t in Colorado. - 6 -Solar s t i l l s are devices to create d i s t i l l e d water by eva-poration and condensation. In solar d i s t i l l a t i o n the solar radiation travels through the glass or p l a s t i c that the s t i l l 5 i s made of and causes evaporation of water in a basin. The water vapour r i s e s and i s condensed on the p l a s t i c or glass which forms a temperature interface with the ambient ai r and runs down the glass surface to a c o l l e c t i o n basin. The impor-tant design considerations are the volume of the s t i l l , the slope of the glass or p l a s t i c , the adsorption and transmission q u a l i t i e s of the glass or p l a s t i c , the wetability of the glass or p l a s t i c and the deterioration rate of the glass or p l a s t i c . The l a s t three factors are important when considering regula-tion of a technology as there are standards that can be assigned to these q u a l i t i e s . Space heating in houses i s one of the most important a p p l i -cations of passive solar technology. An excellent example i s a c house b u i l t in the Colorado Rockies. The basic concept behind this p a r t i c u l a r design i s a convection passage way which c i r c l e s the house. On the southern face there i s a greenhouse through which the a i r r i s e s as i t i s heated. The heated a i r goes up on the roof and moves down a space between the outside and the i n -side roofs, f a l l s down the north wall to a crawl space under the fl o o r , across storage rocks and then up again. The house i s made of common materials and can accomodate any configuration of l i v i n g space. This basic concept of convected ai r (or water) - 7 -with a s o l i d mass storage i s common to a l l passive solar space heating. Variations in design are related to aesthetics and re l a t i v e material costs. Some, however, are more e f f i c i e n t than others. In this example temperatures of 64° F are main-tained at an elevation of 7000 feet, with ambient temperatures 7 below zero. A c r i t i c a l factor that denotes the success of these passive systems i s the e f f i c i e n c y of the heat storage system. Many kinds of materials have been used, such as water, rock, or s t e e l . Whatever the material, the two c r i t i c a l aspects are i t s mass per unit volume and i t s heat conductivity or the re-co v e r a b i l i t y of the heat. One study at the j e t propulsion lab in Pasadena found these aspects technically complicated by i s -sues such as thermal shock problems and the emergence of mul-t i p l e optimal operation strategies. Another study by Rockwell International investigated the use of inorganic oxide/hydroxides and found that chemical breakdown and reformation of compounds 9 can function b e n e f i c i a l l y in the storage process. As passive solar technology develops i t w i l l become evident that more com-plex materials are necessary. As solar technology becomes more important to society these materials w i l l have to be more sub-ject to performance standards. Active Solar and Photovoltaic Photothermal and photovoltaic are both active high order solar conversion technologies. They are both i n d i r e c t because - 8 -they convert solar radiation or photones into a d i f f e r e n t form which then becomes the form of energy used to heat or run things. For instance, photothermal-electric uses a l i q u i d which gains i t s heat by passing through the c o l l e c t o r ' s heat exchanger to become the primary source of energy. This l i q u i d then heats water into steam driving a turbine to produce e l e c t r i c i t y which is the secondary energy source. This type of scheme also holds true for solar furnaces and other large scale i n s t a l l a t i o n s , as well as photovoltaic c o l l e c t o r systems. In the case of photo-v o l t a i c c o l l e c t o r systems photons s t r i k e the photosensitive substance exciting the molecules to a higher quantum l e v e l , creating the primary source of energy. The excitation of the molecule i s dissipated by heat production or e l e c t r i c i t y pro-duction. The e l e c t r i c i t y production becomes the secondary source which i s then used. Photothermal c o l l e c t o r s can be divided into two categories. One i s the f l a t plate c o l l e c t o r , the other i s the concentrator f i t t e d or focusing collector." 1"^ F l a t plate c o l l e c t o r s are com-prised of a heat box which i s covered by a transparent cover. The back of the heat box i f made of a black material of some kind, that absorbs the radiation heating inside of the box. This heat i s absorbed by a f l u i d that passes through tubes placed in this box. The heated f l u i d i s then either stored in some thermal storage mass or i s used d i r e c t l y to heat hot water or a room via a heat exchange. Focusing c o l l e c t o r s have a - 9 -similar basic design but have added a focusing mechanism that concentrates the radiation onto a smaller area, giving higher temperatures. The concentrators can be made either of mirrors or lenses. Concentrators also serve to decrease the amount of radiation that i s l o s t due to r e f l e c t i o n . Very high concen-trations of energy are gained in this way. In some large scale focusing c o l l e c t o r s temperature levels are achieved that allow thermoelectric generation by steam turbines. In the case of solar furnaces, temperatures high enough to melt s t e e l are pro-duced. The primary problem to be considered when designing solar conversion devices i s to increase c o l l e c t o r e f f i c i e n c y . Pre-sently e f f i c i e n c i e s range between 20% to 50%. In one instance PJ an e f f i c i e n c y of 60% has been attained."'"^ Investigators have u t i l i z e d many factors to achieve t h i s . For instance, designers have contemplated complex o p t i c a l systems, analyzed absorption c h a r a c t e r i s t i c s of absorbers, and have calculated thermal sen-s i t i v i t i e s and refraction indices of materials. From their analyses complex alloys have been produced which have been de-positied as thin films using extremely d i f f i c u l t deposition techniques. Extremely delicate technical problems are solved requiring very expensive procedures. In short, solar conversion technology i s highly technical, expensive and c a p i t a l intensive. Solutions to problems related to i t are complex and complicated. - 10 -Photovoltaic i s a technology with similar problems. The photovoltaic response is created by photons s t r i k i n g a molecule and being absorbed by i t . The molecule, however, is unstable and returns to a normal state by giving o f f an electron. The materials that are able to do this are limited in number. They are both organic and inorganic but a l l are very d i f f i c u l t to manufacture in the quantity and quality required to produce usable energy. The e f f i c i e n c y of the c e l l s can be improved by various chemical and mechanical processes but these too are expensive and d i f f i c u l t to produce. In short, aspects of the production of photovoltaic conversion technology are also d i f -f i c u l t to produce, complicated and expensive. Solar conversion technology i s far beyond the competence of the average person, hence i s the domain of a few highly trained i n d i v i d u a l s . Why Regulate? A c h a r a c t e r i s t i c of solar technology that makes i t a can-didate for regulation is i t s economic position r e l a t i v e to other sources of energy. As of 1975 solar technology was not very economic. The c a p i t a l costs for photovoltaic for instance was $100.00 per watt. This compares to $150.00 - $300.00 per k i l o -12 watt for thermo-electric. These costs do not include running and maintenance costs which would s l i g h t l y improve solar ener-gy's r e l a t i v e long-term costs. New production methods are how-ever bringing the costs of solar much lower and much more in - 11 -lin e with other sources. Photovoltaic e f f i c i e n c i e s now range from 1 - 3 % for S i . C. and 12 - 18% for Si (wafers). 1 3 These e f f i c i e n c i e s are s t i l l t h e o r e t i c a l l y low. The the o r e t i c a l up-per l i m i t for inorganic photovoltaic i s 23% and much higher for organic. Photothermal on the other hand i s expected to be able to attain e f f i c i e n c i e s in the 70% range. If the two methods are combined and the photothermal part i s run on the energy not used by the photovoltaic part even higher e f f i c i e n c i e s are ex-pected to be produced. As this research process progresses the average kilowatt cost of solar are going to decrease d r a s t i c a l l y . While the cost of solar are decreasing the cost of other energy sources are increasing. The Science Council of Canada Report #27 suggests that there are no longer any economies of 14 scale to be gained from t r a d i t i o n a l Canadian energy supplies. Any demand increases w i l l then be translated into price increases. Projection of demand increases show a 3.5% increase 15 per year up u n t i l 2100 by which time i t w i l l become zero. In the mean time a l l projections indicate that both hydroelec-t r i c and hydrocarbon supplies are both going to increase in cost at the same rate. The Council predicts that the hydro-e l e c t r i c s h o r t f a l l w i l l be 20% and that by the year 2001 Canada 16 w i l l become dependent upon foreign o i l supplies. The argu-ment then i s that solar technology w i l l become a major supplier of energy when the costs of the t r a d i t i o n a l sources begin to get too high, adding impetus to the growth of the solar technology industry. - 12 -Added to this natural tendency of the r e l a t i v e costs of energy becoming more favourable toward solar i s the encourage-ment of ^solar research by many governments, including the Amer-ican and Canadian ones. In 1974 the U.S. Government passed l e g i s l a t i o n committing 600 m i l l i o n d o l l a r s of federal funds to 17 the research and development of solar energy technology. A goal of this program is to make solar technology economic enough to be able to supply 10 - 30% of the nation's BTU input by the year 2000 and 50% by 2020. In Canada the Federal Government 19 spent 4.4 m i l l i o n on solar technology research in 1977 and in 2 1979 the National Research Council spent four hundred thousand. There are numerous other examples spanning the globe from Aus-t r a l i a , Japan, France, and Russia. The underlying reason for this e f f o r t i s primarily p o l i t i c a l , as nations are becoming more concerned about their l e v e l of energy s e l f - s u f f i c i e n c y . Nations that control their energy supplies have a positive bargaining position with nations that do not because now that non labour energy i s more prevalent the a b i l i t y of an economy to function r e l i e s upon securing i t . Solar supplies are therefore seen as the method of gaining s e l f - s u f f i c i e n c y but this w i l l be so only i f a nation i s able to guarantee the amount of energy i t i s able to obtain from solar technology. In other words, i t has to be able to guarantee a high standard of technical performance from i t s solar units at a competitive l e v e l with that of other na-tions. This can only be done by regulating the technology in - 13 -terms of both i t s production and use because of the o l i g o p o l i s t i c structure. This need for regulation becomes even more c r i t i c a l i f most of the technology i s imported. From Canada's point of view this seems l i k e l y as the solar energy industry i s o l i g o -p o l i s t i c : i t i s a highly technical industry that i s c e n t r a l l y controlled outside the country and may be supplying a large per-centage of the national energy demand. The Structure of the Industry Photothermal and photovoltaic are complex technologies. Unlike most other solar technologies, this is not so much in the use as in the production and more p a r t i c u l a r l y in the re-search required for development. It i s the highly c a p i t a l i n -tensive complexity of the research that i s c r i t i c a l to the structure of the industry. The same applies to a lesser ex-tent to production. Silicone wafers, for instance, require a production process that i s as delicate and expensive as any other s o l i d state material production. The advantage of pursu-ing this d i f f i c u l t problem i s that there is a p o s s i b i l i t y of producing a source of energy with few maintenance costs and an extremely long l i f e . Each research breakthrough comes closer to this goal but each step i s laborious and small. Because of the slow accumulative progress only those who can finance ex-pensive processes over long periods can stay in i t long enough to reap any benefits. Therefore, the economics of development - 14 -d r a s t i c a l l y l i m i t the number of corporations that can be involved and, equally important, those who can stay involved. At the production l e v e l there are economies of scale which are equally highly c a p i t a l intensive. This w i l l further tend to l i m i t the number of corporations involved in the solar technology industry. The active solar conversion technology industry i s therefore the inevitable domain of a very few large scale cor-porations that can afford the development r i s k s and the produc-tion costs. It can therefore be argued that there i s a natural ten-dency towards market concentration on the supply side of the solar energy market. To bolster this speculation there already seems to be ample evidence that the major energy corporations are going to be the c o n t r o l l e r s of solar technology. This argu-ment i s based upon their present a c t i v i t i e s within the energy sector. David Howard Davis in "Energy P o l i t i c s " argues that energy i s a commodity highly related to both power and control in the economic and p o l i t i c a l senses, and that i t i s the nature of the energy sector that makes i t so. He states that the physical c h a r a c t e r i s t i c s of the fuel source allows the companies who 21 control them to be of a certain size range. For example, in past decades coal mining was labour intensive, allowing small firms to operate mines. The newer f u e l , o i l , on the other hand, required a more advanced technology and a greater amount of - 15 -c a p i t a l investment. This required larger, more powerful cor-porations to develop the resource. Recently, other factors such as geographic location and transportation methods have further promoted this concentration. Added to this i s the fact that there are economies