Solar power: Does it make sense in Victoria?
Somewhat offtopic from housing, but I’ve always been interested in solar power, and I used to promote a DIY solar option in town that helped people install their own panels. However they recently shut down, so it sparked another look into what the current options are, and whether it makes sense economically to do solar right now.
The good news is, the price of solar power is still coming down. Last year I was able to put parts for a 10 panel system together for $2.54/Watt, while one year later a comparable system is down to $2.18/Watt. Personally our roof is too shady for solar, but my brother is considering it so we decided to do some calculations on what the current economics of solar are in Victoria. However I found it quite tricky to actually figure out the return on investment from solar in Victoria. The installers and promoters tend to give very optimistic estimates of return with no details on how this was calculated, and the really good tools like Google Sunroof are only available in the US.
Turns out Victoria is quite well suited in terms of solar exposure. We’re not the prairies or California, but you can expect that 1000W of installed solar capacity (3 to 4 panels) will generate about 1100kWh of power per year (about $150 at today’s hydro rates). That’s enough power to drive 5000km in an electric car.
But is it worth it? Unlike in other areas of the country, we already have almost 100% clean renewable energy in the form of hydro, so you won’t be reducing any greenhouse gas emissions by replacing hydro with solar. Which leaves the economics of the situation (and the possibility of the smug feeling that you’re not paying a hydro bill).
To accurately compare solar to any other investment, you have to calculate the return on the initial purchase price, and for solar that is usually done over 25 years. The panels should last much longer than that, but some other electronics (inverters) may need replacing so for simplicity we assume that the entire system is worth zero after 25 years. Then we calculate the percentage return on investment given the power produced and an estimate of hydro rate increases over that period.
What’s the result? Well if you put the panels up yourself, you can get a modest return from solar. For example, a relatively small 2.6kW system that you put on the roof yourself ($5800 in parts) and have an electrician hook up (~$2000) will give you an annual return of 2.4% for 25 years. Double the system size (20 panels) and your return increases to about 3%. Not great but not bad for a safe return and of course that is after tax.
Solar Return for a DIY 2.6kW System
The extra labour costs in professionally installed systems will suck up some of that though. Based on some quotes for larger systems of about 20 panels, return would be about 1.5% annually.
If you want to test out some scenarios of your own, we’ve developed this spreadsheet that will figure out your return, as well as cost of power generated over 25 years.
Download in: Excel Format or OpenDocument Format
If we had better conditions on our roof, I’d put up a few panels now, get the place wired for it, and then likely hold off any further expansion for a year to see if installation incentives are coming either from the feds or the province. Especially if they kill Site C I imagine they will start to push harder on other renewables. From a property value perspective, I suspect that solar panels would increase your property value due to decreased operating costs, however I can’t actually back that up. You can buy components from WeGo Solar and there are also some local installers around. The app Solar Consult is a good one to estimate solar potential on your roof.
Anyone out there have solar installed or is considering it? How did you do the install? Anything you learned in the process?
Hi Leo, Sorry that you didn’t see the levelized cost – sometimes if you click through the tabs too quickly it doesn’t carry the numbers through, but when I put in Victoria, BC, the levelized cost is $0.12/kWh which is slightly higher than the average utility rate in BC (we don’t have the utility rates at the local level for Canada – we use provincial averages). Thanks for the suggestion about adding percentage annual return – we’ll look into it!
Hi Simone, thanks for commenting and nice tool. For some reason it says levelized cost of energy is NaN $/kWh at the end.
The savings are nice, but the reason I made the spreadsheet is because I wanted to calculate percentage annual return which I have never seen a tool do. Would be nice if you added that to your calculator, then mine is obsolete!
It’s great to be thinking about solar energy, especially if you have a roof free of shade. Many residents of BC have already made the transition. To help homeowners figure out if solar energy is right for them, we built a tool that works in Canada for estimating the solar potential and for calculating your potential savings, Sunmetrix Discover (http://sunmetrix.com/solar-panel-calculator/) . We also have a lot of great solar resources for Canadians in our Learn section. In particular, our page on solar incentives in BC might be helpful (http://sunmetrix.com/solar-tax-credits-incentives-and-solar-rebates-canada/British-Columbia/). However, as the author pointed out, there is not a great solar rebate in BC yet; the PST exemption offers some minor savings. But we keep the site up to date, so if and when BC decides to make solar more of a priority, we will add any relevant info there.
That explains it. We are with you Deb about the cloth line. We just came back from 5 weeks France trip, and found that a piece of robe is part of our travel essentials as much as suitcase and hat. We also use cloth line only at home in summer.
