Capitalizing on a Solar Opportunity
By Toby Heaps
“Oh Mister Sun, Sun. Mister Golden Sun. Please shine down on me.”
Now your financial planner can sing along too with Ontario’s promise to pay 80.2 cents/kWh (about 13 times the going rate for electricity) for all the solar power you can harness on an average-sized roof and feed into the electricity grid over the next 20 years. Ontario gets a lot of sun, similar to Miami. The Ontario government’s goal is to get to 100,000 rooftop solar installations, which would provide a little over one per cent of overall installed power capacity in the province.
Why is the Ontario government doing this? It does make the electricity grid more resilient, but the more likely reason is that it democratizes green energy by allowing passive electricity consumers to become active electricity producers. Hundreds of thousands of solar panels gleaming across Toronto’s rooftops will raise awareness, and inspire us to take more power over our electric power in matters of making it, appreciating it, and conserving it.
Some opponents of solar PV electricity claim that it takes more fossil energy to make solar PV panels than they produce during their lifetime, but with production efficiencies and material recycling the ‘energy return on energy invested’ for solar panels is now 1.5-3.5 years, and the panels can last as long as 40 years.
So who wants to exploit the labour of the sun and receive a regular cheque from the power company? If your home or condo roof is in good condition and free from the shadows of trees and other structures during the sunniest hours of the day (10am-3pm), then you are a prime candidate. The other matter is money. If you can pay in cash, installing a 2kW Solar PV system on your roof (at a cost of $20,000 all in) will reap a 20-year annualized return of 3.4 per cent ($1,684 per year), compared to 2 per cent from a Canada Savings Bond. A crude rule of thumb is that for every installed kW you are looking at about 5 panels, $10,000 up front to do the complete install, and about $1000 per year in cheques sent to you from your local utility–not to mention displacing about 250 kg of greenhouse gases per year.
Select banks and credit unions are offering mortgage re-advances, renewable energy home renovation loans and other financing options applicable to solar projects.
Once you decide you want to become an energy producer, the first thing to do is consult Ourpower.ca, which has local groups all over Toronto and can provide crucial references to help you navigate everything from getting permits to credible installers (that meet the 40% Ontario domestic content threshold) and access to bulk buying discounts.
Regarding taxes, PV systems qualify for a federal capital cost allowance, which eliminates any obligation to pay tax on the earnings from the system until the capital costs is fully repaid. A Retail Sales Tax (RST) rebate is also available with the purchase of any solar energy system, and while a solar system will increase the resale value of your home, going forward this increased value will be exempt from property tax re-assessments.
Here’s to sunny days ahead.
Please write us with your solar adventures at editor@ourgreenhome.ca
Going Solar Resources
www.bullfrogpower.com/solar (for solar water heaters)
www.mondial-energy.com (if you live in condo with more than 50 units)
Toby Heaps is editor of Corporate Knights.