of scale in o i l transportation; con-sequently even larger companies r e s u l t . Generally, the major market forces in the energy sector are towards concentration. Seven of the f i f t e e n largest multinational corporations are o i l 2 2 . . companies. There i s a growing suspicion that these companies use their power to manipulate markets to gain even more con-t r o l . Studies show that since 1955 there has been an increasing concentration of s e l l e r s in the energy sector. Coupled with this concentration i s a massive increase in energy prices and p r o f i t s . As these non-renewable high p r o f i t generating supplies become depleted and the demand for energy increases, the o i l companies are putting more of the excess c a p i t a l into the search for alternative supplies. As was pointed out previously, the search for these new sources of energy i s expensive and success can come only to those with the c a p i t a l to be able to take the long-term high r i s k s . The present structure of the interna-t i o n a l economy i s such that i t i s mainly the o i l producers who are in a position to do so. These companies have already diver-s i f i e d into o i l shale, coal and uranium, and there i s strong 23 evidence they are showing interest in solar. - 16 -The question arises as to why the o i l companies' invest-ment in solar guarantees they w i l l control solar technology. The answer l i e s p a rtly in the technical c h a r a c t e r i s t i c s of the development of solar technology and partly in the structure of the research and development industry. Research and develop-ment (R & D) i s no longer done by individuals c l o i s t e r e d in laboratories. It has become a highly organized a c t i v i t y de-signed to cause "the widespread introduction of new machines 24 into society." To accomplish this the organization of the R & D a c t i v i t i e s must be of a high order. Questions of econom-i c s , e f f i c i e n c y , and other organizational goals guide R & D ef-f o r t s . As a r e s u l t , productivity with regards to R & D e f f o r t s has increased. Solar technology has technical requirements such that only the large corporations have the proper R & D organiza-tion to be successful. Therefore, when the combination of large corporations possessing excess c a p i t a l and highly integrated R & D organizations join in developing a highly technical i n -dustry such as solar technology, i t i s l i k e l y that the concen-tration scenario suggested w i l l develop. A random selection of published research a r t i c l e s show such names as Sandia Labora-t o r i e s , Exxon and Rockwell . International appearing as or igi'natorjs or as the source of funding. There i s reason to believe that the supply side of the market w i l l become more concentrated as the world becomes more dependent upon solar technology. - 17 -In Canada the existing policy towards solar technology does not seem to have noticed this concentration process and no na-t i o n a l e f f o r t i s being made to counter i t . The present s i t u a -tion in solar technology is that the only s i g n i f i c a n t research is being done by large foreign owned Canadian companies. Fur-thermore, the d i s t r i b u t o r s of solar technology contribute to this concentration by d i s t r i b u t i n g foreign products. A recent a r t i c l e on e l e c t r i c cars l i s t s cars from It a l y , the U.S.A., and other nations; but not Canada. In fact, an o f f i c i a l of the Canadian Ministry of Energy is quoted as saying he has purchased an I t a l i a n car because there i s no Canadian i n i t i a t i v e in this 25 area. The Canadian e f f o r t has been to try to enhance decen-t r a l i z i n g c h a r a c t e r i s t i c s which have in the previous discussion been shown to be non-competitive. For example, 390 m i l l i o n d o l -l a r s of federal funds were funneled into a program to give small grants of up to tens of thousands of d o l l a r s to companies with successful solar designs. The grants were given after the com-panies had already made a c a p i t a l outlay. A t o t a l of 30,000 grants were made. The res u l t of this form of program i s a watering down of the Canadian R & D e f f o r t to a non-competitive position, leaving Canadian industry vulnerable to the interna-t i o n a l market. This e f f o r t does not take advantage of any of the conditions previously outlined which favour large corpora-tions. It i s this fact that i s p i v o t a l to the need for a reg-ulatory model for solar technology. - 18 -To summarize, there are p o l i t i c a l and technical reasons for regulating solar technology. The p o l i t i c a l reasons are derived from the need for nations to be energy s e l f - s u f f i c i e n t . Contemporary events attest to the s o c i a l d i f f i c u l t i e s that can resul t from not being energy s e l f - s u f f i c i e n t . S e l f - s u f f i c i e n c y , when applied to solar technology, does not only mean having devices upon the nation's s o i l . Because of the complexity of the technology i t means having some control over the technical standards covering the cost per unit of power as well as con-version e f f i c i e n c i e s . S e l f - s u f f i c i e n c y requires access to re-2 6 placement parts and control over c a p i t a l stock turnover. Thus, when the technology i s l i k e l y to be imported, then regu-l a t i o n i s required. Once this p o l i t i c a l need for regulation is established the technical need becomes evident. - 19 -CHAPTER III THE EXISTING LEGISLATION The previous chapter argued that a regulative model for solar technology i s necessary for p o l i t i c a l and economic reasons. It i s also argued that positive benefits are l i k e l y to be gained by regulation. To be discussed i s whether or not a regulatory model is currently in place within the existing l e g i s l a t i o n . If i t i s , then i t s adequacy must be considered. If i t i s n ' t , then one i s required. In either case a thorough analysis of the l e g i s l a t i o n (both p r o v i n c i a l and federal) covering the ener-gy sector must be made. In doing so, two pertinent issues must be investigated. F i r s t , (given existing l e g i s l a t i o n ) can a solar technology industry be regulated within the terms d i s -cussed previously? Second, what are the j u r i s d i c t i o n a l boun-daries of the hypothetical new l e g i s l a t i o n ? Federal L e g i s l a t i o n A reading of the l e g i s l a t i o n covering the energy sector gives an ambiguous understanding of how i t functions- as a com-prehensive regulatory system. A br i e f h i s t o r i c a l sketch can shed some l i g h t on why this i s so. The l e g i s l a t i o n creating the National Energy Board in 1959 was i n i t i a t e d by the c r i s i s surrounding the building of the Trans Canada Pipeline. The stimulus for the l e g i s l a t i o n was, 1) charges of p r o f i t e e r i n g - 20 -in construction, 2) the p o l i t i c a l climate surrounding the change in federal government, and 3) a general concern about the un-27 certainty of future o i l supplies. Because the l e g i s l a t i o n was generated by a c r i s i s , i t s point of view only relates to the one industry involved in the c r i s i s . During debate on the b i l l , t h is view was reinforced. One speaker noted that the various types of energy supply have very d i f f e r e n t c h a r a c t e r i s t i c s re-quiring d i f f e r e n t types of l e g i s l a t i o n . For this reason he ar-gued the b i l l should be limited in scope to the type of energy 28 concerned. The res u l t was a b i l l with wide-ranging, compre-hensive intentions, in the sense that i t refers to energy in generic terms but with very narrow terms of reference. Other federal l e g i s l a t i o n has a similar c h a r a c t e r i s t i c . There are implications for a comprehensive regulatory model v a l i d for a l l energy supply industries; but these f a l l far short of any comprehensive substance. There are six federal acts con-cerned with energy in a substantial way, each dealing with a d i f f e r e n t aspect of the energy sector. The d i v i s i o n s of author-i t y negate the p o s s i b i l i t y of a comprehensive regulatory struc-ture. For example, one act, "The Resources and Technical Sur-29 . veys Act 1966-67" , deals s o l e l y with the right of the Depart-ment of Energy, Mines and Resources to do technical surveys. Another example i s "The Gas Inspection Act". 3^ It states the terms of reference for reading gas meters which are the devices - 21 -used to set charges for the use of gas. These acts are so nar-rowly focused that they are of l i t t l e value in o v e r a l l p olicy development. An act that demonstrates the notion argued in the Pipe-l i n e debate, that each industry in the energy sector i s in need 31 of s p e c i f i c regulation, i s the "Atomic Energy Control Act". This act demonstrates that one single energy industry i s so com-plex and c r u c i a l that i t requires its.own l e g i s l a t i o n . The remaining acts are more general, but they s t i l l retain the c h a r a c t e r i s t i c of r e l a t i n g primarily to one industry. The acts in question are "The Department of Energy, Mines and Re-32 33 sources Act", "The National Energy Board Act" and "The Ex-port and Import Permits Act 1953^1954". 3 4 The act respecting the Department of Energy, Mines and Resources i s a short one which authorizes the formation of the department. Only one of the f i v e clauses in i t i s of any s i g -nificance to solar technology. It i s section four, which de-fines the duties of the minister: "The duties, powers and functions of the Minister of Energy, Mines and Resources extend to and include a l l matters over which the Parliament of Canada has j u r i s d i c t i o n , not by law assigned to any other de-partment, branch, or agency of the Government of Canada, re l a t i n g to (a) energy, including energy development from water (b) mines and minerals and other non-renewable resources (c) technical surveys within the meaning of the resources and technical surveys act r e l a t i n g to any matter other than a matter to which the powers, duties and functions of the minister of the environment extend by law." - 22 -What this means i s that the federal minister responsible is the Minister of Energy, Mines and Resources and any new l e g i s l a t i v e structure must be b u i l t around that fa c t . "The Export and Import Permits Act" has an interesting role that is of value to l e g i s l a t i o n regulating solar tech-nology. - It i s an umbrella act that can be applied to any i n -dustry as required. It gives the Governor in Council.the au-thority to create l i s t s of permissible imports or exports cate-gorized either by area or by goods. It further provides that permits to import and export be granted, that regulations per-taining to the permits or l i s t s be made and that offences or penalties be levied. The "National Energy Board Act" adopts these provisions and applies them to the import and export of energy by simply including some of these clauses. The import and export of gas, o i l , and e l e c t r i c i t y i s regulated under the s p e c i f i c provisions of the "Energy Board Act". The fact that the "Energy Board Act" has s p e c i f i c import and export provi-sions to f u l f i l l the intent of the act, sets a precident for l e g i s l a t i o n c o n t r o l l i n g solar technology to do the same. Thus, the role of "The Export and Import Permits Act" in a l e g i s l a -tive model i s to form an umbrella act that can be used s p e c i f i -c a l l y when needed. The essence of the l e g i s l a t i o n i s contained in clause (5a) which states i t s purpose as: - 23 -To ensure, in accordance with the need of Canada, the best possible supply and d i s t r i b u t i o n of an a r t i c l e , that i s scarce in world markets or i s subject to governmental controls in the countries of o r i g i n or to al l o c a t i o n by intergovernmental arrangement.35 The "National Energy Board Act" is the primary l e g i s l a t i o n governing the energy sector. It encompasses the largest por-tion of the energy sector, though from the point of view of solar technology, i t has l i t t l e e f f e c t . It is intended to cover the federal j u r i s d i c t i o n within the energy sector, and as such i t focuses upon aspects that cross p r o v i n c i a l or national boun-daries. This translates into j u r i s d i c t i o n over o i l and gas pipelines, e l e c t r i c i t y transmission l i n e s , hauling gas and o i l 3 6 and the rates involved. The act c a l l s for the establishment of a full-time board which has q u a s i - j u d i c i a l powers with the 37 rights and p r i v i l e g e s of a Superior Court of Records. It must therefore follow the rules of that court. This means that i t s rules are fixed and that any appeal can only be made to the 3 8 Federal Court of Appeals on matters of legal interpretation. The board also has an a l l inclusive advisory function, which could possibly encompass solar technology. It i s ex-pected to research and to report upon the status of the energy 39 sector both within and outside Canada. What the board does not have is a research capacity. It i s only to report upon the research done by others. It is in instances such as this that the comprehensiveness of the energy l e g i s l a t i o n breaks - 24 -down. The s p e c i f i c s of the solar technology industry are such that a narrow advisory capacity i s not s u f f i c i e n t to allow for. the proper regulation of the industry. Thus, as with nuclear power, the industry needs further s p e c i f i c l e g i s l a t i o n , i f a solar industry is to be coped with. The Energy Board is also empowered to give licences and c e r t i f i c a t e s dealing with a l l energy matters in i t s j u r i s d i c -tions, to control prices of energy, and to control exports and imports of energy. As well as the previously mentioned powers, i t is empowered to hold hearings as a q u a s i - j u d i c i a l body. Licences or c e r t i f i c a t e s are issued by the board under a r i g i d set of conditions, including an exhaustive l i s t of re-quirements and procedures. S i g n i f i c a n t l y , the l i s t includes impact analysis requirements and public hearing requirements. In theory the licencing power of the Energy Board i s possibly applicable to solar technology regulations. However, the de-t a i l s of the licencing procedure are such that they could not be used for solar technology