But starting from now and until next April, cloth just wouldn’t dry on cloth line outside or inside, unless you live in a apartment with good heating and low humidity level. With baseboard heating set at 19 or 20C on at-home and daytime only and humidity level around 60%, you have to use the dryer a bit. Otherwise the cloth just won’t dry in a day, that they smell bad and you have to wash them again. Turn up heaters to dry cloth in a big house probably is not as efficient as the dryer.
We all want to do the right thing, but sometimes you need to be flexible a bit to achieve better result. Also it is probably a good idea not to judge others as they may live in a different type dwelling with different humidity/heating environment.
Well said, sir.
Possibly. But promoting an anti-scientific approach hurts all causes. If many people say a focus on GHG emissions is due to corporate and political brainwashing, then that reduces trust in scientific consensus about other pollution, such as Neonicotinoids.
You can see this happening in the US. The administration and the head of the EPA is anti-science and doesn’t believe in global warming. Once you throw science out the window in one area, it becomes much easier to ignore it in all other areas. Hence they have withdrawn from the Paris agreement but also lift regulations on local pollution.
It’s not an either or thing. You can fight global warming and local pollution at the same time.
LeoS, you read way more into my post than I actually wrote. My simple point, stated succinctly without details, is that toxic chemical pollution will kill us all long before an overheated planted will kill us. Using one expanded example from my earlier post; if bees are wiped out by chemicals the planet will lose over 75% of its food crops.
Me too, also have no dishwasher. I was just trying to stay on one small subject which in my mind is such an easy power saver I don’t know why more people don’t do it.
I have to say, having recently returned from a year in Italy (work related) I am so envious I could almost cry. However I would still line dry there as do many Italians. We never did see an apartment to rent in Rome that even had a tumble dryer.
LeoM, while I agree that chemical pollution is also very serious, the solution to making people care about it and enacting change is not to cast doubt on the facts of global warming and characterizing it as some kind of global conspiracy. A culture of anti-intellectualism hurts all causes that rely on the scientific method (such as testing the effect of pollution on living organisms).
All this talk about green house gases shows the corporate giants have successfully brainwashed everyone into a diversion from the real problem. Granted GHG will make the planet slowly warm and eventually we could enter a new Carboniferous period where plants, trees, ferns all grow to enormous sizes within 10 years from seed germination (I already know ferns don’t grow from seeds, so shut the fuck up Introvert).
Corporations and politicians have used GHG emissions to divert our attention from the toxic chemical pollution that is killing the planet far faster than GHG will cause an overheated planet.
Just look around your house at all the toxic chemicals, long chain carbon molecule based synthetic chemicals, neonicotinoid pesticides on every vegetable you eat (even on organic due to spray drift), roundup residue on 95% of wheat (it’s used to kill the wheat plants prior to harvest to facilitate drying), pharmaceuticals in our inland waterways and oceans, lithium battery manufacturing byproducts dumped into the oceans, Bisphenol A and dozens of other Gender-bender chemicals and plasticizers that screwup the body’s chemical systems causing young boys to acquire female endocrine traits and young girls to acquire adult traits at 8+ years of age, synthetic fragrances in air fresheners and laundry products that are made with carcinogenic synthetic chemicals so toxic the EPA has banned some of them at the one molecule level, off-gassing chemicals in new cars/furniture/carpets/faux wood products/ that are persistent synthetic chemicals that enter your body and never leave because your body can’t metabolize them.
The global corporations that produce the chemicals that are poisoning the planet and all living organisms are excellent at two things: brainwashing the masses and making profit at the expense of everything else.
GHG is a minor irritant compared to the damage from chemicals that are rapidly ruining planet earth and all inhabitants.
@Deb, I guess if I was less of a provocateur I would have said something more along the lines of….
I get your point but one could always argue that nothing is better than anything when it comes to carbon footprint. My wife’s sister was bold enough to go no dishwasher. She had three kids even…. They are vegan too… I respect that but I admit to being hedonistic. like dishwashers and bacon. I do other things because I do feel for Mother Nature. But I don’t pick one thing and then do nothing of that, like eating meat. I’m not a vegetarian but I eat vegetarian most of the time….
Deb:
I am happy to support all the initiatives here in Victoria since I am moving to that hell hole of a back water small town called Lugano. But it will warm my heart to know that Victoria is at the forefront of progress. I will have to satisfy myself with living in a much smaller town without all the advantages of being in a city. I guess the trade off is having waterfront with a nice dock to sit on in the evenings.
Ah ok. Yeah makes sense. Also saying anything will outlast a Chevy is I suppose not a particularly strong statement 🙂
The batteries had a ten year warranty. So I would guess they would outlast the car too.
