Canada expects solar power to account for 3% of total electricity output by 2040. Solar energy is becoming increasingly popular in the country, and some companies say that the government is about to use it significantly.
Electricity in Canada can be expensive, so a solar panel system can pay for itself quickly. The potential benefits of solar panels include lower energy costs and possible tax breaks.
If you plan to have home solar panels in Canada, learning more about these benefits can help you decide if solar is a good investment.
Still, many Canadians wonder about solar panels’ return on investment (ROI).
It also pays to keep in mind where you’re installing solar in Canada. The average sun fall will determine how quickly you can expect a positive ROI. For example, solar panels in Edmonton will pay off much quicker than in other cities due to their average sunny days per year.
So, how can homeowners calculate a solar panel’s return on investment (ROI) to assess whether the installation is worthwhile?
Average Home solar return on Investment in Canada
When calculating the average solar panel ROI in Canada, there are two things you need to consider:
- Cost per watt installed
- System size
If you have these two statistics (as well as your area’s peak sunshine hours), you can quickly determine whether the ROI of solar panels is worth the initial investment.
Cost per watt installed
The average cost of installing a solar energy system in Canada is around 3 USD per watt or approximately 22,500 USD for a 7.5 kW system. Ontario has the lowest solar panel installation cost per watt, while Nunavut is the most costly, with an average of over 4 USD.
This information is only an average for each province or territory, with solar installers typically charging different rates in different areas. You usually pay more if you want a system larger than 7.5 kW installed, but premium systems will cost more.
You need to know how much energy you consume each year to determine what size home energy system you need. To estimate your monthly electricity consumption, look at your latest bill or use a previous year’s bill to calculate an average.
To be more precise, you can add together all of your monthly electricity bills from the past 12 months. Your average annual Canadian electricity bill for houses with gas heating is between 7,500 and 15,000 kWh, while electric bills for those with electric heating can range from 20,000 to 35,000 kWh.
For more information, contact your utility company. You can also ask your solar installation provider for alternatives, how solar will work for your home, and whether your property is a feasible candidate for solar panels.
What You Can Expect from Your First Consultation and Quotation?
To get started, contact the contractor’s website and find contact information. They will be able to provide you with a free consultation to discuss your solar needs and see if they can install your system for you.
Knowing the average amount of peak solar hours in your area is essential, but you’ll need to figure out how many hours of sunlight your new system will need to operate to meet your needs.
In Canada, the peak solar hours range from 950 hours in the Yukon Territory to 1,330 hours in Saskatchewan, so getting this information for your specific location is essential.
The company will tell you how much money you could save by installing a solar system, and if that number needs to be higher for you, they will mention other factors to consider when deciding.
For instance, a property’s solar exposure can change over time, depending on nearby trees or infrastructure growth. Your contractor will be able to anticipate these occurrences and adapt your estimate accordingly.
How Much Does Solar Panel Installation Cost in Canada?
Over the past decade, the cost of installing solar panels has plummeted, making them a more affordable option for those looking to reduce their carbon footprint and those concerned about their energy bill.
The cost of installing a solar power system will depend on the energy demands of the specific building. For example, a household’s power range may be 4 kW to 10 kW, so a solar panel system that produces 4 to 9.6 kW would cost between 12,000 USD and 25,000 USD.
The NEB conducted a study investigating the economics of residential solar power in different parts of the country. Based on a home’s location and whether or not it has an intelligent meter, the study found that residential solar is an excellent financial choice.
Residential solar break-even points vary significantly across Canada. As a result, some people may break even at a lower price than others.
Canada’s east and west coasts have higher break-even prices due to overcast weather, while the nation’s heart has lower prices because it is less foggy and receives more sunlight.
Sales tax differences throughout the country, which are applied to the cost of installing home solar, are also significant.
Solar installations might become even less expensive in Newfoundland, Labrador, New Brunswick, Alberta, and British Columbia. But utility-based power will remain the more economical choice in places with low electricity prices, like Manitoba and Quebec.
In most Canadian provinces, power rates have been going up faster than the rate of inflation, which means that solar power will become even more affordable in the future.
ROI is a critical factor in determining whether an investment is good, and in the case of solar panels, their current ROI makes them a medium- to long-term investment.
But because new technologies and designs are being made all the time, solar panels can quickly pay for themselves, even if they’re only used for a short time.