Homeowner Costs for Solar Power Analysed

Rooftop Solar Costs Analysed

I am delivering on my promise to write an article with the real costs and benefits of rooftop solar for homeowners. This is based on costs and solar production to be expected in the Greater Toronto Area.

As everyone interested in renewable energy knows, there are no incentives available to help defray the costs so what this article is about is whether a reasonable person can justify the investment based on the costs. I am not considering other reasons such as environmental benefit in this article.

Crystal ball gazing is necessarily involved as several assumptions must be made. I welcome comments on the assumptions I have made and would be happy to send anyone my simple spreadsheet so you can change the inputs and see how it affects the result.


1. The roof is sloped 20-40 degrees and faces South (between SE and SW).

2. The roof surface is asphalt shingles or steel with a remaining lifetime of 25 years.

3. There are no trees, buildings, or other objects that cast shade on the array between 9 AM and 4PM.

4. Maintenance cost including insurance is 2% of the original cost for each of the 25 years lifespan.

5. Cost of money is 3% of the original cost for each of the 25 years lifespan.

6. Cost of electricity that would have been paid to your LDC is $0.10 per kWh in year 1 and  increases by 5% every year for 25 years. The median cost with this assumption is $0.17 per kWh and is used in this example.

7. Cost for a turnkey installation is $2.00 per Watt plus HST of 13%.

Results(25 YRS):

5 kW System

Electricity produced (25 Years): 15,0000 kWh

Initial Cost $10,000.00

HST $  1,300.00

Interest $7,500.00

Maintenance $5,000.00

Avoided cost of Hydro from your LDC $25,500.00

Total cost of ownership (25 Years) $23,800.00

NET SAVINGS (25 YRS) : $1,700.00

7 kW System

Electricity Produced (25 years): 21,0000 kWh

Initial Cost $14,000.00

HST $  1,820.00

Interest $10,500.00

Maintenance $7,000.00

Avoided cost of Hydro from your LDC $35,700.00

Total Cost of ownership (25 years) $33,320.00

NET SAVINGS (25 YRS) : $2,380.00

10 kW System

Electricity produced (25 Years): 30,0000 kWh

Initial Cost $20,000.00

HST $  2,600.00

Interest $15,000.00

Maintenance $10,000.00

Avoided cost of Hydro from your LDC $51,000.00

Total Cost of Ownership (25 years)$47,600.00

NET SAVINGS (25 YRS) : $3,400.00


After taking into account the real costs of ownership, even perhaps over-estimating the cost of insurance and maintenance, its clear that rooftop home solar without benefit of government incentives is at least a break-even proposition for optimum sites.


Battery Back Up

You should look at other options for back up power

In a previous post I promised to write about Battery Back Up.  I will do so now. In future monthly postings, I will choose topics and do some research to bring in interesting ideas. In these initial posting  I am using my mental database as my only resource as I am trying to “prime” the blog.

Other Options

You should look at other ways to obtain emergency power. Many homeowners choose gas generators  as the right size gas generator can run the entire house. Running your whole house as usual on batteries is an enormous task because batteries drain quickly when large loads are connected to them. When we design a system, we must ask numerous questions of the homeowner.  We must find out what are the essential loads to be backed up. Our electrician must install a pony panel and to run the necessary wires so that when the grid goes down, power from the storage battery flows only to the selected loads.

Select Loads to be backed up

Typically, homeowners choose furnace motor, fridge, some lights, an outlet for plugging in a computer and any essential medical appliances.

How Many Hours must battery last?

Decide how many hours the selected loads must be powered. With that information and loads, we can estimate how many kWh of storage to provide.

Sun  shining on the panels will add to autonomy once the batteries are charged but in our climate most outages occur during the winter when sun hours are few or panels covered with snow and ice.

None of this is cheap – adding a pony panel and batteries can double the cost of a net metered system.


Net Metered Solar Connection

The term “net metered” refers to the way your solar power system is connected to the electrical grid.
Cables from the solar array are connected to the electrical service panel in your home. That way, the solar electricity is first offered to the home and if the home doesn’t need the power it flows through the bi-directional meter to the electrical grid.
Bi-directional electrical meters measure flows of electricity to and from the grid and your Hydro company reconciles these flows monthly. Credits are carried forward for 12 months when they are reset to zero. You pay monthly bill based on your usage minus credits for electricity generated by your solar array. Obviously, it doesn’t pay to produce more than you use over a 12 month period as the excess is gifted to your utility.
Because the “smart” meter is replaced by a bi-directional meter in Ontario, your billing is based on tiered rates instead of time of use rates. One great advantage is that you no longer need to worry about “peak” rates-running a  dishwasher or washing machine at noon on a workday costs no more that week-ends or nighttime. And because the electricity you generate will reduce your overall consumption, most of your billings will be at tier 1 rates which are lower than tier 2. Ideally, the only charges would be minimums to remain connected to the grid.

Energy Storage

Energy Storage is a hot topic nowadays. In Europe and some USA States, where homeowners are charged time-of-use rates, it makes sense to invest in a battery to store solar electricity for  use at times when the rate charged per kilowatt hour is highest.

In Ontario, once the grid connection is changed to net-metered, the smart meter is removed and the customer is charged a flat rate so the rate charged  is no longer affected by time of use.

Ontario customers at this point in time do not need a battery for energy storage as a net-metered connection allows consumers to use the grid as their battery.

Back-Up power is an entirely different issue. I will discuss battery back-up in my next post.

My new solar blog

I plan to provide useful information for those people who are considering installing rooftop solar  panels on their homes, cottages, barns, sheds and the like. Of course there is more to a solar power system than just solar panels. A proper system balances the power coming from the panels with the capabilities of the power  inverter which has to be appropriate for the job.

Other considerations are the appearance-many plans are aborted because one of the partners dislikes the look of solar panels.
Shading by trees and buildings reduce power production but correct choice of equipment can minimize losses.

Interest in power storage in batteries is growing due to press frenzy about the Tesla Powerwall. There are articles almost every day on advancements made or anticipated.
Same goes for solar panel technology where incremental improvements are being made to silicone based modules, while promising new technologies like perovskite are catching up rapidly.

Then we have new technologies which are interesting but often not yet commercially available. And prices keep falling.

So..there is no end to the list of possible topics.