I think the discussion about investment decisions, life style and carbon footprint confirms that, even when people wish to act responsibly, it is difficult to make the best decisions. For that reason, a carbon tax seems the best means to curb anthropogenic carbon emissions. With a carbon tax, people will be guided to reduce their carbon footprint on the basis not of their own complex and often faulty calculations relating to every aspect of their lives, but simply according to the normal consideration of cost and value for money of whatever it is they are inclined to buy. Meantime, suppliers will be doing the complex calculations relating to their particular industry in order to reduce carbon emissions in the most cost effective way.
Nice. HHV tour when it’s done??
Doesn’t add up. The only plugin hybrid electric car with a range worth mentioning is the Chevy Volt. The batteries on that are excellent and will outlast the car.
Depends. Last Monday/Tuesday was 33 sales. Week before, 51, before that 30, then 35. You’re probably right about 31st of the month though. Good point about the weekly numbers as well, they vary quite wildly so that’s the last time i write a post on one week of data. All depends on how prompt agents are on entering the sales.
Interesting that the new government stopped publishing foreign buyer statistics. The last data point is May 2017. Nothing since then. I asked them if they intend to keep publishing that data, no response yet.
Agreed, as it related to drying clothes.
@Barrister
Do I detect some sensitivity in the drying area?
Going from the sublime to the ridiculous is a great start when it comes to negating mans impact on the earth. However, if you want to take action and personally start the swing toward lessening the GHG effect please feel free. Turn down the thermostat, sell the car, go vegetarian, oh and line dry. I will applaud you and think of the kudos you will receive from the other folk on this blog.
I think quoting Bearkilla will suffice.
Deb:
We should also mandate that houses are not heated above 50F (10C) that is more than enough if you wear a sweater. I am hoping that in two or three years we can ban all cars from Victoria as well. Buses and bicycles should be more than enough for people.Perhaps a 150% environmental tax on meat products would encourage people to be vegetarians. An even higher tax on coffee shops would also be great for the environment.
The conversation had turned to carbon footprint and water. Industrial farming, livestock in particular is the biggest water hog and destroyer of the environment. Choosing to line dry or not is meaningless in comparison.
What does that have to do with drying clothes. I am well aware of the amount of GHG produced by live stock but that was not relevant to this particular discussion.
And I appreciate your capitulation.
@ Deb:
” What evaporates naturally from oceans, lakes and plants and what is produced by industry far exceeds, line drying.”
Yep, we should cut down all those pesky trees.
“but you still have the carbon footprint produced when you manufacture/use and then dispose of the dryer.”
Quite right.
I capitulate.
I hope you are a vegetarian Deb.
Yes but you still have the carbon footprint produced when you manufacture/use and then dispose of the dryer. There is no competition! I challenge you to find one site that produces evidence that any form of mechanical drying equipment is more environmentally friendly than line drying.
Although water vapour traps greenhouse gasses which has a detrimental effect on global warming. What evaporates naturally from oceans, lakes and plants and what is produced by industry far exceeds, line drying.
The larger impact on water evaporation is global warming and manufacturing of all sorts effects this. Not line drying clothes.
http://www.waterandclimatechange.eu/evaporation
The only possible reason to argue for machine drying over line drying is if you like soft towels or the smell of antistatic cloths. If this is the case just say so. To each his own.
The number one emitter is so called green house gases is the respiration from humans. There’s only one logical conclusion here. You’ll have to off yourself to save the planet. You first comrade.
@ JD:
Re: investment in an electric car
“In about year 7 you would see a positive benefit.”
But remember the saving on gas is, in part, a taxpayer subsidy (which would have to be eliminated if everyone goes electric) since there is no equivalent to the gas tax on electricity.
@ Deb:
“I wonder where you think the water vapor goes when you use a dryer? ”
If you use a heat pump drier, the water goes down the drain, not into the atmosphere.
We are installing a heat pump dryer. No need for another large hole in the house to evacuate your space heat and it’s more energy efficient. This is an easy decision if you don’t mind having mismatched laundry and only one product option. We also have a large laundry room to facilitate air drying without scattering clothes over every rail and door in the house… These areas where it’s just a premium on something you already need like windows, walls insulation etc AND where it makes your house also more durable and comfortable are easier to justify.
The reason I desire solar is to be off grid. Got water, my own sewage treatment, it’s only power that I need. But it’s even more money since we would need batteries as well. Thus this will have to wait….
Speaking with a person today that had a home station sent to him from California and installed by a local electrician for $1,300. He paid $32,000 for his hybrid electric car or about $10,000 more over a conventional gas driven car. His wife uses the car everyday to drive to Brentwood and back and their extra electric costs are $18 a month. They do charge about once a week at a shopping centre station. Battery life is 8 to 10 years. I’d guess she would be spending $150 a month on gas if it were a conventional car.