as they are. Solar technology therefore is not able to be subsumed under this l e g i s l a t i o n . The a b i l i t y of the Energy Board to.control prices of energy is tantamount to being able to completely control the market, including price l e v e l s , price structure, and price determina-40 tion methods. Included are conditions of how a t a r i f f i s f i l e d for, methods of determining just and reasonable rates, powers to disallow past t a r i f f s , rules against discrimination, - 25 -l i m i t a t i o n s on contracts, and conditions of operation. The le v e l of d e t a i l of this section of the act i s an important c h a r a c t e r i s t i c of this l e g i s l a t i o n . The point is c l e a r l y made that energy is of extreme significance to the nation. Also a l l of these c h a r a c t e r i s t i c s apply to solar under a d i f f e r e n t j u r i s d i c t i o n a l context. The difference between the powers of this act and those which should apply to solar technology are that this act regu-lates energy as" a commodity in i t s own ri g h t , and an act to regulate solar technology would regulate the c a p i t a l stock used to create the energy. Thus, an adaption must be made for this industry. In summary, the existing federal l e g i s l a t i o n that regulates the energy sector lays down p r i n c i p l e s that could be applied to a model to regulate solar technology. The f i r s t i s that each industry must be treated as a separate e n t i t y . There i s l i t t l e p o s s i b i l i t y of comprehensive l e g i s l a t i o n to cover a l l energy sources. The second is that the power to intervene into as-pects of the market i s required. Thirdly, the power to regu-late imports and exports i s necessary for the protection in the public interest of any industry dealing with energy. Lastly, the power to issue licences i s necessary. Though the existing l e g i s l a t i o n follows these p r i n c i p l e s i t i s not d i r e c t l y a p p l i c -able to the solar industry. Thus, at the federal l e v e l new l e g i s l a t i o n w i l l be needed following the pr i n c i p l e s of the existing l e g i s l a t i o n . - 26 -B.C. P r o v i n c i a l L e g i s l a t i o n The p r o v i n c i a l l e g i s l a t i o n is more narrowly oriented than the federal l e g i s l a t i o n . It deals s p e c i f i c a l l y with energy supplies within the province and has a d i f f e r e n t degree of d e t a i l . To a large extent i t functions in a similar manner in the sense that each act i s s p e c i f i c a l l y oriented to one industry. Also, most of i t was formed under perceived c r i s i s conditions, thus i t s value to the solar technology industry is more in the formulation of p r i n c i p l e s of regulation than in i t s potential as a regulatory device. There are seven acts that apply to the energy sector within the province. They are: "The Power Act 1955", "The Power Development Act 1961", "The Power Measures Act 1964", "The .British Columbia Hydro and Power Authority Act 1964", "The Power Measures Act 1966", "The Ministry of Mines and Petroleum Act 1973", and "The Energy Act 1973". As can be expected, given the motives behind energy l e g i s l a t i o n , almost a l l of the l e g i s l a t i o n pertains to hydro e l e c t r i c energy. B.C., of course, is r i c h in hydro e l e c t r i c and coal capacity but has l i t t l e of the other forms of energy. For the sake of s i m p l i c i t y , the f i r s t act to be dealt with w i l l be that not dealing with hydro e l e c t r i c power, and then the regulative p r i n c i p l e s involved in the hydro e l e c t r i c l e g i s l a t i o n w i l l be investigated. The "Ministry of Mines and Petroleum Resources Act" is not in substance an act that creates any regulatory structure. - 27 -It is an act which sets up the framework, not the content, for a regulatory structure. Section 6 of the act establishes i t s l i m i t s . "The purpose and function of the ministry are, under the d i r e c t i o n of the minister, (a) to prepare and develop comprehensive p o l i c i e s respecting mineral resources and petroleum resources in ,the province, and to make reports and recommenda-tions to the minister respecting the implementation of such p o l i c i e s ; (b) to i n i t i a t e and carry out any investigation, survey, research, study, inquiry, or inventory respecting mineral and petroleum resources, and c o l -l e c t and c i r c u l a t e information acquired thereby; (c) to administer a l l acts, and regulations assigned to the minister pursuant to section 5, and discharge such duties as may be assigned to the minister by the Lieutenant-Governor in Council; and (d) to regulate a l l mining a c t i v i t y . " The d e t a i l s in the remainder of the act s p e l l out the con-diti o n s of entering upon land and the method of becoming an assayer. Other than that no regulations are established. The primary contribution to regulative l e g i s l a t i o n comes from 6(d). This clause creates a framework for p r o v i n c i a l government regu-l a t i o n of resources. The six remaining acts comprise a series.of steps by which the regulation of the e l e c t r i c a l generation industry came under the control of the p r o v i n c i a l government. The f i r s t act, "The Power Act 1955", was passed to con-solidate the e l e c t r i c generation f a c i l i t i e s on Vancouver Island. It was done to capture the economies of scale i n e l e c t r i c a l generation and transmission. This allowed for more standardized - 28 -and r e l i a b l e service for those on the island. It also firmly reinforces the v a l i d i t y of the p r i n c i p l e of public regulation of energy supplies for p o l i t i c a l and economic reasons. The Power Act created the " B r i t i s h Columbia Power Commis-sion" that was to be an operating corporation. It had very broad powers, including the right to recommend expropriation of any real and personal property that i t required in order to 41 carry on i t s a c t i v i t i e s . In short, the Power Act established the p r i n c i p l e that the stable supply of energy is of primary importance to the society and has p r i o r i t y over other consider-ations. The second act, the "Power Development Act 1961" was the act which nationalized the B r i t i s h Columbia E l e c t r i c Company Limited. This act was a further reaffirmation of the p r i n c i p l e of regulating industries within the energy sector by the pro-vince. The purpose for the p r o v i n c i a l government taking con-t r o l of the B.C. E l e c t r i c Company was to enable i t to develop the Columbia River. The p r o v i n c i a l government required control of this company as part of i t s negotiation strategy. Of the remaining acts, two, the "Power Measures Act 1964" and the "Power Measures Act 1966", deal with the relationship of the two government-owned corporations, "B.C. E l e c t r i c " and the "Power Corporation". They are in essence housekeeping l e g i s l a t i o n . - 29 -The five pieces of l e g i s l a t i o n thus far referred to set a context within which the regulation of solar technology can be considered. The aspects of that context are that governmental control of energy industries within the province is well-accepted, that governments can intervene in the energy sector for p o l i t i -c a l reasons, and that the supply of energy to the c i t i z e n s of the province i s a matter of great importance. The two remaining acts define the existing regulatory struc-ture governing the energy sector within B.C. and as such could be of significance to the development of a l e g i s l a t i v e model to regulate solar technology. The " B r i t i s h Columbia Hydro and Power Authority Act 1964" brings together the administrative control of hydro e l e c t r i c and other forms of power generation under the auspices of a crown corporation. It was designed to regulate the hydro elec-t r i c and thermal e l e c t r i c capacity existing at the time of the act's inception. In order to be comprehensive, the drafters of the l e g i s l a t i o n included within some defined terms a l l as-pects of the energy sector. The comprehensiveness does not in fact follow through to the operational terms in the act. For instance, power i s defined as including: "Energy, l i g h t , and heat however developed or pro-vided, and includes e l e c t r i c i t y and natural, manu- ^ factured or mixed gas, or li q u e f i e d petroleum gas." From the point of view of this thesis, power produced by solar conversion could be included, but i t i s not s p e c i f i c a l l y - 30 -included. The broad base of this d e f i n i t i o n i s not referred to in any of the functional terms. The powers given by the act to the Hydro Authority could be assumed to include reference to solar conversion technology. Two of Hydro's powers are: (a) "to generate, manufacture, d i s t r i b u t e , and supply power", and (b) "to develop power-sites, power projects, and power plants."43 The twenty-three remaining powers are so heavily biased towards hydro e l e c t r i c and thermal e l e c t r i c that solar conver-sion is of l i t t l e e x p l i c i t s i g n i f i c a n c e . One additional power could extend to solar conversion. Sec. 16(h) "to purchase, lease, or otherwise acquire and project, prolong,and renew patents, patent r i g h t s , trademarks, designs, licences, fran-chises, concessions, and to use, exercise, develop, manufacture .under grant licences, or p r i v i l e g e s in respect of those a c q u i s i -tions and to experiment with, test, and improve any patents, right s , investions, d i s -coveries, processes of information; . In e f f e c t , i t could be assumed that the corporation i s given the authority to function as an agent of the crown in the e l e c t r i c a l energy sector. Consequently, i t i s capable of con-t r o l l i n g and hence regulating on the public's behalf solar technology within i t s j u r i s d i c t i o n . One s i g n i f i c a n t aspect of this act i s that any i n d u s t r i a l corporation that generates i t s own power does not come under the administrative authority of the crown corporation. Because - 31 -of this many solar conversion units w i l l probably be outside the j u r i s d i c t i o n of the crown corporation. Thus, the regula-tion of the majority of solar conversion units, as well as the technology i t s e l f , could not be accomplished by Hydro's author-i t y . The remaining act, the "Energy Act of 1973", provides a more comprehensive regulatory control over a l l the existing energy production than any other act. Its purpose i s primarily to control coal, o i l and gas supplies. A focal point of the Energy Act from the point of view of solar conversion technology is contained in the d e f i n i t i o n s of "energy resource" and "energy 45 u t i l i t y " . An energy resource: includes natural gas and o i l , and a l l other natural forms of petroleum and hydrocarbons both gaseous and in l i q u i d form, coal and a l l other natural bituminous fue l s , e l e c t r i c a l power, and a l l means of generation of e l e c t r i c a l power and a l l means by which energy i s , or may be generated. An energy u t i l i t y : means a person, including the lessee, trustee receiver, or liquidator of such person, who owns, or operates in the province equipment or f a c i l i t i e s for the production, generation, storage, transmission, sale, delivery, or furnishing of gas, e l e c t r i c i t y , steam or any other agency for the production of l i g h t , heat, cold, or power to or for the public or any corporation for compensation; but "energy u t i l i t y " does not include: (i) a municipality in respect of services fur-nished by the municipality within i t s own boundaries; - 32 -(ii) a person not otherwise an energy u t i l i t y who furnishes the service or commodity only to him-self, his employees or tenants when such service or commodity is not resold to or used by others; ( i i i ) any person not otherwise an energy u t i l i t y who is engaged in the petroleum industry as herein-after defined or in the wellhead production of o i l , natural gas or other natural petroleum substances;46 As with the previous act, solar energy could f i t within this framework. However, much of the potential production of solar energy f a l l s into categories not covered by this act. Consequently, much of the potential use of solar conversion technology is outside its jurisdiction. The only other section of the Energy Act which has bearing upon solar conversion technology is in Part II which defines the energy management role of the Energy Commission. In sum-mary, its role is to advise the Lieutenant-Governor in Council on a l l aspects of the energy sector, both national and inter-4 7 national. The extent of this role includes "Quality and ex-tent of probable and known energy resources", "measures... con-sidered necessary... in the public interest'. .. to promote dis-covery, conservation, and prudent use of energy resources", and "the exportation of energy...and the advisability of such ex-portation having regard to the public interest". Presumably i t is within the role of the Energy Commission to advise the Lieutenant-Governor in Council on the 'need for legislation re-garding solar conversion technology and the need for Hydro's - 33 -involvement. This role does not assign the Commission the re-s p o n s i b i l i t y for research and development, and therefore any work done in this area is presently the choice of Hydro. The net resu l t of this examination i s that neither federal nor p r o v i n c i a l l e g i s l a t i o n accounts for solar conversion tech-nology in any rea l meaningful sense. Completely new l e g i s l a -tion i s required in order to properly regulate t h i s technology. - 3 4 -CHAPTER IV THE RADIO AND TELEVISION REGULATION MODEL: AN ANALOGY The prototype model which functions for radio and t e l e v i s i o n i s a valuable analogy for solar technology because the two tech-nological forms have generic s i m i l a r i t i e s and the p o l i t i c a l and administrative issues are cl o s e l y related. This does not auto-matically mean that a simple one-to-one relationship exists which would make i t possible to insert clauses pertaining to solar technology into the radio and t e l e v i s i o n model. Though the sim-i l a r i t i e s warrant the consideration of the use of this proto-type, there are major differences between the two technological forms that would have to be accounted for. These w i l l require changes in the d e t a i l s of