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?