Posts Tagged ‘Solar Power’

How Solar Electricity Works

Tuesday, March 29th, 2011

Before I start this new blog, I’d like to review some important vocabulary.

Solar Electricity = Solar PV or just plain PV (PV means PhotoVoltaic)
MicroFIT = micro Feed Into Tarrif program designed by the Ontario Power Authority (10Kw or less) – typical for homes
FIT = Feed Into Tariff Program, like MicroFit but for over 10kW – typical for commercial and industrial applications
kW = Kilowatt
kW/h = Kilowatt per hour, as you see on a standard hydro bill
1 Kw = 1000 watts

For some time now I’ve been trying to understand why some people haven’t even acknowledged the existence of solar electricity, or how it works.  If I happen to start a conversation about solar (which I often do), I usually hear the same old “oh forget that, it’s way too expensive…”.  I then proceed to tell people that solar systems, as well as the microFIT and FIT programs, are designed to accommodate 95% of homeowners and their unique budgets (providing your roof has the solar potential of course!).  It’s usually at this point that I offer to sit down and buy a few cups of coffee.  

Almost all system designs have a return on investment of 9 to 12 years.  This number depends on your system’s power generation as well as other factors, but we’ll come back to this later.   Systems are now available starting at 750 watts (represents an average of over 8 light bulbs), and with a MicroFit contract that represents 80.2 cents per kW (or, if you exceed 10kW, 71.3 cents per kW) for a contract that’s good for 20 years.  Minimal upkeep is required and most importantly, your system can be upsized after that 20 years, or even better a contract renewal at same or better rates may be in the making with the government.   Let’s remember one thing here – our government program comes from the German system.  They were the first to successfully achieve this microFIT program.  Their initial contract term was for ten years, and area residents were in a fright wondering what was going to happen at the end of their contract term.  Recently, the German government decided to renew contracts from those customers who were interested in doing so.  Our prediction is that our government will do the same in order to benefit programs in place to manage the possible energy shortage in years to come.

So back to simple math.  A system that generates .75 Kw/h (750 watts per hour) would cost approx. $8,000.00 to install.  This system has a return on investment (via the MicroFIT program) of approx. 12 to 13 years.  The remaining 7 to 8 years on the contract is money in your pocket.  Here are a few examples:

Size Installation Cost Return on Investment
2 kW/h $14,500 9-11 years
3 kW/h $23,000 10 years

Now, let’s be realistic here.  The average family moves every 3 to 5 years, which can dampen the quality of this investment.  However,  predictions from many colleagues tell us that for every $1,000 in reduced operating annual utility costs, your resale value increases by about $20,000.  I personally find those amounts hard to believe here in Ontario during this economy, but my point is quite simple – your investments aren’t going to waste.  In addition, contracts with the Ontario Power Authority are transferrable, so the contract you have for your home can be transferred to the buyer of your home when the time comes.

I always like to save the best part for last: we now offer financing on solar PV systems!  You’ll have to contact us for specifics , but think of the possibilities! An investment in your home that is guaranteed to keep a positive flow in your cheque book until it’s paid off!  And beyond the pay off of the system, there is a guaranteed income being generated for your home.

There are many factors to consider:  your roof’s pitch and how far off true south you really are are just to name a few.  This however, is our next blog’s topic. Meanwhile – give us a call!! We’d be happy to come out and talk to you about your home’s solar potential!

Thanks for reading!