the model. For instance, the radio and t e l e v i s i o n model functions solely at the federal l e v e l . A solar technology regulatory model would have i t s main focus at a p r o v i n c i a l l e v e l , but w i l l have a component of federal l e g i s -l a t i o n as well. The regulatory structure which oversees the Canadian Broad-casting System can be categorized into two units. One i s the technical j u r i s d i c t i o n which comes under the control of the Radio Act. The other i s the p o l i t i c a l , economic or c u l t u r a l j u r i s d i c -tion which comes under the control of the Broadcast Act. The - 35 -structure that is described by these acts i s the resu l t of a long evolutionary process which has included struggles, con-f l i c t s and experiments in Canada, as well as in other nations. It i s p a r t i a l l y on the basis of this evolution that this regu-latory structure has a value when applied to solar technology. For that reason i t is necessary to present a concise h i s t o r i c a l overview. Technical Aspects The f i r s t issue that has led to the development of a regu-latory structure in most nations has been the technical one. Like solar conversion technology, radio and t e l e v i s i o n tech-nology can best be described as a variety of energy conversion devices. Both radio and t e l e v i s i o n transform l i g h t and sound into electromagnetic energy and back again. The electromagne-t i c radiation i s the product of a complicated technology which produces an o s c i l l a t i n g e l e c t r i c charge at a certain rate in cycles per second, known as the frequency. This charge gener-ates electromagnetic radiation, known as the si g n a l . This s i g -nal has spectral c h a r a c t e r i s t i c s measured in cycles per second. The regulation of the technical aspects of radio and t e l e v i s i o n focuses on the electromagnetic spectrum but in truth i t i s the actual hardware which i s regulated. S i m i l a r l y , solar tech-nology i s an energy conversion device, which converts radiant energy into another form that i s more useful. It also has a - 36 -s p e c i f i c electromagnetic response c h a r a c t e r i s t i c . This response c h a r a c t e r i s t i c can be used in a similar way that the radio and te l e v i s i o n spectrum i s used - as a device in regulating the hardware of solar technology. The i n i t i a l reason for regulating the generation of radio and t e l e v i s i o n signals was that the p o s s i b i l i t y of signals i n t e r f e r i n g with one another was extremely high. To avert t h i s , technical separation is required. This can be done in terms of frequency, in terms of time or in terms of distance. The need for this form of regulation was i l l u s t r a t e d by the d i f f e r e n t experiences in three nations: Canada, B r i t a i n , and the United States. Right from the beginning both Canada and B r i t a i n close-ly controlled electromagnetic technology because of the fear of interference. In the United States, however, the attack on regulation was i n i t i a l l y successful and a l a i s e z f a i r e s i t u a -tion existed. It was only a short time, however, before abso-lute chaos ensued, forcing the formation of the Federal Communi-cations Commission to regulate the industry. P o l i t i c a l Aspects The p o l i t i c a l issues in radio and t e l e v i s i o n were i n t e r -mingled with c u l t u r a l issues. When radio and t e l e v i s i o n were f i r s t developed, great hopes were placed in them. They were deemed to have great educational value, promising to make every-4 9 one aware and disseminate culture to a l l . Later the euphoria - 3 7 -changed to concern. It became evident that they could be pro-paganda tools misrepresenting education. They were shown to be 5 0 agents of contrql of human behaviour. The use of the tech-nology became a tool for p o l i t i c a l p r o s e l y t i z a t i o n . In Canada the problem of a national i d e n t i t y and the need for program-ming to r e f l e c t the national culture was added to th i s l i s t of concerns.^ This led to a policy that national i d e n t i t y should 5 2 be a concern in the broadcast industry. Thus, the view that radio and t e l e v i s i o n had a strong p o l i t i c a l component that nec-essitated regulation for the purposes of national protection developed. Economic Aspects The economic issues in the radio and t e l e v i s i o n industry can be divided into macro- and micro-economic issues. The macro-economic issue i s the o l i g o p o l i s t i c market structure. The micro-economic issues are the existence of economies of scale, a concern for the resource a l l o c a t i o n and a concern over c a p i t a l stock renewal. H i s t o r i c a l l y the o l i g o p o l i s t i c nature of the radio and te l e v i s i o n markets was related to financing broadcasting sys-tems. In B r i t a i n a decision was made to keep the broadcast industry a state monopoly and finance i t solely from a fee 5 3 levied on receiver sets. In Canada and the United States the financing was done by advertising, which was the source of - 38 -the o l i g o p o l i s t i c structure. The.existence of advertising as the source of revenue meant that the larger the population, viewing or l i s t e n i n g , the more the advertiser was w i l l i n g to pay for the ad. Large national market advertisers soon saw the benefit of widely dispersed ad campaigns as did radio and t e l e v i s i o n owners. A tendency arose for one station owner to try to have as many stations as possible so that they could of-fer to an advertiser a wide market. From this c e n t r a l i z a t i o n tendency the networks system was formed. Single station owners soon became disadvantaged, further increasing the tendency to-wards oligopoly. Presently, in the United States 60 percent of the program-ming is done by networks representing national advertisers. There are however s t r i c t rules to attempt to control this ten-dency, stating how many stations can be owned by an i n d i v i d u a l , where in the country these can be owned, and to what extent networks can force programming choices upon the individual sta-tions. The rules, though well intentioned, are of questionable a f f e c t . In Canada these issues are controlled by the C.R.T.C., 55 which can regulate the quality and quantity of advertising 56 as well as the length, frequency and nature of advertising. The stronger regulations in Canada are more e f f e c t i v e and at-test to the value of regulation. - 39 -Radio and t e l e v i s i o n productions have large economies of scale. Economies of scale are in existence when large-scale 57 production decreases average costs. These economies have functioned within the radio and t e l e v i s i o n industry right from the beginning. In 1926, for example, the C.N.R. found i t eco-nomic to broadcast music to a l l i t s hotels and railway trains v i a a cable network from one central p l a c e . R . C . A . , which had begun broadcasting as a way of s e l l i n g sets, found i t more lucrative in the network business and soon dispensed with the ownership of stations and went into i t exclusively. Thus, R.C.A. formed the N.B.C.. Networks soon dominated the industry and to-day they control 60% of the broadcasting time. The concern over resource a l l o c a t i o n and a concern over c a p i t a l stock renewal i s a further issue in this industry. Because i t i s a r e s t r i c t e d market with economies of scale, mar-ginal p r i c i n g practices in radio and t e l e v i s i o n cannot be used. Consequently, unregulated p r i c i n g procedures w i l l not generate economically e f f i c i e n t price l e v e l s . In the long run economic gains w i l l be greater, drawing more resources into the industry than should be as resource a l l o c a t i o n i s related to long-run 59 gams. It is within the context of long-term gains being a factor in resource a l l o c a t i o n that protection of c a p i t a l stock becomes an issue. For example, U.H.F. i s an expensive t e l e v i s i o n format to i n i t i a t e . It requires higher towers and more power. At the - 4 0 -o r i g i n a l i n i t i a t i o n of the format c a p i t a l stock i s very expen-sive, requiring great expenditure. If a decision was made to i n i t i a t e i t and to phase out V.H.F., a major turn over in capi-t a l stock within the industry would take place. This could be accomplished because of the high returns to c a p i t a l already men-tioned. So a decision to allocate i n d u s t r i a l resources towards the U.H.F. format away from the V.H.F. format could cause a str a i n on the industry due to c a p i t a l replacement costs. Be-cause the industry i s controlled outside the nation, due to a lack of l o c a l manufacturing, this would cause an export of capi-t a l . For this reason the Canadian regulatory agency has, by i t s licencing procedures, taken control of the resource a l l o c a t i o n within the industry. This allows for the protection of the na-t i o n a l c a p i t a l stock that i s in the industry. The l a s t h i s t o r i c a l aspect related to the development of the Canadian radio and t e l e v i s i o n system is the role of the C.B.C.. As a corporation i t has a strategic place in the mar-ket that i s unique. It functions as part of the regulatory sys-tem but was not in t e n t i o n a l l y developed as a component of i t . It was developed due to various h i s t o r i c a l pressures which be-came formalized in l e g i s l a t i o n . In the early 1930's Canada opted for a dual system containing some public and some private stations. This was a compromise solution to the two opposing forces of the day. The value of this dual system i s that i t gives the potential of the best of both worlds. The state, - 41 -through i t s operation of the C.B.C., can d i r e c t l y act upon i t s policy towards broadcasting. An example of thi s i s the exis-tence of both a French and an English network regardless of market si z e . At the same time the private entrepreneurial energies are able to fr e e l y function through the non-public stations. Presently, C.B.C. owns 20 percent of a l l F.M. radio stations, 35 percent of a l l A.M. stations, 20 percent of a l l T.V. stations, 20 percent of a l l T.V. relay stations, and i s 60 a f f i l i a t e d to 60 percent of a l l independent T.V. stations. Of the two T.V. networks, C.B.C. i s the largest and i s also the only coast-to-coast radio network. This dominant market posi-tion gives the state a considerable amount of leverage in the market. The Radio and Television Regulative Model The preceding arguments show that major aspects of the radio and t e l e v i s i o n industry.are the same as those previously described for the solar technology industry. It i s on the basis of this s i m i l a r i t y that use can be made of the regula-tive model c o n t r o l l i n g the radio and t e l e v i s i o n industry. The radio and t e l e v i s i o n l e g i s l a t i v e model i s epitomized by i t s strategic q u a l i t y . It i s not simply a straightforward l e g i s l a t i o n package that i s administered but a l e g i s l a t i o n pack-age that possesses a complex structure which allow for strategic regulatory decisions to be made. In short, i t i s f l e x i b l e and dynamic. A graphic representation of the model i s as follows: - 4 2 -Lines of Authority Within the Regulatory Structure A Radio Act I Hard l i n e strategy Government Administrators Governor in Council Characteristics I Character i s t i c s II I 3 § Part I Broadcast Act Part II Broadcast. Act T : Diplomatic strategy » Characteristics I Characteristics II Part III Broadcast Act 1 Exemplary strategy A Characteristics I Characteristics II I The Industry and the Public The positive value of t h i s strategic approach i s partly that i t allows the regulatory system f l e x i b i l i t y . By being f l e x i b l e the system can respond e f f e c t i v e l y to changing con-diti o n s within the industry. If i t were not f l e x i b l e , chang-ing conditions would necessitate a change in l e g i s l a t i o n . This would introduce a lag period and would create counter productive r i g i d i t y , ineffectiveness, and possibly confusion. If this were the r e s u l t of regulation i t would undermine the fact that the industry i s being regulated for positive reasons, not negative ones. - 4 3 -The quality of the decision made using a strategic approach i s a further factor. The information used to make the decision is more v a l i d and more comprehensive. More than one group of professionals investigating an area for d i f f e r e n t reasons means they act as a check on each other. Also various actors input-ting information into the decision making process from various points of view increases the scope of that information. The strategic quality of the l e g i s l a t i o n i s derived from the fact that i t has two components. The f i r s t component i n -volves d i r e c t statements of regulatory control made by both the Radio Act and the Broadcast Act. The second component involves the fact that there i s a crossover between the sections of the act; a crossover which forms a checks and balance system and allows varying ways of accomplishing the same thing. This c h a r a c t e r i s t i c takes the form of clauses or powers under one section or j u r i s d i c t i o n which are repeated under another sec-tion or j u r i s d i c t i o n . The d i r e c t component of the l e g i s l a t i o n functions thus: Generally, under the Radio Act permission is granted to pos-sess radio and t e l e v i s i o n equipment for the purpose of broad-casting. Under the Broadcast Act permission i s granted to use radio and t e l e v i s i o n equipment for the purposes of broadcast-ing. Within the Broadcast Act there are three additional levels of regulatory structure. Part One of the act serves the role of ov e r a l l policy component. This part outlines - 44 -the context within which the industry i s to be regulated. Part Two of the act states the regulatory function and powers of the C.R.T.C.. This body i s very c r i t i c a l in the regulatory model as i t has.similar authority to the administrators of the Radio Act but a d i f f e r e n t orientation. Part Three of the Broadcast Act states the terms of incorporation of the C.B.C.. It is the Radio Act in p a r a l l e l with both Part Two and Part Three of the Broadcast Act (as per the diagram) that forms the strategic q u a l i t y of this l e g i s l a t i o n . The pertinent clauses in both the Radio Act and the Broad-cast Act that form the essence of the l e g i s l a t i v e relationship between the C.R.T.C. and the Radio Act are as follows: Radio Act: 8-1 the m i n i s t e r — m i n i s t e r of communications — s h a l l make such action as may be necessary to secure, by international regulation or otherwise, the right of her majesty in right of Canada in telecommunications matters and s h a l l consult the Canadian radio-tele-v i s i o n and telecommunications commission with respect to a l l such matters, that, in his opinion, a f f e c t or concern broadcasting. Broadcast Act: 15 Subject to this act and the Radio Act and any directions to the commission issued from time to time by the Governor in Council under the authority of this act the commission s h a l l regulate and supervise a l l aspects of the Canadian broadcasting system with a view to implementing the broadcasting policy enun-ciated in section 3 of this act. 21-1 No broadcasting licence s h a l l be issued amended or renewed pursuant to this part unless the minister of communications c e r t i f i e s to the commission that the applicant has s a t i s f i e d the requirements of the - 45 -Radio Act and regulations thereunder and has been or w i l l be issued a technical construction and operating c e r t i f i c a t e under that act with respect to the radio apparatus that the applicant would be e n t i t l e d to operate under the broadcasting licence applied for or sought to be amended or renewed and any broadcasting licence issued amended or renewed in contradiction of this section is of no force or a f f e c t . 