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Solar power solutions in GTA

Discussion in 'Canada' started by Not1Drop, Apr 21, 2017.

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  1. Not1Drop

    Not1Drop Member

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    Has anyone on here in the GTA completed going down the path of TESLA's Solar Panel and Powerwall solution? Or what about companies like EnergyGeeks.ca where they advertise doing the specs for the job and arranging with an installer in your area that they recommend? If you've done the project of putting 3 or more kw of panels up what has your experience been so far in dealing with the utility for either pay back or net metering? If there is a better forum to place this in with info that applies to Southern Ontario and the GTA many thanks if you can point me in a direction to finding more info.
     
  2. brucet999

    brucet999 Active Member

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    For the benefit of us ignorants south of the border, what is GTA?
     
  3. sakimano

    sakimano Member

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    The math doesn't make sense

    1. The government doesn't pay enough for the power
    2. The equipment is too expensive
    3. The time (7-8 years) it takes to 'pay for itself' is a pie in the sky...reality is the people who talk about that are forgetting the alternative...investing the money. When you compare the two options solar only makes sense around 35-40 years...right around the time you need to replace the hardware.

    If it's an environmental or altruistic reason, that's a different story. But the money argument is weak.
     
  4. sakimano

    sakimano Member

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    Greater Toronto Area
     
  5. Not1Drop

    Not1Drop Member

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    Thanks for the replies sakimano. Sorry brucet999, had posted Toronto as GTA as I figured it would be mainly folks from up here checking the thread. i've done a fair amount of research on solar in general but was wanting to start digging more specifically with people's experience here in my area.
    Like most people north and south of the border, hydro rates are too high and although Ontario is artificially lowering them soon, its just a political move that will cost everyone more in the coming years anyhow. I live in a "rural" area and with my heat being geo-thermal for the winter, or running a pool in the summer we average close to 3000kw per month or 100kw per day. As sakimano points out it's about the math though. While i'm not looking to have free energy in 7 or 8 years i am looking for where i'd need to be for it to magically cost less per month overall and where that point in time would occur.....or just keep paying.....
     
  6. TomatoOne

    TomatoOne Member

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    PowerStream recently ran a solar pilot program in York Region. We applied, but sadly our roof did not match their shape and orientation criterias.
     
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  7. sakimano

    sakimano Member

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    I made a spreadsheet on this with the math and a number of variables plugged in (cost, power revenue, residual home resale gain, alternative investment yield, tax rate etc) and I'd be happy to send it to you. You can tweak it for your situation.
     
  8. LazMan

    LazMan Member

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    We looked at it for our house but in Ontario it didn't work for us.

    We already have 21 solar panels through the micro FIT program. I think we are on the second iteration of this program and we get paid 54.9 cents/kWh which means that selling the electricity back to the grid is is much better than keeping it.
     
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  9. wayner

    wayner Active Member

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    For the last several years Ontario has had something called microFIT for homeowners - the FIT stands for Feed In Tariff. The basic gist is that the government guarantees you a price for 20 years for the green energy that you produce from solar or wind. I installed solar panels in 2015 and I get $0.384/kWh. The most that you currently pay for electricity in Toronto is roughly $0.23/kWh (the peak rate is $0.18/kWh but there are about $0.05/kWh of other fees). So it makes no sense for you to use the electricity you produce when you can sell it back into the grid at a much higher price.

    But there are some conditions with the microFIT program. The first one is that the maximum that you can have is 10kW worth of panels. That is fine for most people as you have to have a very large house to fit more than that in ideal positions (ie south facing). You also have to have a separate meter installed for generation and you cannot have a battery storage system.

    The microFIT program has changed and is phasing out - I believe 2018 is the last year. I believe the price paid for 2017 installations is $0.288/kWh.

    I paid about $30k for my solar panels and \I should generate about $5000/yr in income. My return is roughly 13% pre-tax. You can depreciate the panels at 50% per year so that will help to reduce the tax burden but you can't use depreciation to create a loss to offset against other income that you may earn. After about 6 years or so my panels will be generating taxable income and therefore I will be taxed on the income. And the current marginal tax rate for high income earners in Ontario is 53.53%.

    There aren't any great places for finding out more info, but this thread on redflagdeals has some good info but it is really long and the info can become obsolete after a while. http://forums.redflagdeals.com/ont-only-microfit-solar-panel-program-10-14-return-20-yrs-fat-lady-has-sung-1334001/

    Net metering may make more sense in the future if the price of panels continues to fall, but there are conditions on that as well.

    Don't forget that the electricity sector in Ontario has seen consistent government meddling for well over 100 years and common sense and market economics often do no apply when it comes to electricity in Ontario - and that has been the case with no matter which party was in power. Like the current system where we (the taxpayer) is subsidizing we (the electricity customer) to bring down electrical bills.
     
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  10. SageBrush

    SageBrush Active Member

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    Is that a virtual accounting, or just the power excess not being used by the home ? I ask out of curiosity and since it affects OP. His very high consumption would in all likelihood take up all a 10 kW array would produce and more.
     
