Solar panels are more affordable than ever - but it can depend on where you live

National Observer

3 days ago

When she looked into installing solar panels on her roof, Heather McDiarmid came across an unexpected hitch.
'We realized we'd have to tear out the panels again a few years after we put them in because our roof was getting old, and it was going to need new shingles. So we got our roof redone — but with metal shingles. That way it would last longer. And then we got our PV (photovoltaic) system,' said McDiarmid, a climate change mitigation consultant.
Solar panels have never been cheaper, and the lower upfront cost means homeowners can recoup their investment more quickly, with savings on electricity bills.
But experts say where buyers live plays the largest role in how long they'll need to break even. Location plays into factors ranging from how much electricity the home consumes to how much sun it receives, what incentives are available and even whether foliage obstructs the sunlight — or if roof renovations are needed.
Across Canada, the average installation cost for solar panels was $3.34 per watt as of fall 2023, or $25,050 for a typical 7.5-kilowatt system, which covers most of an average household's electricity needs, according to Energyhub.org. But the price can range widely, sitting as low as $2.42 per watt in Ontario but double that in Nunavut.
In Ontario, the average homeowner with a bigger installation — 10 kW — enjoys annual electricity bill savings of about $1,584 when charged at time-of-use rates, according to a report McDiarmid authored for the Ontario Clean Air Alliance last year.
That means an Ontarian, drawing on a new provincial grant of up to $5,000 plus an interest-free federal Greener Homes loan, might effectively pay $25,000 for a 10 kW system. If their electricity bill comes to $100 a month — $1,200 a year — the panels would pay for themselves in 16 years.
Solar panels have never been cheaper, and the lower upfront cost means homeowners can recoup their investment more quickly, with savings on electricity bills.
'Many single-family home rooftops can accommodate a 10 kW solar array or more, which is enough to generate as much electricity as the home uses over a year,' McDiarmid writes.
Solar panels convert sunlight directly into electricity, which then flows through an "inverter" to be used in the home, with excess electricity spilling onto the broader power grid.
Savings come not just from consuming less energy from the local utility but from "net metering," which allows homeowners to receive credits for the extra electricity they feed back onto the grid.
Banking electricity daily, monthly and often yearly is typical, said Joshua Pearce, a Western University professor specializing in solar photovoltaic technology.
'People go to their cottage during the summer, they generate a huge amount of solar power that then lasts them through the winter. They've banked that electricity,' he said.
Other key questions include how much electricity your household uses — higher consumption builds a bigger case for solar — and how much that costs, with rates varying from region to region. Another factor to consider: electric heaters suck up much more electricity than gas-heated homes.
'Essentially, everywhere that breaks the 12-cents-per-kWh bar, it probably makes sense to put in solar,' said Pearce. All provinces except Quebec charge a higher rate on average, according to Energyhub.org.
Also pertinent is not just where your home sits within Canada, but within the property itself.
A roof that faces south soaks up more rays, while a flatter pitch further improves efficiency.
'I've got half my garage covered (with solar panels) because that's the south-facing roof, and then a third of my main roof covered, that's my southwest-facing side of the building. That's what captures the most amount of sun, so you get the most bang for your buck,' said Phil McKay, a senior director at the Canadian Renewable Energy Association.
Installers can help with assessing where branches might need to be cut to absorb more light — though not all trees are yours to prune.
'I'm talking to you from the Forest City, and I love trees as much as the next guy, but not when they're partially shading my roof,' said Pearce from London, Ont., noting that many of those trunks are owned by neighbours or the city.
Another key variable in solar energy production is just how sun-kissed your corner of the country is.
The Prairie provinces enjoy the most hours of 'equivalent full sunlight hours' — a metric to quantify the amount of solar radiation for a given area in a year — followed by Quebec, Ontario and New Brunswick. British Columbia, the Yukon and Newfoundland and Labrador rank last.
Cost differences to link up to the power grid also vary widely. In Ontario, for example, the Ottawa utility charged $1,449 to connect panels with its grid in 2023, while in Sudbury, the charge was only $548, according to McDiarmid.
Jurisdictions offer an assortment of financial incentives.
BC Hydro and Ontario give residential users rebates of up to $5,000 on grid-connected solar panels and up to $5,000 for battery storage systems. Nova Scotians can tap into rebates of up to $3,000, Prince Edward Island residents $10,000 (the program is on hold for a review, but is expected to resume in the coming months).
Many municipalities have rebates for various home energy upgrades as well.
A checklist to run through if you're considering rooftop solar:
- Check your utility bill to tally how much you spend on electricity each year. In general, the more you shell out, the greater the possible savings from a photovoltaic system.
- Check the average rate your utility charges for electricity. Again, the higher the rate, the more potential savings accrue.
- Shop around for quotes from at least two or three installation firms. If their estimates on the long-term savings roughly align, those projections are probably not far off the mark.
- Make sure the size of the installation matches your electricity demands. Don't splurge on a system that exceeds your needs.
- Ask how efficient your system will be due to the slant of your roof and the directions it faces.
- Research how much sun and snow your region receives.
- Find out whether your municipality requires building and electrical permits to install solar panels. Many cities do, with the combined cost often topping $1,000.