Are Solar Panels a Good Home Investment in Canada?
Every time home electricity prices rise, a lot of Canadians think about installing solar panels. After all, solar energy is almost as free as sunshine once the system is up and running. Does the money saved justify the initial investment?
That depends on the cost of electricity in your part of the country, the amount of sunshine you get, and the cost of installing the panels. Also, consider available incentives and rebates.
The provinces best suited for solar energy are Saskatchewan, Prince Edward Island, and most of Ontario. Other areas, such as Nova Scotia, have rebates that make panels more inviting.
The break-even period for solar panels is about eight to 16 years, depending on the above factors. Of course, it may require taking out a loan or setting up a long-term payment plan to come up with the $20,000 – $30,000 it costs to install panels, so there's an interest consideration to deal with as well. Think solar energy might be the right choice for your home? Keep reading to learn everything you need to know about solar panels before investing.
Solar Panels Are Long-lasting
Solar panels have become one of the most popular sustainable building trends because they're low maintenance after the initial set-up. Additionally, they'll generally last around 30 years. It may occasionally be necessary to wipe snow or fallen leaves off the panels, but this can be prevented by installing the panels at a 35-degree angle.
Most people can recoup the cost of installation before the panels are halfway through their life cycle. This means homeowners with solar panels can enjoy nominal electricity fees for the remaining years.
Calculating the Cost of Solar Panels
Solar panel installation costs depend on the location and how much energy needs to be generated. For example, a house that needs abundant electricity and is in a less-sunny location will need more panels, making the installation costs higher. Solar panel installation costs about $3.00 per annual watt. The cost is lowest in Ontario and Nova Scotia, highest in Northwest Territories and Nunavit. Even within those regions, there's quite a bit of variation.
The kWh requirement can be found by looking at the usage from the last 12 billing cycles. In most places, it's available online. Calculate the size requirement by dividing kWh usage by annual hours of sunlight, which runs from under 1,000 hours in Newfoundland and Labrador to over 1,300 in Saskatchewan. The calculation will be even more accurate if the local sunlight hours are factored in.
Here's an example. Say a homeowner in British Columbia, which gets around 1,000 hours of sunlight per year, uses 9,000 kWh per year. The size they'll need can be calculated as follows:
9,000 kWh energy use / 1,000 hours of sunlight = 9 kW, or 9,000 watts, of solar panel power needed.
The cost of panels in British Columbia ranges from about $2.50 to $2.70 per installed watt. Therefore, the total watts used (9,000) multiplied by the cost per installed watt ($2.60) gives the total installation cost: $23,400.
This equation only offers an estimate. A solar panel installation expert can provide a more concrete estimate.
Replace Reliance on the Grid with Solar Panels
Here's an additional factor to consider: most people don't depend on solar panels to provide all their electricity but rather reduce the amount of electricity they pay for. People who don't have room for the full amount of solar panels can still get a few panels as a high-ROI home improvement project. A more typical installation is an array that can produce about 5 kWh, which will take care of 50 to 75 percent of the electrical requirement of an average home.
Solar Panels Are a Long-term Decision
Once they've run all the numbers and solicited some estimates, many people choose to install solar panels if they can get their money back in seven to 11 years. People who live in areas with low electricity costs and ample sunshine have faster break-even points. Saskatchewan is a sweet spot for those factors, although the installation costs aren't as low as in some other provinces.
If you plan to sell your home in the next few years, a solar array could increase the resale value, but you may not get as much out as you put in. However, if you plan to live in the same home for 15 years, the argument for residential solar panels becomes stronger.