In about year 7 you would see a positive benefit. And in year 10 you may have a large outlay for batteries at a current cost of $4,000.
I wonder where you think the water vapor goes when you use a dryer? “A dryer can vent two to three gallons of water during a normal cycle for a full load of wet laundry.”
https://www.seattletimes.com/life/lifestyle/how-to-properly-vent-a-dryer-to-avoid-water-woes/
Here are the figures, not to mention how many greenhouse gases are produced during the manufacturing of the dryer/heat pump etc. Lets see, a piece of rope vs a dryer, no brainer!
http://sustainablepersonalfinance.com/go-green-and-save-money-line-drying-vs-clothes-dryer/
@ Barrister:
“Here are a couple of more slam dunks. Get rid of the TV and stereos, books from the library work fine.”
Nah, by the time you’ve driven your Mercedes G-class SUV with V-12, 600 hp, turbocharged motor to the library, it would have been better for the environment if you’d stayed home and watched the tel.
@ Deb
“Here is a slam-dunk for you. Bring back good old washing lines”
Dunno about that. Remember, water vapor is a much more powerful “greenhouse gas” than carbon dioxide, so the climatic effect of drying your clothes outdoors may be greater than that of using a heat-pump electric (gas-turbine powered) clothes drier, although I don’t have the energy right now to do the numbers.
“IMHO batteries are the future. They’ll get more energy-dense and most certainly pass gasoline or diesel.”
I guess that is what the Detroit Electric Co. said in 1914, but we’re still waiting. As it is, we have the Tesla 100 kwh battery with an embodied energy content equivalent to 18 tons of carbon dioxide (for which reason it has been proposed in Norway to eliminate tax incentives on Tesla automobiles).
Here’s the real future of electric cars: $10,000 in China, or only $5000 after the government incentive.
Deb:
Here are a couple of more slam dunks. Get rid of the TV and stereos, books from the library work fine.
Don’t need all the electric clocks either. Don’t need a vacuum cleaner either; the old broom sweepers work fine. Ban electric or gas lawn mowers, hand mowers also work fine. Don’t need electric blenders while I am thinking about it. The list just goes on and on.
Batteries also have the distinct advantage of not requiring an apparatus to somehow generate rotational energy from thousands of tiny explosions a minute. The concept of gas-powered engines sounds insane when you think about it.
Here is a slam-dunk for you. Bring back good old washing lines and dump the dryer. The savings are great and your clothes will smell better too!
IMHO batteries are the future. They’ll get more energy-dense and most certainly pass gasoline or diesel. There is such a huge amount of research and resources being poured into this currently.
Solar thermal (hot water) does make a lot of sense – I used to have a 120-tube system and it could heat 500L of cold water to just under boiling in an afternoon of sun. That said, there was a fair bit of maintenance, and the municipalities are scared of them and require premise isolation and yearly testing. I’d do it again on a long-term place, though I think I prefer the idea of PV now.
@Leo – currently building. Pre-certified as passive so assuming I don’t mess up too much I’ll get there.
Energy saving by driving a Prius? I sincerely doubt it. I am unfortunate enough to be driving one of these lumpen conveyances in the UK at the moment and it by no means exceeds the efficiency of a BMW diesel.
Mazda will shortly be giving us a gasoline engine with diesel efficiency and it will be a thing of beauty. Dragging hundreds of kilos of batteries to and fro across the landscape is no solution.
Tesla Model 3 is the same weight as a BMW 3 series. Rather be dragging hundreds of kilos of batteries versus hundreds of kilos of moving parts.
Yep. We sell our extra electricity to Alberta and Washington State. I think it actually offsets coal fired generation though, so even better. + less mercury.
15% below last year’s sales rate. Should expect another 35 sales or so to finish off the month.
I would peg it closer to 50; Mondays are typically 30-unit days in this market plus a 31st business day is always a bit busier than a non-end of month equivalent business day.
I’ll wait for Hawk to accuse me of pumping the market….like I was accused earlier this month when I came out and said we would clear 600 🙂
Leo is much better with the numbers but being on the ground really helps with short term predictions. Earlier in the month I was involved in a 7 offer and 8 offer scenario on properties that weren’t severely underpriced; therefore, the slow numbers out of the gate just didn’t add up to what was actually going on in the marketplace.
Or maybe solar windows will prove (eventually) better than rooftop solar.
You can even bet on solar windows, though I wouldn’t. (This is not the only startup in the field.)
“Solar is the way to go long term imo if we can solve the storage issue without resorting to current battery technology.”