22-2 No broadcasting licence i s of any force or ef f e c t during any period while the technical con-struction and operating c e r t i f i c a t e issued under the Radio Act with respect to the radio apparatus that the holder of the broadcasting licence i s en-t i t l e d to operate thereunder:is suspended or revoked. The pertinent clauses that form the essence of the r e l a -tionship between the C.R.T.C. and the C.B.C. are as follows: Broadcast Act: 17-2 The executive committee and the corporation s h a l l , at the request of the corporation, consult with regard to any conditions that the executive committee propose to attach to any broadcasting licence issued or to be issued to the corporation. 17-3 If not withstanding the consultation provided for in subsection 2, the executive committee attaches any condition to a broadcasting licence described in subsection 2 that the corporation i s s a t i s f i e d would unreasonably impede the provision, through the corpor-ation, of the national broadcasting service contemplated by section 3, the corporation may refer the condition to the minister for consideration and the minister, after consultation with the commission and the corporation may give to the executive committee a written d i r e c t i v e with respect to the condition and the executive s h a l l comply with such d i r e c t i v e . 24-3 Where the commission, after affording to the corporation an opportunity to be heard in connection therewith, i s s a t i s f i e d that the corporation has violated or f a i l e d to comply with any condition of a broadcasting licence issued to i t . The commission s h a l l forward to the minister a report setting forth the circumstances of the alleged v i o l a t i o n or f a i l u r e the findings of the commission and any observations or - 46 -recommendations of the commission in connection there-with, and a copy of the report s h a l l be l a i d by the minister before parliament within f i f t e e n days after receipt thereof by aim, or i f parliament i s not then s i t t i n g , on any of the f i r s t f i f t e e n days next there-after that parliament i s s i t t i n g . 39-3 The corporation i s bound by part one and two. When these three e n t i t i e s are taken as a unit, the govern-ment has a diverse set of routes i t can use to implement policy regarding the communication industry. This gives i t wide f l e x -i b i l i t y in terms of p o l i t i c a l , economic and s o c i a l strategy, as well as po l i c y . Much of the strength of this l e g i s l a t i o n comes from the cross-over of aut h o r i t i e s . Much of what the Minister of Com-munications can do under the Radio Act can also be done by the C.R.T.C. under the Broadcast Act. The major difference l i e s in the fact that under the Radio Act no public hearings are required, while under the Broadcast Act these hearings are re-quired. Since the Radio Act has stronger l e g i s l a t i o n than the Broadcast Act, this cross-over a b i l i t y allows the government to choose how heavy-handed i t wishes to be. An example of this cross-over capacity is contained in the following clauses: The Broadcast Act: Section 16-1A In furtherance of i t s objectives, the commission on the recommendation of the executive committe, may a. prescribe classes of broadcasting licences. - 47 -The Radio Act • Section 4-la The minister may a. prescribe classes of licences and of technical construction and operating c e r t i f i c a t e s ; The same c a p a b i l i t y exists within other roles as well. Regarding exemptions from the l e g i s l a t i o n section 17-le of the Broadcast Act and 3-2 of the Radio Act both allow exemptions. Regarding the right to suspend or revoke licences, Sections 19-1 and 24-1 of the Broadcast Act and 4-ld and 4-2 of the Radio Act allow this r i g h t . There are other examples, but stating them would merely be redundant. The argument being made i s that because the same regulations can be applied using more than one strategic mechanism, i t i s possible to regulate much more e f f e c t i v e l y and, i f desired, more completely than i f the l e g i s l a t i o n was applied by a simple application of some rule. The l a s t part of the regulatory structure i s that which defines the role of the C.B.C.. The c r i t i c a l sections of the act are: 39-1 states: The corporation i s established for the purpose of providing the national broadcasting service con-templated by section 3, in accordance with the con-ditions of any licence or licences issued to 17 by commission and subject to any applicable regulations of the commission, and for that purpose the corpor-ation has power to 48 -Diagram B Radio and Television Regulatory System The Strategic Alternatives A Representative L i s t of Relative Powers Hard Line  Strategy Makes decisions be-hind closed doors. Influence by dict a t e . Diplomatic  Strategy Makes decisions af-ter a public meeting. Influence through negotiation. Exemplary  Strategy Has commanding market position. Influence through competition. -sets classes of licence -make exceptions to the act -sets equipment standards -sets format regula-tion and industry c a p i t a l i z a t i o n levels -has power to d i c -tate without recourse -sets classes of licence -make exceptions to the act -can contract for program content and composition -sets terms of licence -sets quality and quantity standards -controls resource a l l o c a t i o n by con-t r o l l i n g market entry -can set taste standards -can influence format -can af f e c t rates by competition -can a f f e c t types of programs -regulates ad prices by l i m i t i n g ad time - 49 -f. with the approval of the minister, act as agent for or on behalf of any person in providing broadcasting service to any part of Canada not served by any other licensee and 39-2 states: The corporation may within the conditions of any licence or licences issued to i t by the commission and subject to any applicable regulations of the commission, act as agent for or on behalf of any minister of the crown or as an agent of her majesty in right of Canada or of any province, in respect of any broadcasting operations that i t may be directed by the Governor in Council to carry out, including the provision of an international service. Thus, the C.B.C. has an exemplary ro l e . It is the govern-ment-owned competitor in the market place. As such i t can aid the regulatory process by example or by economic competition. To the extent that i t has market control because of i t s market position i t can af f e c t the nature of the radio and t e l e v i s i o n industry. A summary of the regulative model.that can be extracted from the radio and t e l e v i s i o n l e g i s l a t i o n i s that the model components allow for three grades of strategy. They are the hard l i n e strategy, the diplomatic strategy and the exemplary strategy. The Radio Act serves as the hard l i n e strategy. It i s administrative in nature, with appeal only to the cabinet. The C.R.T.C., as embodied in Part Two of the Broadcast Act, functions through a diplomatic strategy. It must act in public. - 50 -Its decisions can be appealed and challenged, f i r s t to i t s e l f then the Supreme Court and cabinet. This strategy i s l i k e a negotiation process. F i n a l l y , the C.B.C., as embodied in Part Three of the Broadcast Act, has the function of an exemplary strategy. By setting standards throughout the industry i t can pressure the industry into having certain c h a r a c t e r i s t i c s . - 51 -CHAPTER V A LEGISLATIVE MODEL TO REGULATE THE SOLAR TECHNOLOGY INDUSTRY The preceding discussion has outlined both the general c h a r a c t e r i s t i c s of the strategic model in the radio and t e l e -v i s i o n l e g i s l a t i o n and the conditions surrounding the solar technology industry. This chapter develops a functional model from that discussion. From the previous discussion i t i s possible to i d e n t i f y four c r i t i c a l aspects of the solar technology industry. F i r s t , i s the research, development and manufacture of solar techno-l o g i c a l devices outside of Canada. These w i l l be produced m a i n l y by multinational corporations and imported. Further, they w i l l , for the present, constitute the overwhelming major-i t y of solar devices used in Canada. Second, i s the research development and manufacture of solar technological devices within Canada. Third, i s the use by individuals of solar de-vices. Last, is the c o l l e c t i v e use of solar devices to gener-ate power for sale. For the present this w i l l be the least common use, but with time i t w i l l d r a s t i c a l l y increase and in fact be the most s i g n i f i c a n t use from the point of view of regu-l a t i o n . - 52 -The issue of regulation i s the issue of how these aspects of the industry can be dealt with to preserve the p o l i t i c a l sovereignty of the nation. This necessitates discussion on why the p o l i t i c a l sovereignty needs to be preserved. Where economic strength i s a requirement for p o l i t i c a l health and independence, the source of that economic strength has the most c r i t i c a l of p o l i t i c a l c h a r a c t e r i s t i c s . Through-out history various commodities have held this p o s i tion: labour during the Roman times, precious metals during Renaissance times, coal and iron during the Industrial Revolution. Now this position i s held by energy in a l l i t s forms. The world has moved away from labour intensive economies towards c a p i t a l intensive economies. Non-human sources of energy have become the c r i t i c a l components of a healthy economy. Securing t h i s commodity, energy, at a cost that s t i l l a l -lows the economy i t s comparative advantages i s of great impor-tance to a nation. Those nations with natural deposits are well-off; those without are not. Because natural occurring energy sources are dwindling, a greater and greater portion of the energy supplied w i l l come from the o r i g i n a l source - the sun. Technological development in the solar technology indus-try, coupled with r i s i n g prices in the non-renewable energy industry, w i l l help accelerate this process. Solar, then, w i l l become a major way of securing energy supplies. - 53 -Solar technology i s a very high order technology. Its development requires that very large amounts of c a p i t a l be i n -vested in high risk research and development. Thus only large f i n a n c i a l l y solvent corporations can get involved in this ac-t i v i t y . Once the c a p i t a l has been invested and a successful technical breakthrough i s accomplished, a continuing advantage accrues to the investor. Further development becomes much safer. The r e s u l t of this process i s that a slow c e n t r a l i z a -tion of control within the industry takes place. Thus, the fact that the solar technology industry i s a high order tech-nology means world markets w i l l inevitably become o l i g o p o l i s t i c , meaning they w i l l be controlled by multinational corporations. Canada, not yet having an active national industry, faces an imported goods market. Hence, internal regulation i s necessary to stop external.manipulation of the market. It i s also in the nature of the solar technology industry that i t is capable of appropriating c a p i t a l from other energy sources. It is not necessarily clear to a purchaser of energy that long term national advantage i s gained when c a p i t a l i s con-sumed by one industry over another. Therefore, the purchaser maximizes his or her short term unplanned gains and, in the process, misallocates national resources. Regulation i s needed then to guarantee proper resource a l l o c a t i o n . Another argument i s that regulation is required because existing l e g i s l a t i o n i s inadequate. The present l e g i s l a t i o n - 54 -i s organized on an industry by industry basis. As such the solar technology industry was l e f t out of the l e g i s l a t i v e con-siderations. Since i t was l e f t out, and since i t i s a d e f i n -able industry, new l e g i s l a t i o n i s needed, f i r s t to cover the ground missed and second, to be consistent with existing l e g i s -l a t i o n . Accepting then that a regulatory model i s required, a set of objectives needs to be formed that w i l l serve as a method of evaluating the model. These objectives should f u l f i l l two re-quirements: one, a comprehensive or gestalt q u a l i t y , and two, an analytic q u a l i t y . From information presented in the previous chapters the following objectives can be described. The objectives to be f u l f i l l e d by the creation of this model can be grouped around two general of comprehensive con-cepts: one, energy s e l f - s u f f i c i e n c y and two, f l e x i b i l i t y of use. The model should contribute to the nation's energy s e l f -s u f f i c i e n c y , and should have a maximum of f l e x i b i l i t y allowing the government to respond to changing conditions in the solar