Thanks to the advancements in technology and the push to go green, more home and business owners are making the switch to sustainable, clean energy. A solar system harnesses the energy from the sun to power our homes. Over the years, solar panel cost has steadily dropped, making it more available and easier to install.
That said, the cost of solar panels is a significant investment that requires the right commitment and a period of waiting to see a return on that investment. While the benefits and value that solar offers often outweigh the cost, it’s important to understand the breakdown. Depending on where in Canada you live, the price of a solar power system will vary. What won’t vary, however, are the benefits offered by going solar.
Why solar power?
Switching to solar power is a long-term investment that should be considered if you are planning to stay in your home for many more years. You want to be there to reap the benefits of your investment. The payback of solar is extremely worthwhile and it more than pays itself off over the long-term. Solar power offers both personal benefits and environmental ones.
Reduce and eliminate energy costs
For starters, those monthly energy bill payments will drop significantly. Given the right-sized system and enough time, it’s even possible to reduce electricity bills to $0. The average lifespan of a solar panel is guaranteed for 25 years but can easily last 30 years or more. Plus, throughout that lifespan, solar panels will only see a 0.5% efficiency reduction per year. So, even years down the road, a solar system will continue to produce a steady supply of energy. For prospective buyers, as well, the appeal of buying a home outfitted with solar panels is ever-increasing, meaning that if you do decide to sell in a few years, that solar investment will add value to your home.
Reduce your carbon footprint
From an environmental perspective, solar power is just as beneficial and appealing. Naturally, as a source of green energy, solar helps combat climate change and pollution. Likewise, solar energy is an entirely renewable source. As long as the sun exists, solar energy will never run out. Non-renewable sources, such as fossil fuels, will eventually run out and burning fossil fuels is contributing to climate change.
According to the Canada Energy Regulator, 2040 is expected to see solar power make up 3% of the total generated electricity in Canada. With that in mind, investing in solar power now is a great head start on guaranteed future benefits. It’s important to understand the cost of investing in solar, by breaking down the expenses.
First, breaking down the final cost of a solar system means looking at the various parts and involved stages. The cost is split between the system itself and how much power costs in each province. Solar systems are calculated in dollars per installed watt ($/W), where a low cost, high wattage, is ideal. The prices for this vary between provinces. Alberta, for example, costs between $2.51-$2.77 per installed watt. Newfoundland & Labrador, however, costs between $3.53-$4.31 per installed watt.
One thing you never want to skimp on to save expenses is the professional installation of your solar panels. You always want someone with lots of experience, skill, and who is certified in solar installations. Solar panels prices are a major upfront investment, so you want to invest properly at every step. Plus, the installation will need to be signed off by a professional electrician or solar installer to be approved during an inspection from your local municipality.
Installation and parts
Different parts of the solar energy system can also affect the final cost. The solar panels are easily recognized as they are what sit on your roof and collect the sunlight to convert to electricity. The panels’ size depends on the amount of energy each one produces and ranges from 250 to 400 Watts. The number of panels needed depends on how much power each one provides. More power, for example, will mean fewer panels are necessary for your home.
Inverters are the second part of the system and convert “direct current” (DC) into “alternating current” (AC). AC is the energy used by homes, so it must be converted before being used. Then there is the energy storage device, which is key for storing excess energy and saving it for later. This stored energy can be re-accessed during cloudy days, nights, or in the winter when there is less sunlight.
The other option is “Net Metering,” which uses the grid to store energy. Excess energy goes back to the grid and gets applied as a credit to your utility bills. Similar to a battery, when you need more power, you just use the credit to access that stored energy again. This method is currently very popular in Canada and is used by most solar system owners.
The final part of a solar system and is what holds each panel in place. Roof-mounted racking is typically how solar panels are installed on houses. Different styles can are available for angled or flat roofs, as well as metal or shingled roofs. Ground-mounted racking is another option if your roof can’t support solar panels. This method is more expensive up front, however, since it requires extra materials to secure. Steel and aluminum are the most common materials, but wood may be an option if a homeowner DIY’s the racking. DIY is typically not recommended, as wood won’t last for the duration of the solar panel’s lifespan. If you choose ground racking, then hire a professional to help.
Cost of the system
Depending on the number of solar panels, what type of inverters you choose, and what method of racking, the final solar panel cost will vary. Other factors, such as climate and daily amount of sunlight, will also affect the efficiency of the system. Nova Scotia and Alberta, for example, get lots of sunlight, making them ideal for solar, which lowers the cost.
Calculating the cost of solar panels is also a two-part breakdown between what size you need and the cost to install.
Calculating the size
The size of the system refers to how much energy you need your new solar panel system to produce. This amount will vary depending on much energy your home uses throughout the year and what type of energy. To do so, add up each month then divide the total by the annual average of sunlight hours in your province. Depending on whether your home currently uses gas or electricity, the numbers will vary.
