TechnologySolar panels: are they worth the investment in Canada?

Mary ChapmanDecember 5, 20198 min

Depending upon where in Canada you live, electricity can cost you big bucks each year. But the high initial cost of solar panel installation makes many Canadians wonder if it is worth the investment.

In this article, we look at each province and territory to examine if solar panels make sense in your area.

Cost for panels

Contact any solar panel company and they will tell you the cost per watt. The average price of solar power in Canada is $3.07/Watt. But that’s not the whole cost. You also have to consider the amount of sunlight your area gets, whether or not your province offers solar incentives, and the size of the equipment you would need.

How much energy you use vs how much solar energy you can harness

Start by calculating how much energy you use over one year in units of kWh. All you do is look at your hydro bills for the past year (you can usually access these online), and add up your monthly kWh usage for 12 consecutive months. Your number will likely fall somewhere between 7,500 and 15,000kWh. Next, you will need to figure out how much energy solar panels can produce in your area. Energy output is totally dependent on how many hours of full sunlight your province gets.

Here is the annual average of full sunlight hours per province:

  • Alberta —1,276 hours
  • British Columbia — 1,004 hours
  • Manitoba — 1,272 hours
  • New Brunswick— 1,142 hours
  • Newfoundland and Labrador— 949 hours
  • Northwest Territories— 1,064 hours
  • Nova Scotia —1,090 hours
  • Nunavut —1,092 hours
  • Ontario —1,166 hours
  • Prince Edward Island —1,104 hours
  • Quebec —1,183 hours
  • Saskatchewan— 1,330 hours
  • Yukon —965 hours

Once you know how much energy you can reasonably expect to harness over a year, you can calculate the size of solar panel equipment you would need. To do this, simply divide your yearly energy use (in kWh) by your annual average of full sunlight hours (in hours). Let’s say that your home uses 15,000 kWh over a year and that you live in Quebec where you get 1,183 hours of sunlight a year. The calculation would be 15,000/ 1183 = 12.67KW.

You can then multiply this number by the cost per watt quoted by solar companies to get your final price. Let’s assume that a solar system will cost $2.28 per Watt. $2.28/Watt* 12670 Watts = $28,887. It would cost you just under $29,000 to install solar panels on your home (not including any incentives your province might offer).

Are solar panels worth it?

In order to assess whether installing solar panels is worth the upfront cost of installation, you need to look at how long it will take to pay off the system.

If you can pay off the system with your energy savings in around ten years, then it’s worth getting on board. Remember, solar panels last about 30 years and have almost no maintenance except for clearing off the snow. If your panels are angled at 35 degrees, they will clear themselves of snow without you having to do anything. If you do need to clear snow, attach a squeegee to a mop pole and carefully wipe the snow away.

The National Energy Board recently completed a study on the financial viability of typical solar power projects in over 20, 000 Canadian communities across every province and territory. The study estimated the amount and cost of electricity produced by solar panels and I compared the costs to local electricity prices.

Findings show that installing solar panels only makes financial sense in areas where electricity rates are high. This means, that the break-even prices for solar panels are less than electricity prices in Saskatchewan (where electricity costs are among the highest in Canada), Prince Edward Island and most places in Ontario.

In these areas, most homeowners would save money by installing solar. Rebates in Nova Scotia bring down the installation cost of solar panels, making it a smart move in that province. In Alberta, people with solar panels could save money if they used smart meters and took advantage of rebates.

Have you already made the switch to solar? We’d love to hear your thoughts. Drop us a line below.

Mary Chapman profile picture

Mary Chapman

Graduated from the University of Toronto with an Honors BA English Specialization and has completed several publishing courses at Ryerson University. She is a proofreader, editor, and content writer based in London, Ontario.