technology industry quickly and with ease. The objectives that form the concept of s e l f - s u f f i c i e n c y are: to protect p o l i t i c a l l y the Canadian solar technology mar-ket from the strategic maneuvering of the international o l i g o -p o l i s t s ; to develop a national research and development capa-b i l i t y , as well as a production industry; and to enhance b a l -anced comprehensive energy planning. - 55 -The f i r s t objective, "to protect p o l i t i c a l l y the Canadian solar technology market", has three aspects to i t . One i s the protection of the solar c a p i t a l stock by preventing i t from be-ing turned over. This means some guarantee that once the c a p i t a l stock i s in place i t w i l l not be replaced prematurely. Second i s the control of the a l l o c a t i o n of national resources into the industry. Third i s the protection of industries using solar technology from o l i g o p o l i s t i c manipulation, manipulation that would take place by corporations downgrading the e f f i c i e n c y of the imported technology, decreasing the comparative advantage of the national solar technology industry. The second objective, "to develop a national industry", has two aspects: the necessity of creating a parts industry to maintain imported devices; and the development of a p u b l i c l y owned research and development component. The t h i r d objective, "to enhance balanced comprehensive energy planning", has three aspects: one, the development of an economic balance between the various sources of supply for energy; two, the creation of price regulation mechanisms which might include subsidies; and three, the p o s s i b i l i t y of municipal control over i n s t a l l a t i o n s within i t s boundaries. Those objectives that form the concept of f l e x i b i l i t y are: to have the same basic regulative structure at a l l three levels of government; and to have more than one ongoing method of ad-ministering the comprehensive l e g i s l a t i o n . - 5 6 -The objective, "to have the same structure throughout the government levels", suggests that the federal, provincial and municipal components of the model have similar structures. The objective, to have more than one administrative route, suggests that the government w i l l be able to strategically choose the administrative style that w i l l be.most valuable in applying the necessary policy. It w i l l not have to pass new legislation each time the policy changes. The model that is designed to f u l f i l l these objectives is derived from two sources. The source of its basic configura-tion is the model previously abstracted from the radio and tele-vision legislation. The second#the data presented in the second to fourth chapters /is the source of the content to f i l l this basic structure. By combining the two sources, a model is created to f u l f i l l the objectives list e d . The model has components at a l l three levels of government, federal, provincial and municipal. At each level of govern-ment the basic three-pronged administrative structure of the radio and television model exists with of course variations to suit the needs of the level of government. The three com-ponents are the licencing component (hard line strategy), the regulative and planning component (the diplomatic strategy) and; the crown agent (exemplary strategy). This horizontal configuration is broken down vertically into the federal, SOIAR • TECHNOLOGY REGULATORY MODEL HARD LINE STRATEGY DIPLOMATIC STRATEGY EXEMPLARY STRATEGY PART (I) LICENCING COMPONENT Administered by the Energy Minister (appeal only to Cabinet) Aspects 1) regulate technical standards 2) set importation conditions and regulations (to protect c a p i t a l stock) -surcharges -quotas -condition on importers - p a r t i a l Canadian production PART (II) SOLAR TECHNOLOGY REGULATORY BOARD (FEDERAL) Aspects 1) carry out analytic research -can advise minister -maintain high l e v e l of technical understanding 2 ) negotiate import agreements with importers -pub)ic hearings require application to import be supported with documentation FEDERAL Solar Technology Importation Act Parts I & II PART (I) LICENCING COMPONENT Administered by the Energy Minister (appeal only to Cabinet) Licences 1) to produce -maintain technical standards within the province 2 ) to use - planning energy consumption -a) domestic - simple stamp b) i n d u s t r i a l energy impact statement PART (11) SOIAR TECHNOLOGY REGULATORY BOARD (PROVINCIAL) Public Hearings Terms of Reference 1 ) oversee a l l o c a t i o n of resources going into solar 2 ) guarantee use consistent with use of other forms Research and advisory capacity Powers -set system requirements -set output of solar -set performance levels -set rates -set classes of users Stop resources being shi f t e d from other areas Look for economies of scale within sector PART (III) AGENT OF THE CROHN -Apply persuasive pressure -Carry on R & D -Create production c a p a b i l i t y -Contract with solar technology regulatory board (federal) for c a p i t a l stock maintenance -Act in such a way as to counteract reliance cn imports -Actively trade internationally to keep up expertise -Maintain % of l o c a l sales volume 1 U l - J PROVINCIAL | Solar Energy Regulation Act Parts I, II & III SOLAR ENERGY BY-LAWS -Building codes and zoning -Zone for l i g h t angles -Zone for land use r e s t r i c t i o n s over major i n s t a l l a t i o n s , i . e . photothermal furnaces and photothermal e l e c t r i c generation plants MUNICIPAL SOLAR DEVELOPMENT AGENCY Two aspects 1) municipal development company -build and lease solar buildings 2 ) municipally controlled solar generation plant MUNICIPAL Solar Energy By-Laws - 58 -p r o v i n c i a l , and municipal levels on two bases: the constitu-t i o n a l d i v i s i o n s of power and the j u r i s d i c t i o n a l breakdown as stated by the existing l e g i s l a t i o n . The licencing or administrative component functions at a l l three levels of government. At the federal and municipal levels i t i s the major component. At the federal l e v e l a l l the regulative component includ-ing this one are under one act. The t i t l e of the act is "The Solar Technology Importation Act". It has two separate func-tioning parts and i s structured and detailed in such a way that i t functions in concert with the Energy Act and not in opposi-tion to i t . The act has i t s emphasis within the administrative or licencing component with the regulative and planning compo-nent being independent but s t i l l in a supportive r o l e . The administrative and licencing component or Part I of the act functions as i t does in the Radio Act. It i s admin-istered by the Energy Minister who has the power to make deci-sions that can be appealed only to the cabinet. The powers of the minister under this act have two aspects. One i s the powers to regulate the technical standards of the technology being im-ported and the other is to set importation conditions and regu-lations that are intended to protect the c a p i t a l stock as well as Canada's economic sovereignty. The aspect of the act which applies to regulating technical standards includes: e f f i c i e n c y standards of the designs; - 59 -e f f i c i e n c y standards of materials; technical materials and sys-tems, such as refraction and r e f l e c t i o n standards of surfaces; absorption rates; heat transfer rates ; conversion factors; l i f e expectancy and degradation rates; acceptable chemical makeup and absorption quality of f l u i d s ; system compatibility with other systems; system completeness; system f l e x i b i l i t y ; system size and output l e v e l s . The aspect of the act which applies to the economic and p o l i t i c a l protection of the c a p i t a l stock includes the setting of surcharges and quotas on individual items to keep their prices in a desirable position in rel a t i o n to l o c a l l y produced items. It also includes putting conditions on the variety of products imported by any corporation to stop product d i f f e r e n -t i a t i o n and to protect new Canadian products. F i n a l l y , i t i n -cludes requiring the condition that importers of products main-tain a Canadian manufacture s i t e for parts. By placing sur.-::; charges and quotas upon individual items the minister w i l l be able to regulate the price structure of the Canadian market. Thus, by setting p r i c i n g p o l i c i e s , market forces can be used to dir e c t buying patterns. S i m i l a r i l y , by putting conditions on the variety of products being imported, the product mix of the economy can be regulated. Putting conditions on the manufac-turing locations can force some of the "value added" to accrue to Canadian workers. - 6 0 -The l e g i s l a t i o n at the p r o v i n c i a l l e v e l i s e n t i t l e d "The Solar Energy Regulation Act". It has three parts and i s struc-tured almost i d e n t i c a l l y to that of the radio and t e l e v i s i o n model, each of the three components having almost equal impor-tance. As with the federal l e v e l l e g i s l a t i o n , the administra-tive and licencing component (also c a l l e d Part I) functions d i r e c t l y under the pr o v i n c i a l Minister of Energy with the same force as in the federal act. The act provides for three kinds of licences to be granted: one is to produce the technology, another is to use i t , and a thi r d to s e l l i t . The granting of a licence to produce the technology allows the government to set the same technological standards upon nationally produced products that i t i s able to set for imported products. The rationale for the l e g i s l a t i o n at both levels is the same. Since the degree to which solar sources supply energy is the degree to which other sources do not have to supply energy. To stop a drain on other sources of energy high stan-dards must be maintained in the solar technology industry. This licencing requirement supplies the government leverage to i n t e r -vene when and as i t sees f i t . The granting of a licence to use the technology also has the purpose of planning for energy consumption. It i s not so much at the domestic l e v e l but at the i n d u s t r i a l and commercial l e v e l that this would function. Domestic energy consumption is equal to only a small portion (23%) of the t o t a l energy demand. - 61 -The i n d u s t r i a l and commercial consumption is much greater, so i t is at i n d u s t r i a l and commercial consumption that the l e g i s l a t i o n should be directed. Because of this fact the licences are d i -vided into two categories. One i s the domestic private consum-er category, the other is the i n s t i t u t i o n a l and i n d u s t r i a l cate-gory. The domestic private consumer category requires a very simple set of bureaucratic procedures, that include registering the purchase and i n s t a l l a t i o n of solar units. These procedures are designed to keep a record of domestic solar use. This w i l l allow more accurate planning in the energy sector. The i n s t i t u t i o n a l and i n d u s t r i a l category requires a more rigorous procedure. The process of receiving a licence i s akin to receiving a building permit. The proper a l l o c a t i o n of re-sources and the proper balancing of society's opportunity costs are the p r i n c i p a l s determining decision to grant or not grant a licence. The i n d u s t r i a l and commercial user has to submit de-t a i l s of what energy systems they intend to use, how much they w i l l get from solar and other sources, how a l l systems w i l l i n -terface and what levels of e f f i c i e n c y they w i l l get. In short, they w i l l have to f i l e what amounts to an energy impact state-ment. The licence granted would be tantamount to them getting a licence for their entire energy system. The l e g i s l a t i o n at the municipal l e v e l i s termed "Solar Energy By-Law". It is for the purpose of performing administrative - 62 -or licencing duties. The power o f the municipality to use this by-law to regulate solar technology comes from i t s j u r i s d i c t i o n over land use within i t s boundaries. In p a r t i c u l a r , i t i s with regards to the building code requirements and zoning require-ments. The use of solar technology within a municipality w i l l f i r s t of a l l have to meet building code conditions. This w i l l necessitate the passing of a by-law to change the nature of the building code. This by-law w i l l apply more to active thermal and passive thermal than to photovoltaic. The reason for. the building code change i s that performance' of solar technology i s related to construction c h a r a c t e r i s t i c s and s i t e orientation of the immediate c o l l e c t o r s and the supporting structure. This re-quires building code changes to be regulated. Zoning, of course, i s a very s i g n i f i c a n t issue within the municipality's j u r i s d i c t i o n . The municipality can zone for l i g h t angles to regulate the private consumer or zone for land use to regulate major i n s t a l l a t i o n s such as photothermal fur-naces or photothermal e l e c t r i c a l generation plants. The regulative and planning component also functions at a l l three levels of government. At the federal l e v e l the regu-l a t i v e and planning component i s Part II of the act, termed the "Solar Technology Advisory Board". Like the C.R.T.C., under the Broadcast Act, i t performs a negotiation-like function. Its role i s two-fold. F i r s t i s to carry out analytic research to advise the minister on what regulations to implement. Second - 63 -is to act as a negotiating body with importers. Its power is to grant to the importer a licence to import. Its analytic role includes maintaining a high l e v e l of technical understanding with regards to the solar technology industry, the energy sector generally, and the economy. Proper evaluation requires that the board be well versed in a l l as-pects of the energy problem. A part of this analytic role is a testing role to enable i t to actually evaluate the s p e c i f i c items involved. The board grants licences through the process of public hearings. If an importer wishes to enter the Canadian market i t w i l l have to make application to the. Advisory Board to do so. It must be remembered that the concern i s primarily with what w i l l be large scale i n s t a l l a t i o n s . Only a portion of the solar units w i l l be small individual units, although importers im-porting these w i l l s t i l l have to go through the same process. The application