  11. wayner

    wayner Active Member

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    With a microFIT connection your consumption is, at least financially, completely divorced from your production as you have two meters and you have two accounts with your Local Distribution Company. You even get two separate "bills" although your production "bill" always has a credit amount and you receive a monthly cheque for your production - but you still pay for all of your consumption.

    Physically I am not sure if there are two lines that go back to the distribution grid on the street or whether your production and consumption are merged together on the line that goes from your house to the street.

    My consumption is also way higher than my production, especially since I got a Tesla. In 2016 my production was 12.9MWh and my consumption was 53.1MWh. I have a large house with two Air Conditioners, a swimming pool that runs about 6 months of the year and a spa that runs year round.
     
  12. wayner

    wayner Active Member

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    Certainly the math did work a few years ago - as I said my IRR was around 13% pre-tax.

    Here is another way to look at it - from the net metering perspective. Let's say you can offset what you pay today with your solar panels. When you are doing net metering you have to go on tiered pricing rather than TOU pricing. That means that you pay $0.121/kWh (assuming that you still use at least 1000kWh per month with the panels) for electricity. Add on the $0.05/kWh of other fees and HST and your all-in cost for power is $0.1955/kWh. Using my 2016 example I was able to generate 13MWh or electricity. That saves you $2541/year. You should be able to buy a 10kW system for around $30k, maybe a little less. Using $30k as the purchase price and assuming that you save $2541 for 20 years gives you a simple break even of 12 years and an IRR of 5.3%. Not great, but not horrible when you consider that is an after-tax return and is probably around what you would earn on an after-tax basis from a portfolio of 60% equity and 40% fixed income.

    I haven't accounted for any decay in the panels but that should be fairly minor and perhaps offset by increases in electricity prices over the next 20 years. Assuming a 1% per year degradation in solar panels and a 2% per year increase in electricity costs gets you up to an IRR of 6.2%.

    If your calculations show a different result then please post them and we can discuss.
     
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  13. SageBrush

    SageBrush Active Member

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    Is this presumed 5.3% after tax return from an investment portfolio corrected for inflation ?

    If I am following along correctly, your annual savings are tied to the utility cost per kWh and that is most certainly going to rise with inflation.
     
  14. wayner

    wayner Active Member

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    The 5.3% return is strictly the Internal Rate of Return in Excel. The cashflows are -30,000 in year 1 and then 2541 for the next 19 years - so I am actually assuming that the system costs $32,541 using these numbers are you should also collect revenue in year 1.

    When talking about an investment portfolio if you assume that equities return 8% and fixed income 3% and that the tax rate is 50% for fixed income and 20% for equities and a 60-40 equity/ fixed income split then you get an after-tax return of 4.44%. That is all nominal - ie not corrected for inflation.
     
  15. Jaff

    Jaff Active Member

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    You know, the math is equally as weak for buying the cars vs. investing the funds.

    Still, with all EV's, it has to start sometime...same for solar.

    I prefer to think like this...if you can afford to invest in solar, than do so...unless of course you are an anal retentive accountant, or just a greedy selfish person who doesn't care about doing the right thing today, and waits for others to do the right thing for them...same for buying the car vs. buying shares in Tesla.

    More people have to step up and start doing the right thing, cost be damned.
     
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  16. wayner

    wayner Active Member

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    The interesting thing is the "right thing" for those of us in Ontario might be to invest in solar in other provinces. The Ontario grid has a very low carbon intensity so we don't save much CO2 with our solar panels. We might be better off putting up solar panels in Saskatchewan, which has 42% of its electricity coming from coal and 34% from gas. Southern Sask is also the best place in Canada for solar panels as they get the most solar insolation.

    Right now in Ontario only 1.9% of the electricity generation is coming from hydrocarbons and that is from gas. My solar panels are having a good day and I should product about 70kWh - but I'm not saving much CO2 by doing so.
     
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  17. kbeckley

    kbeckley Member

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    I'm with Jaff on this. If you can afford it you should be doing it. I got into the MicroFit at 80.2 cents per KWh but my 2kW system cost an arm and a leg in 2009 easily still a 20 year payback (been through 2 inverters already - both on warranty). As we all know it is the people that can afford it now that will make it affordable in future.

    In addition to already Model S-ing we will be solar shingle-ing and power wall-ing and model X-ing and model 3-ing because we are fortunate to be able to do so.
     
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  18. wayner

    wayner Active Member

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    I get it when it comes to the solar panels and Model S - and I am drinking the Kool Aid in both cases. But I don't get the PowerWall unless it allows you to totally get off the grid. But that isn't the case for me as my consumption is way greater than my 10kW of panels can produce. And you and I are contractually forbidden from using batteries anyhow as part of the microFIT contract. And if I wanted a backup for when the grid is down I would think that a Natural Gas generator makes way more sense as it is going to run a lot longer than even a bunch of PowerWalls.
     
  19. Doug_G

    Doug_G Lead Moderator

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    Or to translate for the other Canadians on the site... GTA = Centre Of Universe.
     
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  20. wayner

    wayner Active Member

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    Unlike Copetown - The Hub of the Universe.
     

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