13 comments

  • Mike

    December 10, 2019 at 3:01 pm

    I think the advantage of installing solar can’t be accurately reported on due to constantly changing local variables. Take Edmonton for example. Last year, combined provincial and city rebates for solar installation were a full 40% ! The solar market went nuts. In addition, a major energy retailer began to purchase solar power exports at ~4X the average kWh rate. The incentives were incredible. Fast forward to today: the new conservative government killed all solar rebates, although the high purchase rates still exist. Very different today, but great if you got solar installed lat year.

    Reply

    • FCT

      December 10, 2019 at 3:24 pm

      Hi Mike,
      Thanks for the feedback. I guess timing is everything!

      Reply

  • Bob Dhaliwal

    October 9, 2020 at 12:00 am

    I just installed my system this year in Vancouver. It will take a few years before i know if I’m saving any money. They do add to the curb appeal of the house. Not too many people have them.

    Reply

  • Michael Armenia

    November 12, 2020 at 9:01 pm

    Mary C: You did homework to make an understandable article on rooftop solar. The full sun numbers are important. In Canada they are about 3 hours (equivalent) a day solar energy meaning the other 21 we get nothing. ——Mike’s comment on Dec 10 points out the wild swings in incentives. All rate payers pay for the incentives so that drives up everyone’s bills. —– An important issue now is longevity and waste. The panels degrade to much less power output in 10 years and need to be discarded certainly by 20. We used to ship our solar waste back to where it was manufactured: China , but that has stopped due to the pollution caused by burying contaminants in the ground. ——Recycling is not economical because of the energy it takes to melt or reprocess the elements. When you add that to the energy it took to make the panels you see not “green” at all. So where do we get the green energy to build (or recycle) solar or wind “renewables” ? There is a bright engineer named Paul Acchione in Ontario. I recommend his talk #111 on the Zero Waste Countdown podcast on Spotify.
    Mike A. in Rhode Island where the full sun hours are just a bit more than Canada.

    Reply

  • Dan Hunter

    December 19, 2020 at 10:32 pm

    Hey Mike, Thanks for sharing. That seems so irresponsible because it’s not sustainable. We don’t need more gold rushes, we need long term sustainable policy, with stable, realistic rebates, nationwide.
    Dan @ApolloTech Solar

    Reply

  • Ron Graner

    March 26, 2021 at 5:23 pm

    I was one of the early adopters, receiving 80.2 cents per KW. beginning in 2008. The contract expires after 20 years. I installed my panels before The conservatives first lowered the fees, then cancelled the program to new subscribers. On average the panels produce $4,500. per year. The installation costs were $35,000, but I received $5,000 HST rebate. I send the HST earned every month back to the government. At this point my initial investment has been paid and now the total income generated is taxable.
    If you accept Premiere Ford’s argument that paying a premium for solar-panel, and wind generated electricity doesn’t make sense. -That is, if you only take into account the cost of paying more for solar, then he is right, but if you calculate the cost of erecting towers and stringing wires from Hydro and nuclear generators to where I live, does Mr. Ford’s argument hold water?
    It is well known that the electric grid is at capacity. My panels deliver power directly into Toronto, where it can be used by myself and others.
    What is the overall cost of upgrading the grid and refurbishing nuclear power plants, as opposed to paying for alternative green power production. Solar panels today are both cheaper and more efficient than when I installed mine. Can you comment?

    Reply

  • larry dahl

    April 7, 2021 at 9:42 am

    Installing solar panels and remaining of the grid works well in Canada, it is also the greenest way to go. The power grid with all the SF6 gas in all switching and transformer is dirtier and contributes to green house gasses more than all the cars planes. SF6 is 25,000 time more greenhouse than CO2.

    However making your own energy on site you can make as much as you use without wasting. I have lived off grid since 2005. I can make more than I need, to run a fully modern home, plus run a small farm. Installed correctly solar is very viable, in most areas of Canada, including here in Alberrta.

    Reply

  • Derek Ruddock

    April 25, 2021 at 12:20 pm

    What are some of the additional costs with installation ie the storage systems, inverters etc. Dont you still have to pay the electric utilities companys all the transmission and distribution charges?