to the board i s in terms of a market anal-ysis j u s t i f y i n g the firm's desire to enter the market. It has to present i t s data and the technical s p e c i f i c a t i o n of the tech-nology i t proposes to import. The board can challenge the firm's case and in the end apply conditions upon the firm's licence. The technical, economic and p o l i t i c a l terms of erference the board uses are similar to those used in the r i g i d licencing procedure. The procedure however i s d i f f e r e n t and the result could possibly be d i f f e r e n t . Being granted an import licence by - 64 -the Advisory Board w i l l not however mean the m i n i s t e r i a l j u r i s -d i c t i o n does not apply. The minister w i l l s t i l l have the same licencing r i g h t s , even though he or she may choose to apply them in an u n c r i t i c a l manner. It is at the p r o v i n c i a l l e v e l that the regulative and planning component functions most strongly. This i s because i t is at the p r o v i n c i a l government l e v e l that (according to sections 91 and 92 of the B.N.A. Act) c o n s t i t u t i o n a l j u r i s d i c -tion over energy i s vested. The component of l e g i s l a t i o n at this l e v e l w i l l also be Part II and w i l l have a similar con-figuration to that at the federal l e v e l . The c h a r a c t e r i s t i c s of the component at this governmental l e v e l are two. One i s to oversee the a l l o c a t i o n of resources going into the solar technology industry and the other is to guarantee that the use of solar technology is consistent with the use of other forms of energy. The powers of this board have the force of a Superior Court of Records. The reason for t h i s ' i s that i t gives i t quasi-j u d i c i a l authority and i t s decisions can be appealed only to the Supreme Court of the province or cabinet. The s p e c i f i c powers w i l l include: setting system requirements, setting out-put of solar systems, setting levels of performance, setting rates and setting classes of users to accept those rates. It also has a research capacity which allows i t to advise the government as well as supply i t s e l f with expertise. - 65 -Its power to set system requirements in e f f e c t gives i t the power to make resource a l l o c a t i o n s . As the energy sector becomes more complicated, the systems which supply energy also become more complicated. By setting system requirements the board can balance how much energy i s being supplied by solar, and how much by other sources. This allows i t to balance t o t a l costs for energy and make sure that a s h i f t towards solar i s not taking resources away from other uses that in the long run w i l l be less expensive. It could as well guarantee that re-sources are only committed when economies of scale or economies of system complexity can be gained. An example could be photo-v o l t a i c being allowed to be used only when i t i s used as a sup-plement to hydroelectric because of d i s t r i b u t i o n economies in hydroelectric. Another example could be photothermal being allowed to be used only as a supplement to community d i s t r i c t heating systems, again because of economies of scale that are gained from d i s t r i c t heating. Given the complexity of proper energy planning, the a b i l i t y to regulate, resource a l l o c a t i o n i s the only way to be assured of having the industry contribute to making the energy sector cost e f f e c t i v e , hence aiding the cause of energy s e l f - s u f f i c i e n c y . It is with this same intention in mind that the board w i l l be empowered to set output lev e l s for the solar system being licenced and to set levels of performance. The a b i l i t y to set output levels and to set the levels of performance allows far - 66 -more comprehensive planning of the energy system. This w i l l aid the process of stopping energy supply from solar from com-peting with energy supplies from other sources and instead mix the uses of energy supplies more e f f e c t i v e l y . Setting rates i s a power that applies exclusively to those operations where energy generated by solar technology i s being sold commercially. This power w i l l give to the board control over the allotment of resources the users and producers of solar technology commit to the solar technology industry. The purpose in being able to set classes of users is also directed to the issue of resource a l l o c a t i o n . By prorating the'users the board can distinguish a rate structure that makes i t more advantageous for some users to use solar over others. If the rationale behind this i s related to conditions in the entire energy sector, i t can move resources from another i n -dustry into solar and vice versa. Application to this board is made at a public meeting. At that time a f u l l j u s t i f i c a t i o n for the application has to be presented and subject to challenge. The application i s sub-ject to whatever r e s t r i c t i o n the board places on i t when grant-ing i t . The f i n a l component of the model i s the exemplary compo-nent which i s f u l f i l l e d by the agent of the crown in the form of a crown corporation. This component functions mostly at the l e v e l of the p r o v i n c i a l government, though there i s a minor - 67 -component at the municipal l e v e l . The reason for this i s the j u r i s d i c t i o n a l arrangements between the governments. Energy as a resource i s a p r o v i n c i a l matter but by delegation has some focus at the municipal l e v e l . There is no component at the federal l e v e l because federal l e g i s l a t i o n only applies when pr o v i n c i a l boundaries are crossed and in this case i t does not „• happen. The s p e c i f i c purpose for having an agent of the crown i s to maintain a government position in an o l i g o p o l i s t i c market and, by so doing, be able to apply persuasive pressure on the market. It also gives the government access to information about the i n -dustry which allows i t to regulate the market more e f f e c t i v e l y . The terms of reference of the p r o v i n c i a l agent of the crown are: to carry on research and development as well as create a production "capacity within the solar technology market; to cre-ate the capacity to maintain the existing c a p i t a l stock within the province; to maintain a given percentage of the l o c a l B.C. market; and to trade on the international solar technology market. As the agent of the crown this corporation i s given the re-s p o n s i b i l i t y of aiding in the development of the nation's s e l f -s u f f i c i e n c y in energy. Since i t can be e a s i l y speculated that a large proportion of Canada's energy supplies will.come from imported solar technology, i t i s then incumbent upon the agent of the crown to act in a way that counteracts the reliance on imports. Because of the major amount of c a p i t a l required to do - 6 8 -t h i s , i t can only be done by a centralized research and develop-ment program followed by the development of a production capa-b i l i t y . The maintenance of the c a p i t a l stock also i s the crown agent's r e s p o n s i b i l i t y . The national regulatory body has the power to require that some production of the imported technology be done in Canada. This i s to be done to capture value added and to guarantee that the maintenance capacity e x i s t s . Any contractual arrangements made by the importation board w i l l accrue to the agent of the crown in the province where the i n -s t a l l a t i o n is being placed. This i s to avoid c o n f l i c t s of interest with private firms and to help supply funds to carry on the research and development program. The crown agent i s not however obligated to enter into losing ventures. The requirement of the agent of the crown to be able to trade on the international market i s a method of checking the corporation's performance. The purpose of the corporation's mandate i s to protect the energy sector of the province. Once this protective l e g i s l a t i o n i s in place i t can become a can-cerous repressive monolith i f not kept in check. To avoid t h i s , some method of evaluation i s required. There i s no better way to do so than to test i t s performance against the international oligopoly. Lastly, the requirement to maintain a certain percentage of the B.C. sales volume is designed to have the crown agent - 6 9 -retain a d i r e c t influence upon the nature of the B.C. market. This market includes the sale of technology as well as the sale of energy. Just as i t i s desirable for the corporation to have a major share of the market, i t i s also desirable for i t not to take on monopolistic proportions. For this reason, a per-centage i s set based on market analysis which w i l l give i t i n -fluence over the market but not repressive influence. The agent of the crown functioning at the municipal l e v e l has two aspects. One i s a municipally controlled development company, the other is a municipally controlled solar energy generation plant. For the municipality to promote the use of solar technology i t may have to prove i t s use by a solar de-velopment of i t s own. S i m i l a r l y , the economies of a c e n t r a l -ized solar unit may be such that only by the municipality own-ing i t can i t function. The l e g i s l a t i o n i s designed to allow t h i s . This then completes the meshing of the information pre-sented on the solar technology industry with the l e g i s l a t i v e model used to regulate the radio and t e l e v i s i o n industry. The next step in creating a regulative model for the solar tech-nology industry is to compare this result to the objectives, and then to revise i t i f this i s necessary. F i r s t , l e t us consider the concept of s e l f - s u f f i c i n e c y . The f i r s t of thos objectives grouped around this concept i s the p o l i t i c a l protection from international o l i g o p o l i s t i c TABLE D Federal Provincial Municipal Objectives S e l f - s u f f i c i e n c y A. P o l i t i c a l l y protect solar market Hard Line Dipl Exem Hard Line Dipl Exem Hard Line Dipl • Exem i . prevent c a p i t a l stock turnover / / / / i i . control a l l o c a t i o n of resources / / / / i i i . stop o l i g o p l i s t i c manipulation / / B. National R & D and production capacity i . parts industry / • i i . public R & D \ w / \ \ V C. Enhance balanced energy planning ; i . balance sources of supply / i i . price regulation / / / i i i . municipal control of i n s t a l l a t i o n s within boundaries / / F l e x i b i l i t y \XN A. Have same structure at various levels of government / / / / / / x \ / B. One or more ongoing methods of regulation /" / / / / / / - 71 -markets. This objective has a number of aspects to i t , the f i r s t being to protect the c a p i t a l stock by preventing c a p i t a l stock turnover. This objective i s primarily served by federal l e g i s l a t i o n . Both components, at this l e v e l , have character-i s t i c s that can prevent the turnover of the c a p i t a l stock. The administrative licencing component can set technical and other conditions upon the importer by guaranteeing a set l i f e span and by requiring Canadian production of replacement units. It can simply stop the import of units or set surcharges on units designed to force a turnover in the stock without adding tech-n i c a l improvements. The advisory board can accomplish similar results through i t s negotiation process. The conditions i t sets upon the importer can be directed towards that same goal. To a lesser extent the p r o v i n c i a l l e g i s l a t i o n f u l f i l l s t his objective. The energy impact statement w i l l require statements about l i f e span of the c a p i t a l stock and other such character-i s t i c s . By doing so i t also can be used to control the c a p i t a l stock turnover. The second aspect of this objective i s the proper a l l o c a -tion of resources. This aspect i s f u l f i l l e d p a r t i a l l y by the federal l e g i s l a t i o n , but more completely by the f i r s t , two com-ponents of the p r o v i n c i a l l e g i s l a t i o n . The proper a l l o c a t i o n of resources e s s e n t i a l l y means using resources where they are most b e n e f i c i a l to the society. In terms of energy this means the most e f f i c i e n t use of the energy supplies. At the federal - 72 -l e v e l , the advisory board w i l l aid in f u l f i l l i n g this objective. The fact that an energy impact statement has to be f i l e d means a thorough economic analysis w i l l be compiled. The eff e c t s w i l l be a resource a l l o c a t i o n analysis. The strong l e g i s l a t i o n exists at the p r o v i n c i a l l e v e l . At this l e v e l the decision to use or not to use i s made. Based on extensive and comprehensive analysis, the p r o v i n c i a l licencing component and the advisory board w i l l decide which project w i l l be undertaken and which w i l l not. By doing this they w i l l be a l l o t t i n g resources into or away from the solar technology i n -dustry. The crown corporation can be used when the a l l o c a t i o n problem i s due to a lack of in t e r e s t . The t h i r d aspect of this objective i s the protection against o l i g o p o l i s t i c manipulation of an industry's comparative advan-tage. This is accomplished by two parts of the model. The f i r s t i s the administrative and licencing component at the federal l e v e l . This component can guarantee the e f f i c i e n c y standards of the technology being imported. Thus, i t can guarantee a high qu a l i t y . The second part of the model i s the agent of the crown at the p r o v i n c i a l l e v e l . By i t s involvement in the international market i t w i l l have access to the standards of the world. Thus, i t w i l l be producing to these standards. By doing t h i s i t w i l l guarantee production of high e f f i c i e n c y technology for the Canadian market. - 73 -The second objective of those grouped around the concept of s e l f - s u f f i c i e n c y i s the development of a national research and development and production sector. This objective i s f u l f i l l e d by the model through l e g i s l a t i o n at both the federal and provin-c i a l l e v e l s . It i s within the powers of the federal licencing component to require that production of units or parts be done in Canada. This fact w i l l allow a guarantee of the existence of a viable production industry. The role of the p r o v i n c i a l crown corporation w i l l also