Cost Breakdown of Solar Panel Installation in Ontario
For most potential solar customers, the motivations for considering the purchase of a solar array break down into a combination of personal priorities. Many people have environmental aspirations – they want to reduce their carbon footprint. Others like the idea of being more self-reliant. One thing they all share is a desire to save money by generating their power independently. This article discusses the cost of residential solar panel installation in Ontario.
How much will solar panels cost for an average Ontario customer?
According to the Ontario Energy Board, the average Ontario household consumes about 9,000 kWhs of electricity per year. To offset 100% of their electrical use, an average Ontario homeowner would need to install approximately a 7,500-watt solar array. With the current installed cost of solar generation at between $2.50 and $3.50 per watt, a 7,500-watt solar array will run somewhere between $18,750 and $26,250.
“What kind of payback can I expect on solar?”
Simple payback refers to the equation: system cost ÷ value of energy produced = years to payback. It sounds straightforward enough, but you must consider a few factors. To begin with, electric rates are constantly changing. They will increase over time, so using current rates will probably not give you a realistic payback period. In addition, rates fluctuate throughout the day for many customers, thanks to time-of-day pricing. Most of the power produced by solar will be during mid-peak to peak times, so the value will range between 13.5 and 20 cents. For a quick calculation of the payback of your net metering solar panels system, check out our Solar Net Metering Calculator.
Factors affecting the costs of solar panels in Ontario
- Solar panel system size
The size of your solar panel system is the most significant factor affecting the cost. The more solar panels you can fit on your roof, the larger the size and price of your solar array will be. When sizing your solar panels system, it is important to review your household’s current energy consumption, time of the day for running the peak loads, any future changes to your kWh usage, like buying an electric vehicle or installing a heat pump, etc.
Most of the solar PV systems getting connected in Ontario fall under the Net-Metering regulation. These solar systems are limited to 500 kilowatts in size and assume you “trade” electricity you supply for electricity you consume. When you provide excess energy to your local distribution company (Alectra, Hydro One, Toronto Hydro, etc.), they apply credits toward your utility bill.
- Ontario solar rebates
Both the Federal and Ontario governments offer solar incentives, such as rebates, tax credits, and grants, that individuals can claim to reduce the upfront cost of installing solar panels.
For example, Ontario has programs like the Greener Homes Loan program, Ottawa Better Home Loan program, Guelph’s Greener Home program, Toronto Home Energy Program, and Durham’s Deep Retrofit rebate, amongst others.
Participation in some of these programs may significantly reduce the cost of residential solar in Ontario and improve your system’s payback period.
- Installation complexity
The complexity of a solar installation can affect costs. Solar PV systems mounted on segmented roofs, with multiple peaks and valleys, different elevations, etc. generally cost more than the “single-run” simple installs. Other factors such as roof type (shingled, metal, wood shakes, etc), roof orientation (South, East, West), and shading problems can also affect the price.
Single-family detached houses typically have more roof space available, thereby offering more freedom in sizing and placing solar panels. Semi-detached homes and townhouses, on the other hand, may offer limited flexibility in panel orientation due to shared roofs, obstructions, and limited space.
- New technologies mean lower prices
Because solar is becoming increasingly popular, the price of a solar is coming down all the time. Home battery energy storage technology is slowly becoming the next significant trend in solar, and that could offer consumers a whole new set of options. In the meantime, thanks to current programs, it is an excellent time to consider solar for your home in Ontario.