    Reply

  • Brad Abernethy

    May 19, 2021 at 7:26 am

    My 11 kw solar array was installed last year north of Toronto. I got NO rebates and paid for the 34 panels from my own pocket. It is net metered and has brought our hydro charge down by 80%. Fact is I did not care if I ever got a return in my investment..I wanted to make green energy for the future. The value added increase in my home has more than paid back my investment though, and less cost for hydro is just another benefit.

    Reply

    • Peter

      August 17, 2021 at 5:23 pm

      Peter from wilsonville I just put a 10 kwsystem on I like your idea also I start heating with system and if power left plug in hybrid suv

      Reply

  • johannes mulder

    June 4, 2021 at 1:31 pm

    We had nine solar panels installed last September with a Tesla Battery as a backup, our community suffers from many power outages, 17 events so far , short but very inconvenient. I love what the solar panels have produced so far! Is there a payback? I could care less, but I know my power bill is less and it has given me the satisfaction that on occasion I,m using zero grid power … and even feeding some back to BC Hydro…I,m considering adding more panels.

    Reply

  • Don

    June 13, 2021 at 7:38 am

    Interesting article, thanks for writing,

    I have dabbled in solar for 29 yrs, and currently have a small thermal hydronic system (max 240k btu per day). I installed it because it is interesting, and doesn’t have the downsides of the pollution involved in producing and delivering the electric panels. I admit I’m not a huge believer in the ongoing climate crisis cult, but I just enjoy solar energy.

    We had a fairly large install done at my office back during the NDP days, and I have done the analysis on how it has worked out. Due to transmission and other fees, it would never make sense, even with the government subsidies, to try to produce power to sell back to the grid. The smaller systems really only make sense with the grid tie if you produce less power then you consume. The government required there be no storage batteries in the system to qualify for the grants, so our system only works if our office has power. This makes it so the solar cannot act as a backup power source. Yes, it has the politically correct, green look, wow we have panels on the roof, and I think it’s cool from a hobby perspective, but it will never pay out. Do I love solar? Yes. Do I think it is an environmentally and fiscally responsible way to produce power? Not really. If we’re concerned about the environment we need to simply consume less.

    Reply

  • Brian K

    July 2, 2021 at 7:43 am

    I have looked at solar power a few times – for my house, a neighbours’ cottage in a different province, and a small business. The quotes always show lots of savings but when I do my own calculations, there aren’t any. They all seem to leave out what the initial investment would return if invested, the depreciation/degradation of the PV system and loss of generation, and it’s replacement cost at its end of life. Also because of the billing systems, there are fixed fees that need to be paid regardless of Kwhr consumption – like franchise fees, and fixed transmission and distribution costs (which can be hidden) so regardless of generation, you will always have a bill just to be connected and maintain quality of life. At the end of say ~20 years, some, most or all of the system will have to be replaced due to deterioration of the PV cells, new technology (ever try to repair electronics after 5 years – sorry parts not available!) – and different electrical codes that will require new installation methods which would be required when the system is touched and of course what happens if my roof needs to be replaced (average life – 20 years) and then of course there is hail. At the end of 20 years, the initial money, if invested would still be churning out cash, but a new investment and cash outlay in PV cells/system would be required. As a result, my calcs show that basically the costs are moved to a different location – from the Utility to PV cell suppliers and installers. Also as others have pointed out, there is the pollution from the manufacture and disposal of the PV cells never mind the hidden environmental cost of mining all the things required to make the PV cells, electronics and rack system. I would love to install a PV system, but it has to make financial sense (and cents!) and right now I can’t find the savings other than the ‘feel good’ tingle you get when you see your roof.
    Conservation makes more sense – LED bulbs cut power consumption by 80%, programmable thermostats cut heating/cooling costs, more insulation in the attic, and tell the kids to shut the lights off and not fall asleep in the shower!

    Reply

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