Solar roof panels in Okotoks (Courtesy Drake Landing Solar Community)

It is the subdivision of the future: Detached two-storey family homes with manicured lawns, pools and large garages, like any other in the area except that here 90 per cent of the hot water and the home heating comes directly from the sun — year round.

Canada in the year 2050? Actually it's Calgary in the fall of 2006, or more precisely Okotoks, a suburban community just to the south, which has as much sunshine and clean dry air as you will find almost anywhere in the world.

All 52 homes in the Drake Landing Solar Community in Okotoks have now been built and purchased. Twenty are fully occupied; the rest are going through the final fitting out.

With its 800 solar panels mounted on garage roofs and breezeways, its system of well-insulated pipes that link every home to a common "power plant" — basically an underground reservoir to recycle all that warmed liquid on a wintry day — this is Canada's first fully solar community.

In fact, it looks to be the first of its kind anywhere in North America, another badge for pioneering Alberta.

• Related: Anatomy of a solar community

Built to the highest R-2000 insulation standards and warmed by a pounding prairie sun, these houses will be at least 30 per cent more energy efficient than the average Canadian home and are expected to reduce annual, climate-warming greenhouse gas emissions by five tonnes per household.

All this for a fairly modest federal and provincial government subsidy of $5 million, which does, however, work out to about $96,000 a home.

It seems like a bargain. And the Okotoks project has already won three environmental awards, including one from the UN. However, the big question still remains: Will Okotoks be the solar ice-breaker its proponents are hoping for? Or is it just an oddity in a nation becoming known for its gluttonous energy habits?

Harnessing the sun

In the last decade or so, small- and medium-sized solar communities have been sprouting up in several countries — notably Japan, Germany and Denmark, places with less average sunlight than most of southern Canada.

Denmark has about 40 of these communities, as well as the one that is considered the largest in the world: Marstal (pop. 2,340) on an island in the Baltic Sea boasts a huge field, about the size of three and a half soccer pitches, with more than 18,000 cubic metres of solar collectors, tilted to wink provocatively at the sun.

These panels are enough to provide close to a half of Marstal's heating and hot water supply, a vital component in keeping it free of the vagaries of rising energy prices.

Denmark, mind you, is a country with a long history of community or district heating — more than half the country is on a shared system of some sort, with most of that heat increasingly supplied by some combination of garbage incineration, gas-fired co-generation, wind mills and solar panels.

Getting the same bang for the communal buck in individualistic Canada is proving much more difficult, as another southern Alberta field of solar dreamers, the town of Vulcan (pop. 1,800 or so), is finding out.

At one point about a year ago both Vulcan and Okotoks were vying to be Canada's first solar community. The town council in Vulcan (yes, it's the city that hosts an annual Star Trek convention) was strongly behind the plan: a private power generator signed on to provide backup electricity by burning woodchips and farm waste; and a couple of Calgary engineering firms were keen to make a go of it.

At that point, though, the estimated cost of building a football-sized field of solar panels and hooking this up to Vulcan's 1,000 or so homes and public buildings as well as to a massive underground storage tank of heated water was in the $15- to $20-million range.

The latest report pegs it at closer to $35 million, according to Morten Pedersen, who heads one of the engineering firms backing the project.

As a result, the Vulcan project is very much on hold as the proponents cast about trying to find a white knight investor, a steam-needing business willing to purchase some of what would be Vulcan's excess hot water, or a senior government willing to help interested homeowners cut greenhouse gases.

The economics of solar power

Compared with more conventional, fossil fuel-generated energy, solar power is often considered a more expensive alternative. However, as Tang Lee, a professor of architecture at the University of Calgary, points out, it depends on how you calculate the costs.

Oil and gas is heavily subsidized when you take into account the huge write-offs available for exploration and other development, Lee notes. Solar energy gets very little in the way of government help, basically just a few provincial programs.

But when you tally up the health costs associated with smog and fossil fuel-burning, Lee says, as well as the fact that solar can work extremely well in a close-knit area, like a university campus or a downtown, the renewable heating power of the sun comes out ahead.

Still, governments appear to be hugely conflicted over the value of solar.

Natural Resources Canada took the lead role in directing the Okotoks project, for example. But its sister department, Environment Canada, notes that the large-scale production costs of solar are still in the neighbourhood of 20 to 30 cents a kilowatt/hour, while conventional energy (coal/gas/nuclear) from the grid is in the range of 4 to 7 cents for the same unit.

The Canadian Solar Industries Association says it costs about $3,500 to retrofit a typical house for solar heating and $5,000 for solar electricity. These costs generally cover only up to 60 per cent of domestic water heating as a rule and can take eight years and more to pay for themselves.

Prof. Lee, who was involved with the design of the Vulcan system, says the project is feasible if it is confined to the homes in the downtown core as well as the key public buildings such as the library, hospital and school. But the town wants everyone included, and amortizing the $35-million upfront cost, even over 40 years, is not an easy sell.

(Pedersen claims the Vulcan project would be feasible if the power could be sold at the same price as natural gas today. But the catch, he says, is that solar's long-term viability is unproven and homeowners will have to be offered a substantial discount if they are to switch over en masse.)

In Europe, the capital costs for solar and alternative forms of energy are routinely subsidized. Denmark's Marstal project, for example, received 28 per cent of its total construction cost in grants.

The $5 million the Okotoks project received from Ottawa, the province and a couple of local agencies allowed the developers to offer a flat lifetime fee of $60 a month — the current equivalent of heating a similar sized home with natural gas.

Tyler Stevenson, the project manager for the Drake Landing developer, says that's probably a bargain. The price for the solar equipment rose as the builders had to import expensive materials from Europe.

In his view, it is only new subdivisions – in which solar energy is included in the original planning and construction – that makes any kind of economic sense. Even then, he says, it will probably take a few years yet for solar prices to come down – and natural gas prices to rise – before builders come around to solar in any kind of number.

Government help

Not everyone agrees with that assessment of course. Lee, who has been designing and building solar homes since the mid-1970s, says solar energy is feasible today in high-density situations and as a significant (up to 70 per cent) complement to home energy needs, provided builders use the appropriate heat-conducting materials to begin with.

But Pedersen, the engineer on the Vulcan project, says the proponents were counting on at least some federal help when they started down this road. But now that the new Conservative government has cancelled, or at least "put on review," the old Liberal green fund, which had been used to help finance Okotoks and a feasibility study for Vulcan, everything is up in the air.

The solar industries association is also alarmed that the only federal funding for solar energy (a $5 million a year fund basically for pilot projects) is on hold. A handful of provinces, including B.C., PEI, Nova Scotia and Saskatchewan, have tax or special-loan provisions for solar projects.

Ontario has one of the more innovative programs: Its utility has been empowered to offer 42 cents a kilowatt/hour for excess solar generated electricity sold to the main grid by independent operators, mostly mills and public institutions in smaller centres.

That plan has helped to more than double the amount of grid-connected solar power in this country, the association says. Still, it adds, Canada has less than a quarter of the installed solar power of our big trading partners — only 110 kilowatts of on-grid electricity as of 2004, the most current national data. And that's not because we lack sunlight.

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