Calculation: System size (kW) = yearly home energy use (kWh) / annual average of solar hours (h)
Energyhub.org breaks down the annual average amount of full sunlight for each province as such:
Saskatchewan: 1330 kWh/yr
Alberta: 1276 kWh/yr
Manitoba: 1272 kWh/yr
Québec: 1183 kWh/yr
Ontario: 1166 kWh/yr
New Brunswick: 1142 kWh/yr
Prince Edward Island: 1104 kWh/yr
Nunavut: 1092 kWh/yr
Nova Scotia: 1090 kWh/yr
Northwest Territories: 1064 kWh/yr
British Columbia: 1004 kWh/yr
Yukon Territory: 965 kWh/yr
Newfoundland & Labrador: 949 kWh/yr
Once you know the size needed for your home, you can calculate the cost to install it. Keep in mind that the upfront cost for solar energy is much more expensive. However, the long-term payback and benefits are what make the outlay worthwhile.
Calculating the cost
To calculate the solar panel cost, you simply need to multiply the size of your system by the cost per installed watt ($/W).
Calculation: system cost = size of system x cost per installed watt.
Energyhub.org breaks down the cost for each province per installed watt as such:
British Columbia: $2.54-$2.69
New Brunswick: $2.65-$3.24
Newfoundland & Labrador: $3.53-$4.31
Northwest Territories: $2.43-$2.68
Nova Scotia: $2.74-$3.35
Prince Edward Island: $2.73-$3.33
Yukon Territory: $2.77-$3.38
Imagine you live in a gas-heated home in Alberta and use 15,000 kWh annually. The size of your required system would be:
(15,000kWh / 1276h = 11.76kW)
Then, use that number to calculate the total cost for your system:
11,760 Watts x $2.51-$2.77 = $29,518 – $32,575
A system that needs 11.76 kW would cost between $29,518 – $32,575 to install in Alberta.
Keep in mind that this is just an average estimate. Other factors, such as how much energy your household uses each month or what size you need, as a result, will affect the final solar panel cost. Even where you live in Canada will cause prices to vary, as the price for electricity and hours of sunlight is different.
Clean energy incentives and rebates
In order to help offset the cost of solar panel installation, most provinces have introduced incentives and rebates. These rebates encourage more people to go solar, as well as help those who already have, to offset the cost. Rebates return a portion of the cost, to help more homeowners handle the cost of going solar. In addition to solar rebates, some provinces offer other clean energy incentives to help make your whole home a green, energy-efficient space.
British Columbia: Offers a multitude of various rebates, including a Renewable Energy Rebate for solar energy installation.
Manitoba: Manitoba Hydro Solar Rebate Program ended in 2018. However, the Green Energy Equipment Tax Credit offers a 10% refund on solar panels prices.
New Brunswick: The Total Home Energy Savings Program rebates from $0.20/Watt to $0.30/Watt on solar power. Higher savings are rewarded based on the amount of energy-saving upgrades your home has.
Newfoundland and Labrador: Currently do not have solar rebates in place.
Northwest Territories: Offers a 50% rebate on solar energy through the Alternative Energy Technologies Program.
Nova Scotia: Solar Homes offers a rebate of $0.60/Watt and covers approximately 25% of the solar system’s cost.
Nunavut: Does not offer solar rebates or incentive programs.
Ontario: Provincial energy efficiency programs and clean energy incentives have both been cancelled in Ontario.
Prince Edward Island: The Solar Electric Rebate Program helps provide support and incentive for solar panel installations. The requirement for residential homes is $1,000/kilowatt installed, not exceeding 40% of the total cost.
Québec: Currently does not have a solar rebate in place, though there was a temporary incentive from 2016-2019.
Saskatchewan: No longer offers solar rebates or incentives. The old SaskPower Solar Rebate was slashed and then revamped for Nov. 1, 2019. This no longer offers rebates, but you can credit excess energy at 7.5 cents/kWh, which is down from the original 14 cents/kWh.
Yukon Territory: The Renewable Energy Systems Rebate offers as much as $800/kW for residential homes using off-grid power. The rebate offers up to a maximum of $5,000 per system per year.
Considerations of solar power
With the benefits and costs of solar power in mind, it’s also important to consider other elements of solar. A roof that can support solar panels, for example, will play a major role in the deciding factor. Solar installers will help optimize the panels’ location, but your roof must get enough sunlight first. It’s also worthwhile to cover any reroofing needs or repairs now before you install any panels. Once the panels are installed, maintenance is another thing to consider. Unless the panels are clear, your home won’t be benefiting from full solar capacity. Clearing away dust, debris, and snow in the winter needs regular upkeep.
Then there is the matter of sunlight. Depending on your energy needs, being able to maximize the amount of sunlight you get will play a significant role. Alberta and Manitoba, for example, get 1,276 and 1,272 respective hours annually. These make them prime areas for solar energy, while Yukon only gets 965 hours. In addition to savings, the total hours of sunlight will factor into how long your payback period is.
The payback period
This period refers to the amount of time it will take for your solar panels to produce the initial investment cost. In Canada, this timeline varies from 8 to 16 years and again depends on your current province. You can, however, calculate the timeline yourself and see how long it takes before you start turning a profit.
First, calculate the system’s gross cost by adding up everything you paid and subtracting any rebates. From there, calculate the amount of savings that you will make each year with your system. This final number will tell what your payback period will be. You should also consider the environmental payback, and by eliminating the use of fossil fuels, the positive impact you’re making no the environment.
Remember, going solar is never a decision homeowners regret. So, once you’ve made the decision, look for a certified solar company to help!
Find a RenovationFind certified solar company now!
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