Grow more trees! If the Province were to place forest management on a sustained yield basis, while increasing standing biomass by 100 tons of carbon equivalent per hectare (0ver today’s low, second-growth and burnt-land values) we could soak up BC’s carbon emissions for a 100 years, while increasing eventual yields and quality of lumber. In the process, we’d store about 6 million terawatts of energy in the form of firewood.
I would say that we are edging towards a more balanced market but October is not the best month to figure out where the coming year is heading. It might be safe to say that the market is no longer blazing red hot.
Weekly numbers (Week 4):
15% below last year’s sales rate. Should expect another 35 sales or so to finish off the month.
The IPCC has studied this in depth and lifecycle greenhouse gas emissions are still much lower with hydro taking into account all sources of warming gases.
(not sure why max is 2200 though)
https://en.wikipedia.org/wiki/Life-cycle_greenhouse-gas_emissions_of_energy_sources
Energy saving by driving a Prius? I sincerely doubt it. I am unfortunate enough to be driving one of these lumpen conveyances in the UK at the moment and it by no means exceeds the efficiency of a BMW diesel.
Mazda will shortly be giving us a gasoline engine with diesel efficiency and it will be a thing of beauty. Dragging hundreds of kilos of batteries to and fro across the landscape is no solution.
Hot water is the second biggest energy hog in the average household, only surpassed by home heating costs. Solar energy is only a reasonable investment if you’re just using solar to pre-heat your water. Solar hot water heaters are cheap, you can DIY, and you don’t need an expensive vacuum tube system just to pre-heat the water going into your hot water tank. All you need is some imagination and basic plumbing skills to build and install a simple pre-heater. Caution: you need a pressure release value and an expansion tank because even simple systems can pre-heat the water to 160F on a sunny day.
Not sure why it’s assumed hydro electric is close to 100% clean renewable energy. Flooding all that land creates a lot of methane which is around a 25 times more potent greenhouse gas than CO2.
Solar is the way to go long term imo if we can solve the storage issue without resorting to current battery technology.
If you save electricity there will in theory be some extra electricity for Hydro to sell elsewhere – most likely displacing some natural gas fired generation which is the marginal kilowatt on the North American grid. So probably your solar will be reducing a small amount of GHG emissions.
That said there are much better ways for an individual to reduce GHGs:
Buy a more efficient car, a hybrid car, or an e-car
Bike or walk occasionally instead of driving
Cut out a portion of your air travel
Insulate your house better
A spelling Nazi without an English degree is an even scarier thought.
Bike or e-bike!
@Sidekick What happened with your project? Did you end up building passive? How did it go?
@CS – all correct, although the heat-pump stuff is just a variation on the theme of ‘green’ systems. Finding the magic line where people don’t have to give up much (or anything) is a bit more challenging – especially when it costs more up-front. This is why Passivehouse is appealing to some – it’s very simple and not too much more cost. More insulation (relatively cheap, doesn’t break, no maintenance), fancier windows ($, but also don’t break and no maintenance), and an HRV (8K, but really very little maintenance).
Then you don’t need a heater at all (well, just a small electric resistance will do for the cold periods), although I admit to wanting this: http://www.smallplanetsupply.com/sanden/
The best payoffs are mainly achieved, I would bet, by investment in energy conservation. In fact, if you invest in Prius instead of a BMW, there’s a huge energy saving at less than zero cost. Even better would be to live in a condo and walk to work, rather than commuting to town from a house in the suburbs.
There are many other options. A heat pump cloths drier is supposed to save an average of around 900 kwh per year, or about $100 on your Hydro bill, which, I suspect, would translate to a good return on investment. Likewise, heat pump space heating and water heating versus electric resistance heating, and perhaps even gas, should give a significant return on investment, although uncertainty about maintenance costs may make the actual return on investment in a heat pump difficult to estimate.
Better still, would be to avoid conference travel, holiday travel and attending distant funerals and weddings. For example, a business class round trip from Vancouver to London England produces 3.5 tons of carbon dioxide.
Yes, I’ve had someone that installed solar make that argument (put it on a HELOC and the interest is less than what you are saving on hydro) but unless you are taking into account the lifespan of the panels this argument is misleading. Yes the hydro savings can more than pay for the interest, but to make it a fair comparison, you need to amortize the loan over the same 25 year period.
As an example, one estimate I got was a 5.8kW system for $21,500 installed. Amortizing that over 25 years at 3% is $101.75/month. It generates 6280kWh per year, so the price of hydro would have to be greater than 19 cents/kWh to make that work.
Doesn’t matter what you use the power for. The economic case for an EV does not change if you use solar power, and vice versa.
