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Honestly, we can’t tell you the cost of a PV solar system until we’ve completed an audit.
Just as the cost of all houses, cars, or cell phone plans are not the same, neither is the cost of all PV solar systems. “How much is it going to cost?” is not only the most common question we get, but typically the very first one people ask. That’s why we believe it’s important to educate people about the costs of photovoltaic solar systems. If you’re looking at a residential install and want a ballpark figure let me ask you this, is “somewhere between $5,000.00 and $40,000.00” helpful? Maybe for some of you it is. What we know to be true is that ballpark figures can be a deterrent for people who don’t have a solid understanding of how PV solar works. Some will only hear the highest figure and say, “What? No way!” when in reality their usage may only require a small system to cover all their needs. It also excludes the option of putting up a partial system. The end result is a customer who has walked away with a negative, inaccurate impression and is more than happy to tell their friends how solar is unreasonably expensive.
We want to fix that, so let’s start by looking at the big picture. Here are a few frequently asked questions about the cost of solar:
The Cost Of Solar Explained
How does solar impact the price I pay for electricity?
Electricity bills consist of two main parts, an Energy Charge based on your kWh consumption for the period, followed by Transmission & Distribution (T & D) charges for the same period. There’s also Access Fees, Administration Charges, etc.
The Alberta Utilities Commission (AUC) has recently approved a 23% increase in T & D charges for Southern Alberta starting in April of 2015. The Alberta Electric System Operator or AESO also confirms that these prices will continue to increase over the coming years:
Alberta can’t expand its transmission lines across the province and build new natural gas plants to replace old coal-fired ones without added costs, those costs will be passed on to all electrical consumers in the province through increased Transmission & Distribution (T & D) rates.
It’s important for Lethbridge residents to know two things about these T & D rates. The first is that they currently account for approximately 37% of your electricity bill. The second is that retailers typically only show you a total for Transmission and a total for Distribution when in fact they each consist of two rates: One portion is a flat per day rate charge, and the other portion is a rate that is based on your daily consumption ($ per kWh). See chart below. An energy producing solar system will reduce this portion (a) of your T & D.
Transmission Access Rate
a) System Usage Charge 0.0252 $ per kWh
b) Service and Facilities Charge 0.2614 $ per day
Distribution Access Rate
a) System Usage Charge 0. 0105 $ per kWh
b) Service and Facilities Charge 0.6273 $ per day
So what’s it all mean? If you decide on a net zero grid tied solar system, the annual Energy Charge portion of your electricity bill should work out to $0. If the cost of electricity ($/kWh) goes up over the next 25-30 years (which it has historically) the impact on you will be minimal. You will still have to pay the per day flat rate portion of T & D, Access Fees and Administration Charges, but you’ll experience further savings as your daily T & D consumption costs ($ per kWh) will be lower. During daylight hours your T & D consumption is down because your system is producing the power. In addition, when your system is producing more power than you need that power gets sold to the grid and credited to you at whatever your current retailer rate is. Hence, the more Transmission, Distribution and the cost of electricity increase, the more you save if you’ve installed a solar array.
Your modules are also guaranteed to be producing at 85% efficiency on year 25 and have the potential to keep producing for another 10-15 years. In this big picture perspective, the savings are huge!
What factors affect the cost of a solar system?
System Size and Module Type
Are you interested in simply offsetting your electricity bill, or constrained by what you can afford right now? Did you want to try and attain net zero? If you have limited roof space do you want to use 300W modules instead of the typical 260W? The size of a system and type of modules used have a major impact on the final price. Knowing what you can afford if you choose to buy a system is very important. Consumers can install any size of system they want up to a maximum net zero capacity. The nice thing about deciding to go solar is that you don’t have to start by ‘jumping in the deep end’ so to speak. Consumers have lots of options when it comes to selecting the size of a system. Your goal might be to reach net zero at some point but it doesn’t have to be right away. We can install a partial system for you that’s easy to add on to at any time. In regards to modules, the higher the watt, the higher the cost. We only recommend a module higher than 260W if you really want to reach net zero but are constrained by available roof space.
The slope of your roof can have an impact on costs as well. Think of it in terms of walk-ability. A 4/12 pitch is easy for installers to maneuver on, a 12/12 pitch means installers are constantly relying on their harness and therefore have to work at a slower pace. What it means for you may be a few extra hours in labour costs, or equipment rental to get the job done quicker.
Bungalow vs. Two-Stories or More
A typical PV module weighs about 43lbs. When buildings are higher than a single story bungalow you need to consider how installers will get materials to where they need it. Will it require a simple material lift or a zoom boom?
Although asphalt and metal are the easiest, most common installs, there may be additional costs when installing on tile, cedar shakes, gravel or torch-down roofs. A ballasted system is usually used on gravel and torch-down roofs where there is little to no pitch. This type of install uses weight to hold the modules down rather than screws which penetrate the roof surface.
Are you near Lethbridge or will installers have to drive more than an hour to get to you? As with most trades there may be fees for the added mileage and/or travel time.
New Electrical Panel or Trenching
Residential homes require between 2-4 available panel breakers depending on the system size. If your panel is full you may need to consider a panel change, the addition of a sub panel, or a simple rearranging of circuits to make it work. On occasion it may also make sense to use a garage or other remote building for your solar install and therefore wires may need to be trenched in to allow access to an available panel.
These factors are used to determine the cost per watt of an installed solar system. Residential and commercial installs typically cost $2.50 – $3.50 per watt.
Available Funding and Incentives
Do commercial PV solar projects get accelerated capital cost allowances?
When commercial, industrial or institutional businesses purchase or lease a system they can qualify for accelerated capital cost allowances of 30-50%.
“CCA classes 43.1 and 43.2 of the regulations (the Regulations) under the Income Tax Act (the Act) provide enhanced CCA rates for various renewable asset properties. Certain assets of a qualifying… photovoltaic system that are included in class 43.1 will be entitled to an accelerated CCA rate of 30% per year. Such assets that are acquired after February 22, 2005 and before 2020 and that would otherwise be included in Class 43.1 are included in class 43.2, which has a CCA rate of 50%”
Are solar modules expensive?
With continued advances in technology, the cost to produce solar modules continues to decline. Research by the International Energy Agency indicates that prices for solar modules dropped over 90% from 2000 to 2013. These lower prices are opening the door for more people to invest in solar energy.
How do the costs of grid-tied vs off-grid compare?
A lot of people inquire about the possibility of going off grid. Although the idea may sound appealing, the reality can be a different story. Installing a grid tied PV solar system is the most common and cheapest way to go solar if you live in an area with access to the grid. It also allows you to get paid for the excess power you pump out to the grid.
Off grid systems can be substantially more expensive if they require a battery bank big enough to run major appliances and A/C units. The higher your expected power usage, the more batteries an off grid system will need and the more money it will cost. You will also have the added costs of replacing the batteries every 5-10 years.
However, if you have a remote weekend cabin that occasionally requires a few plugs and/or lights, off grid becomes more feasible and affordable.
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