Are Rooftop Solar Panels a Good Value for Homeowners?

There is little dispute that renewable energy is good for the environment, and that solar energy is the prime source of that energy. But because initial costs are still relatively high, solar panel installations in provinces other than Ontario are not yet common, even though many homeowners see the benefits. Solar installations will pay for themselves over time, but with average savings only between $400 and $500 in many cases, and initial costs in the thousands of dollars, that payoff can be a long time coming.

Growth of the Industry

In Canada, the move to renewable energy is expected to pick up as the cost for installation of those panels continues to come down. Rooftop solar panels are not the niche market they once were, according to Rob Baxter, principal of Vancouver Renewable Energy Co-operative, but they still represent a sizeable investment. He notes, however, that since 2004, when the company was begun, business has grown about 30 percent a year. And British Columbia is not yet a major player in national solar energy circles.

The prairie provinces of Alberta and Saskatchewan are the prime producers of oil and gas and benefit from cheap energy produced by coal, but each has committed to increased solar capture along with a corresponding phase-out of coal. Alberta's target is to produce 50 percent of its needs through renewable sources by 2030, while Saskatchewan adopted a target of 30 percent.

Canada, with about one million homes as of 2016 with rooftop solar panels, like some of those in Oak Bay, lags behind the United States in solar installations, but the current rate of growth is comparable to that in many other parts of the world.

What Are the Benefits of Solar?

Do the advantages outweigh the costs? Do incentives exist to make installation attractive for owners and for sellers? Will buyers pay a premium for homes that have rooftop solar panels?

These are some of the questions that must be answered before making the move to sustainable energy. Not all parts of the country are equally suited for photovoltaic (PV) and solar panel installation costs are not the same throughout the provinces.

Ontario is the acknowledged leader in existing installations, largely due to an aggressive incentive policy over the past decade, according to Patrick Bateman, director of market intelligence and research for the Canadian Solar Industries Association (CanSIA). Those residential panels were responsible for the generation of approximately 2.5 gigawatts of power. Power generation from rooftop solar panels in B.C. was in the range of five megawatts.

Why the differences between provinces? There are at present no federal incentives for residential solar installations in Canada, even though some benefits exist for business embrace of renewable energy.

Ontario recognized the benefits of grid-connected photovoltaic (solar panel) systems early and encouraged homeowners by offering financial incentives and instituting regulatory programs to lower the rates. Currently, it is a grid parity province, meaning that solar power is cheaper than normal residential utility rates.

In addition, although some previous incentives expired at the end of 2017, Ontario homeowners still may take advantage of a financially attractive Feed-In Tariff (FIT) Program, as well as net metering that allows extra power beyond what is needed to be returned to the utility company for credit. British Columbia and other provinces are considering similar incentives for residential installations.

The Value Proposition

While solar panel installation costs are recoverable over time, and the price of initial installation continues to come down, long-term energy savings may not constitute the prime reason for considering a move to solar.

There is evidence, from the United States, that buyers will pay a premium for homes with rooftop solar panels. According to data from research conducted by the U.S. Department of Energy, the premium is approximately $4 per watt of solar power. While that doesn't sound like much, it translates to an additional $15,000 in sales price on a home with an average solar system capable of generating 3.6 kilowatts.

Realtors also report that buyers, particularly Millennials and first-time home buyers, are attracted to homes with solar panels and smart home features, making both positive investments for homeowners.

Finally, residential solar is another way to contribute to the health of local communities by attracting financial investment and creating clean jobs, according to industry spokesmen, dovetailing on government commitments to foster a shift to renewable resources to supply future energy needs.