Finally a use for those contaminated industrial sites.
Would be nice if there was an easy way for a retail investor to just invest in those solar projects but I haven’t found one.
There are very few ‘green’ technologies that are slam-dunks in terms of raw $ investments in this part of the world (ie, where energy is some of the cheapest on the planet). In Europe, for example, you notice much higher adoption of these technologies with the corresponding higher energy prices.
The way I typically see these types of calculations (and the way Passivehouse is typically framed) is to use leverage. Borrow 5K for the solar, use the hydro savings to pay the interest and principle. Your borrowed money is deflating over time while energy rates are presumably inflating. Of course, this only works while interest rates are low-ish (say <7%).
I’ve even heard some lenders will lend more for building high-efficiency or energy-savings as they know it will lower the running costs. If you have the roof, I can’t really see any argument against solar, except for the potential liability if interest rates skyrocket.
As a side-note, I had solar-thermal on my last house (I DIY’ed it when there were government incentives) and they were a turn-off for most of the house hunters. Partly it was the aesthetic and partly I think the fear of the unknown/complicated systems.
Below is apparently the latest constituency letter from Attorney General David Eby, in which he speaks about housing. I’ve been curious about this, as David was very outspoken about this matter before the election, and then after fell largely silent. It looks as though they’re still planning something to address many of the pressing issues around housing, but we’ll have to wait and see what it is. Good to know it’s still on the radar.
Housing
“I sit on the new government’s Housing Cabinet Committee, where I am supporting my colleagues in their work on several initiatives related to increasing affordable housing supply, but also, and just as importantly, addressing the toxic speculation, money laundering and tax evasion which we know is taking place in some areas in the
province, especially in the Lower Mainland. Stay tuned for important announcements on this front.
For Vancouver, addressing immediate supply issues has meant my colleague Selina Robinson has rolled out funding for 2,000 modular housing units for those living on the streets right now in BC. This will result in hundreds of units of modular housing for Vancouver, which we hope the city will be able to deploy to house people living in a near permanent tent city on an industrial site in the Hastings area.
People living in similar tent cities in Surrey and Maple Ridge will also hopefully be benefitting from this initiative which will deploy housing units across the province for emergency response to an out-of-control homelessness problem.
Selina has also introduced legislation to fix the “fixed term lease loophole” being abused by some landlords to avoid provincial rent control rules, and increased funding to the Residential Tenancy Branch to reduce backlogs and improve services for tenants and
landlords alike.”
I’m sorry, I don’t have a direct link, so you’ll need to go look online if you want to corroborate. You may be able to see it via #vanre.
What about the payback period if you were using solar power for an electric car, electric lawn mower, leaf blower etc. Replacing solar power partially or fully for these gas operated equipment?
It’s a complicated question to answer whether to spend $5,000 to $10,000 on panels as well as a higher cost of an electric car. I would guess that more people would adopt solar energy if there was a program that would allow a home owner to finance the home station at a low monthly payment.
The current consensus is that rooftop solar costs two or three times as much as utility scale solar (and that’s assuming both are as favorably situated, i.e., California or Hawaii, not British Columbia). So I don’t see much moral payoff for rooftop solar. It makes poor use of investment capital (and physical resources) and yields a correspondingly poor payback.
However, if you want off-grid power or backup in the event of an outage, rooftop solar may make sense, although the chances are that a long power outage will occur on a dark and stormy winter’s night when daytime solar radiation is a mere tenth of what it is in midsummer, meaning that your solar panels will be hard put to boil a kettle, let alone heat the bathwater.
You could add a Tesla 14 kw PowerWall battery, which would give you solar power stored over a period of days, but, for backup, it would be both simpler and cheaper to store power from the grid.
Gee, I wonder what these numbers could mean! Wouldn’t it be fun to look at your musings about numbers from seven years ago? I think so.
Looks like the market eventually stabilized at $800k.
John Drake: Thanks for the numbers. I am assuming we are talking about SFH and not condos. A slight drop from last year but I would not read too much into it. But certainly not a frenzy.
A few years back I gave a brief thought to solar panels but the Historical society people stopped that idea cold.
Introvert attacking another person’s credibility while at the same time disrespecting everyone with a degree in English.
https://youtu.be/jH-mhZLuGRk
We’re at 135 house sales so far this month in the core. Last year we had 152. The year before we had 204 and the year before that 175.
Not quite but getting pretty close. Compared to throwing money into a high interest savings account you are probably already ahead. The issue is the timeline. If you sell in 10 years, the panels would hopefully increase resale value otherwise it doesn’t work.