be to try to d i r e c t l y f u l f i l l t h i s objec-t i v e . Since a production industry w i l l accrue to this corpora-tion, i t w i l l already have a base upon which to build i t s e l f . Since economies of scale and access to c a p i t a l are the c r i t i c a l factors in this industry, both are being supplied within the context of the model. The t h i r d objective of those grouped around the concept of s e l f - s u f f i c i e n c y i s to allow for comprehensive energy planning. The f i r s t aspect of this objective i s to allow for an eco-nomic balance between energy sources. This aspect i s primarily f u l f i l l e d by the l e g i s l a t i o n at the pr o v i n c i a l l e v e l with some support from the other l e v e l s . The requirement within both levels of l e g i s l a t i o n for an energy impact statement w i l l i n -clude a statement of the inte r r e l a t s i o n s h i p s between energy sources. This statement w i l l generate a f a i r degree of analysis about this issue and be the basis of a decision. At the muni-c i p a l l e v e l , the l e g i s l a t i o n i s weak in f u l f i l l i n g this objective, - 74 -but w i l l be p a r t i a l l y f u l f i l l e d through the use of the building code, zoning requirements and any project embarked upon by the municipality. The second aspect of this objective i s the introduction of regulative p r i c i n g mechanisms. A l l parts of the model can have some e f f e c t upon the f u l f i l l m e n t of this objective but i t i s primarily the p r o v i n c i a l regulative planning component and the federal administrative and licencing component that w i l l be the most useful. The pr o v i n c i a l component c l e a r l y has the power to f u l f i l l s p e c i f i c a l l y this objective. The federal administrators can, by levying surcharges, also a f f e c t the pri c i n g structure. A l l other parts of the model w i l l have spinoff effects which w i l l act as pr i c i n g mechanisms, but they w i l l be peripheral. The l a s t aspect of this objective i s that there be some de-gree of municipal control. This objective i s d i r e c t l y and pre-c i s e l y s a t i s f i e d by the l e g i s l a t i o n pertaining to the municipal l e v e l . The by-laws and the municipal corporation give the muni-c i p a l i t y a s i g n i f i c a n t degree of control over the regulation of solar technology within i t s j u r i s d i c t i o n . The f i n a l concept to be considered i s that of the f l e x i b i l -i t y of the model. This concept has two objectives grouped around i t . The f i r s t i s that the model should have more than one ongoing administrative structure that could be used. The second is that i t should have the same basic structure at a l l l e v e l s of government. - 75 -The f i r s t objective i s f u l f i l l e d by the use of the radio and te l e v i s i o n model as an analogy. In the form for solar technology the three components function separately and, in fact, seem at times to be in c o n f l i c t . The c o n f l i c t i s only apparent, how-ever, because in the l e g i s l a t i o n i t can be simply stated which components hold precedence. In the model there i s a difference in method in each component, even i f the content overlaps. This means that the government can choose which component i t w i l l stress in i t s regulatory strategy and therefore get the approp-ria t e r e s u l t s . The second objective i s a l s o . f u l f i l l e d by the f i n a l version of the model. Each l e v e l of government c l e a r l y has either two or three components to i t s l e g i s l a t i o n . This c h a r a c t e r i s t i c allows some change in focus between levels of government, but not. as much as between components. In conclusion, i t can be said that the model that was de-veloped more than s a t i s f i e d the objectives i t was meant to s a t i s f y . - 76 -CHAPTER VI CONCLUSIONS In conclusion comment i s required on the general value of the strategic approach, and on i t s l i m i t a t i o n s . The strategic approach can be seen as a synthesis of the corporate and democratic p h i l i s o p h i c outlooks. The corporate outlook, as represented by Nietzche and others, stressed running society e f f i c i e n t l y . Quick, firm de-cision-making was important, as was the a b i l i t y to' respond im-mediately to changing conditions. The democratic outlook stresses consultation with a l l . In this view the best decision was the decision arrived at by uni-versal agreement. Every person had the right to be heard and to be a part of the decision. The strategic approach combines these tendencies, allowing as much consultation as needed to respond quickly to changing conditions, and yet arrive e f f i c i e n t l y at a decision. In the model proposed, the democratic aspect i s p a r t i a l l y s a t i s f i e d by the decision-makers being answerable i n d i r e c t l y to the people through their elected o f f i c i a l s . The e f f i c i e n c y as-pect i s p a r t i a l l y s a t i s f i e d by the fact that the decisions are being made by people who are knowledgeable in the f i e l d . Thus neither time nor energy i s wasted but decision-makers are being held accountable. - 77 -In addition the strategic approach accounts for a wide variety of opinions from almost a l l possible sources and j u r i s -d i c t i o n s . Similar decisions being made by various groups at a l l three governmental levels allows for a "checks and balances system". The groups represented by each of the squares of the model w i l l a l l tend to see the industry d i f f e r e n t l y . As each group has input most of the possible v a r i e t i e s of opinion can be ac-counted for. At the same time this opinion w i l l be expressed by knowledgeable and p o l i t i c a l l y sensitive people. Thus the opposing opinions w i l l l i k e l y be concise, accurate and v a l i d , balancing each other. A further positive c h a r a c t e r i s t i c is that the government can decide how much or how l i t t l e discussion i t feels i s necessary in reaching a decision. If i t feels a policy w i l l receive a l -most universal acceptance, or i f i t simply wishes no discussion, i t can focus the decision-making tendency on the hard l i n e s t r a -tegy. I f , however, informed public debate i s a p o l i t i c a l neces-s i t y i t can use the diplomatic strategy. If both of these are impractical, and an educational strategy i s required i t can use the exemplary strategy. The positive value of the a b i l i t y to do a l l this i s that the choice of strategies i s a democratically motivated p o l i t i c a l choice that does not required drawn out l e g i s l a t i v e a c t i v i t y and can be put in motion quickly using highly informed and r e l i a b l e i n d i viduals. - 78 -This positive view of the strategic approach must be tem-pered by comment on i t s l i m i t a t i o n . The f i r s t l i m i t a t i o n i s that the model i s based upon an uncertain scenario. The scenario is predicated upon four assumptions: that energy i s going to be the singly most important international p o l i t i c a l issue of the future; that energy s e l f - s u f f i c i e n c y i s the most viable p o l i c y ; that solar energy i s going to play a major part in the a t t a i n -ment of s e l f - s u f f i c i e n c y ; and that international oligopoly w i l l control the solar technology industry. The evidence in favour of this scenario is strong. However there i s always a p o s s i b i l i t y the scenario i s incorrect. A l l that i s necessary to severely interfere with the model i s that one of the assumptions prove to be incorrect. If this were to be true then the value of the model would have to be questioned. A second l i m i t a t i o n i s the uncertainty of the size and nature of the bureaucracy. It may be that a large complicated bureau-cracy w i l l be needed to handle the complexity of the solar tech-nology industry. If this were the case there may not be any net gain from regulating the industry. The costs of regulating may be greater than the costs of not regulating. This also holds for the role the bureaucracy plays. In a l l p o l i t i c a l a c t i v i t y the t h e o r e t i c a l power structure and the ac-tual power structure are seldom the same due to i n d i v i d u a l strengths and weaknesses of the actors. Individuals could mani-pulate each of the regulatory bodies into being more or less powerful than intended. In either case the intent of the model would be undermined. If this were to happen the costs of regu-l a t i n g may again be greater than the costs of not regulating. A th i r d l i m i t a t i o n i s the requirement that three lev e l s of government be involved. A l l of the seven components are able to stand independently from the rest and survive. But i f the ob-jectives of the model are to be s a t i s f i e d an absolute minimum of one federal and one p r o v i n c i a l component must be in existence. Even so for a reasonable p o s s i b i l i t y that the objectives w i l l be met the hard l i n e and diplomatic components for the federal and p r o v i n c i a l levels w i l l have to be in place. This requires intergovernmental cooperation to a degree that i s . s e l -dom witnessed in Canada. The l i k e l i h o o d of such cooperation i s not remote, but i s d e f i n i t e l y uncertain. A fourth l i m i t a t i o n i s that the resources of some parts of the country may not be able to support the c a p i t a l outlay re-quired to set up the exemplary component at the p r o v i n c i a l l e v e l . Unfortunately i t i s these areas that stand to gain the most from this l e g i s l a t i o n . These are the areas where resources are so limited that their misallocation i s c r i t i c a l . In this s i t u a t i o n the model takes on the character of a device designed to make certain that those who have wealth keep i t , while those who haven't continue to do without. This i s c e r t a i n l y not the i n -tent of the model, and would be an unfortunate r e s u l t of - 80 -implementing i t . The solution to this negative e f f e c t i s how-ever outside the scope of this model and must be l e f t to chance. A f i f t h l i m i t a t i o n is the uncertainty of how other indus-t r i e s within the energy sector are going to a f f e c t the solar technology industry. The intent of the model i s to contribute to comprehensive energy planning, but the model only encompasses a small portion of the entire sector. Other industries are regu-lated to greater or lesser degrees. Yet unless regulation of these industries i s coordinated with regulation of the solar technology industry, both systems may function at cross pur-poses. If this were to happen i t would d r a s t i c a l l y decrease the effectiveness of the solar technology regulatory system. A l a s t l i m i t a t i o n is that the complexity: of the regulatory structure designed to create f l e x i b i l i t y could create confusion, and render the structure useless. As was stated in another context the theoretical and the r e a l power structures seldom coincide. Power struggles between groups within the regulatory structure could lead to groups working at cross purposes. This could be manifested as uncertainty on the part of groups as to what their powers and authority are, and c o n f l i c t i n g pressures upon the industry due to groups struggling against each other for dominance. In either of these cases e f f e c t i v e regulation would cease. In a l l l i k e l i h o o d the industry would find i t s e l f - 81 -operating under the burden of repressive regulation, the exact thing the strategic approach was meant to avoid. In conclusion, though these l i m i t a t i o n s are possible, r e a l world l i m i t a t i o n s , there i s a c h a r a c t e r i s t i c of the real world which lessens their disruptiveness. That i s that humans are adaptable. If society sees value in retaining this model, ways w i l l be found of either adapting the behaviour that i s i n t e r -fering with i t s effectiveness, or adapting the model. The model presented i s in fact only a prototype. It i s not known how many permutations i t has. Thus i t i s l i k e l y that i t s l i m i t a -tions, though serious, w i l l not be c r i t i c a l . - 82 -FOOTNOTES 1. U.S. Senate Solar Research Hearings, p. 11. 2. Solar Energy Technology and Applications, p. 6. 3. U.S. Senate Solar Research Hearings, p. 680. 4. "Energy From our Star w i l l Compete with O i l , Natural Gas, Coal and Uranium but not Too Soon." New York Times Magazine 5. "Solar S t i l l s for Community Use", p. 264. 6. "Don't Build a House T i l l You've Looked at This", p. 100. 7. Ibid., p. 101. 8. "Thermal Energy Storage Using Large Hollow Steel Ingots", p. 155. 9. "Storage of Solar Energy by Inorganic Oxide/Hydroxides". 10. Applied Solar Energy, p. 119. ' 11. Solar Energy - Technology and Applications, p. 98. 12. Applied Solar Energy, p. 28. 13V Ibid', p. 5 28 . 14. Science Council of Canada Report #27. p. 31. 15. Science Council of Canada Report #25. p. 54. 16. Ibid. p. 59. 17. U.S. Senate Solar Research Hearings, p. 7. 18. Ibid. p. 337,. 19. The Conserver. June 1977. p. 3. 20. Science Dimension, p. 10. 21. Energy P o l i t i c s , p. 173. 22. A Time to Choose, p. 230. - 83 -23. Horizontal Integration, p. 943. 24. A Time to Choose, p. 305. 25. Canadian Renwable Energy News. Oct. 1978. pp. 14-15. 26. Capital stock turnover i s the period of time i t takes for the c a p i t a l stock to be e n t i r e l y replaced by new equipment, 27. The National Energy Board Policy, Procedure and Practice, p. 6. 28 . Ibid. p. 8 . 29. Statutes of Canada . R-7 . 30 . Statutes of Canada . G-2. • 31. Statutes of Canada . A-19. 32. Statutes of Canada . E-6 . 33. Statutes of Canada . N-6. 34 . Statutes of Canada . E-17. 35. Canadian Statutes. p. 2910 . Section 5 (1) . 36 . Canadian Statutes. 37. Canadian Statutes. p. 5470 . Section 10. 38 . Canadian Statutes. p. 5272 . Section 18. 39. Canadian Statutes. p. 5275 . Section 22. 40. Canadian Statutes. p. 5286 . Sections 50-56. 41. The Power Act. Section 6. 42. B r i t i s h < Columbia Statutes. Chapter 7. Section 2. 43. B r i t i s h i Columbia Statutes. Chapter 7. Section 14-1 (1) & (b) . 44 . B r i t i s h i Columbia Statutes. Chapter 7. Section 16 . 45. B r i t i s h i Columbia Statutes. Chapter 29. Section 1. 46. Ibid. - 84 -47. B r i t i s h Columbia Statutes. Chapter 29. Section 19 & 20 . 48 . Electronic Mass Media Radio Television and Cable. p. 1. 49 . 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