Makes sense. And in 5 years I bet the return on even installed solar will be above 3%
I know that you stated that house sales are down 40% from the spring but how do they compare with sales at this time of year in 2016?
I dont have a crystal ball but if I had investment properties in Victoria I would be looking to unload them now. But I am wrong as often as I am right.
Readers, do you recall my bragging about having an English degree? (And who would brag about having one of the most economically useless degrees?)
I believe I’ve only ever mentioned it once.
On so many fronts, you really have no idea what the hell is going on, do you?
Considering what is happening to Toronto’s condo market, it may be prudent to wait and see what may happen here. The MOI for condos in the core has increased from last month but nothing alarming. Condominiums are expensive but not out of reach for most home owners looking for rental investment albeit with negative cash flow. I suppose that would make them more speculator than investor.
Active listings for condos in the core are at their highest in the last 15 months while sales are at their lowest since January. Maybe when the new house assessments come out this January, home owners will once again want to add another condo to their real estate portfolio using their line of credit.
I have some concerns for new homes in Langford. I feel that they are over selling and like the goose that laid the golden egg the high prices could cook that goose. Spending over $750,000 for a house in Westhills does seem ludicrous since you’re buying a home in Langford that is big enough for your family but now you lose that family space as you have to rent the basement out to make the mortgage.
It appears that house sales in the core are down 40% from the spring while the number of active listings is marginally higher by some 5%. That puts the months of inventory at roughly 3.4 for houses in the core. You would have to go back to 2014 to find an October higher than we are today.
Back when oil prices collapsed in 2016 and a lot of Alberta workers came to Victoria and bought homes with their severance pay the months of inventory had fallen to a little over one month. Since then the MOI has been trending higher. We are still well under the 6,7,8 and 9 MOI that we experienced in the fall of 2012 when median house prices in the core were declining. So I don’t expect any relief for those people looking to buy in the immediate future until the MOI gets much higher.
During the last credit crunch, the MOI doubled almost instantly but I don’t see that happening. More likely we will just have a steady increase over many months with median prices in the core declining slowly.
Everyone makes mistakes Introvert. I understand you were pressed to get your message out and did not proof read. I don’t have a degree in English like you’ve told us ad nauseuam you’ve earned, so maybe you should learn to lighten up on some of us mere mortals. Maybe with a little humbleness you’ll learn to be a gooder person.
Solar cells aren’t quite ready for the average homeowner yet. But, Multi-junction solar cells will change the economic viability when the prices come down after the technical hurdles are solved. Scientists in China are focused on multi-junction solar cell technology which will rapidly enhance the technology and bring prices down, but that’s still a decade away.
https://m.phys.org/news/2013-02-multijunction-solar-cell-efficiency-goal.html
https://en.m.wikipedia.org/wiki/Multi-junction_solar_cell
https://www.solarquotes.com.au/blog/uv-solar-panels/amp/
Leo fixed a different self-correction of mine recently, so I thought he might be gracious enough to do it again.
And I didn’t ask Leo to proofread, so maybe you don’t know what proofreading means.
Perhaps you should get back to doing what you do best: misreading the future of our real estate market.
I think he has better things to do than do your proof reading for you!
But human life expectancy is apparently greater in a marine climate!
Leo, add a “to” in there for me, please 🙂
The life expectancy of solar panels is apparently shorter in a marine climate. Now why does that not surprise me.
A return on investment ROI is used to compare two or more investments. For example if you wanted to compare installing new windows to installing solar panels which would give you a better rate of return. You can calculate the ROI for the solar panels but that doesn’t tell you how good of an investment it is unless you relate to another similar type of investment.
What you’re trying to determine is the Payback on solar panels or how long before the project breaks even.
Discounted benefits less the discounted costs for each year until you get a positive result in one of the years. That’s not the same as the manufacturers estimate of the life expectancy of the solar panels. You would also have to consider how quickly the solar panels you installed would become obsolete. You might also want to consider how long you wish to keep your home.
Anyone remember those massive satellite dishes people use to have in their back yards? Now it’s a pizza sized dish on your roof. Or if the payback period for solar panels is 15 years and you’re going to sell in the next five, then it may not be a good use of your money.
I want get solar panels installed someday.
I wouldn’t do the installation myself as my DIY expertise/desire ends at replacing the kitchen faucet. And the roof is one of the last places I want to be “seeing if I can do it.”
In terms of economics, the up-front costs combined with the small ROI mean that we probably won’t go solar in at least the next five years. We’d rather aggressively pay down our mortgage, whose interest rate is currently at 2.99%, which is double the 1.5% annual return on solar that Leo calculated.
I hope the economics of solar continue to improve so that its adoption might also.
Great post, Leo!
I’m also curious how you calculated the BC Hydro prices. Did you factor in the 3.5% increase in 2018 and the 3% in 2019?
https://www.bchydro.com/about/planning_regulatory/regulatory_documents/revenue_requirements.html
I’d also estimate future annual increases on the high end, as BC Hydro is deeply in debt (thanks, BC Liberals!).
The DIY portion of putting the panels up on the roof is very easy. Super simple mounting and microinverter connections. Might put together a guide if we go ahead with an install on my brother’s place. You just need an electrician to do the final hookup (and run the conduit if you’re not comfortable with that stuff).
12.87 + 5% rate rider + 5% GST. However you are correct that this depends on your electricity consumption. If you are hitting Stage 2 in the summer, then this works but if you are only hitting Step 1, then the rate should be 9.45 cents/kWh.
For us, we are just barely under step 2 in the summer, and over in the spring/winter/fall, so it would be somewhere in between. Likely averages to about 10 or 11cents
Will installing solar panels increase the value of your home?
Yes and no.
There are a few choices in the ways we heat our homes today. Electric, gas, oil – are you currently willing to pay more for a house that has the lower cost heating source? Are you willing to pay more for home that has a high efficiency furnace over a standard quality furnace? I suspect that most never even thought about this when buying their home as it was tough enough finding a place in their price range rather than quibble over electric versus gas.
How about curb appeal? That effects price, and solar panels are not attractive.
However, if you are building new and want to sell fairly soon, then your home will attract buyers that want to be on the cutting edge. Much like Westlake did with their geo-thermal furnaces. Because the concept was new to Victoria, the developer could recover the costs.
Now that any new construction in Westhills will no longer be geo-thermal but natural gas it might be possible to track any price differences attributable to the different heating sources when it comes to re-sale. The same builders, the same style of homes, the same sizes only the heating source has been changed. A possible beginning for a thesis paper for some of you budding environmental students?
I like the idea of solar panels to offset the cost of an electric car. Because car gas is expensive. That’s where you would see the savings in your wallet immediately. It’s the combination of the two that make solar panels so desirable and you can install these panels in your backyard which can track the sun.
It might be a profitable venture to install electric car refilling stations using solar panels in back yards. A joint venture with the companies that sell electric cars in your area and you’ll have a steady flow of work. Especially if you can get the car company to finance the home station. I think most people would have a home station if they could finance it with the car for an extra $25 or $50 a month.
Interesting what happens when you take the Chinese money out of the real estate market. It tanks.
Manhattan Office Bubble Fizzles Without Big Chinese Buyers
Sales volume in Q3 plunges 67% from a year ago.
“Manhattan, the biggest most expensive trophy market in the US for commercial real estate, used to be particularly appealing to exuberant foreign investors, such as Chinese conglomerates. But in the third quarter, sales volume of large office properties (minimum $5 million and 50,000 sq. ft.) plunged 67% year-over-year to $991 million, the lowest in five years. It was down 90% from the peak in Q1 2015.
But now the large Chinese conglomerates that had considered the Manhattan office market their trophy hunting grounds were absent.
This absence follows the crackdown by China’s State Council on cross-border transactions. Its guidelines spell out what Chinese companies can and cannot acquire overseas to “promote healthy growth of overseas investment and prevent risks,” as the guidelines said.”
http://www.zerohedge.com/news/2017-10-29/manhattan-office-bubble-fizzles-without-big-chinese-buyers
Thanks so much for this.
We would love to install solar and our roof faces south, but we wouldn’t be able to DIY the project so that increases the costs.
We did the math and came to the same conclusion as Dasmo – the up front investment is not worth it quite yet. I’m hoping that the government brings in a good incentive program like they have in some parts of the US.
Also, where are you getting the 14 cents per kilowatt hour rate on your chart? I thought the current step 1 rate was 8.58 cents per kWh plus 5% rate rider and 5% GST and the Step 2 rate (above 1,350 kWh) was 12.87 cents per kWh plus 5% rate rider and 5% GST?
Solar power is going to really boom big but I would wait a few years. Was reading they are working on new panels that will be able to absorb the same amount of sun as in California as if you lived in a deep freeze in Iceland.
Technology is changing fast. Battery storage is the next big growth sector of solar. Look at the massive solar farms they are building.
Came to the same conclusion in my own less analytical way. Which was basically not wanting to spend at least 10k for little payback. Thanks for doing all the actual thinking and confirming my decision! I will have a generator hookup and will have some conduit running to the roof though. Maybe future efficiency will bring the part count down and DYI installation would be more practical once I am living in my place. I really do want that smug feeling myself, I just can’t justify the price to have it… looking forward to hearing any experiences.