How much money will Solar really save me?

As residential electricity rates rise, solar PV systems are getting a lot more interest. However, there is still a lot of skepticism, especially on the potential savings from solar power. A key question homeowners would like answered is “how much money will solar really save me?” In this blog we’ll review the savings associated with residential solar as well as some strategies to help optimize the value of your investment.

Adding solar to your home is a significant investment. Average installation costs across Canada range from $2.34 to $4.00+ per Watt of installed capacity, meaning that a 5 kW (5,000 Watt) could cost anywhere from $11,700 to $20,000+, depending on where you live.

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In Canada, the Greener Homes Grant is a great way to save some of the initial investment required. The grant offers $1,000 for every Kilo Watt (1000 Watts) of solar capacity installed at your home, up to a maximum of $5,000 per eligible home. The Greener Homes Loan, an up to $40,000 interest free loan is also available to help fund your installation. The loan is an unsecured personal loan based on your creditworthiness and can take up to 6 weeks to get approval. One thing to keep in mind, with these Federal grant and loan programs - you will have to pay for the installation up front and receive your reimbursement afterwards, so make sure you have access to enough money to pay the full cost of the installation.

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Besides the Federal programs, your Province or Municipality might have additional incentives that can help save some more. Make sure you check any local resources that may be available to you or contact us to learn more.

Each Province has different rules on how they treat production from your grid-tied solar installation (commonly known as Net metering). In Alberta, homeowners can sell any excess production from their solar installation back to the grid at the same price they currently pay their utility (see Microgeneration credit in the image above). 

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Also some portions of the Distribution & Transmission charges from your utility are variable (i.e. based on your consumption/purchase from the grid). For example, in Calgary the Transmission charges are variable (based on the kWh of energy bought from the grid) and Distribution charge has an element of variable charges and a fixed charge per day. You will save money on production from your solar installation that is consumed by your home and only pay for the electricity you buy from the grid/utility when your system is not producing electricity (i.e. at night).

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As part of your evaluation, make sure you understand how the net metering rules in your Province and how your utility calculated the transmission & distribution charges as this will definitely impact the economic value of your investment.

Depending on where you live, you could also take advantage of Solar Clubs during the peak summer months, when your system may be producing more electricity than you consume. As part of this effort, you will be signing up for a plan with a higher electricity rate during the summer months, giving you the ability to maximize the revenue from selling your excess production back to the grid. Do not forget to switch your electricity plan to a lower rate in the winter months where your system’s production will not be higher than your consumption due to the shorter sunlight hours. Participating in a solar club typically makes sense if your system is designed to offset at least 100% of your annual electricity consumption or if your system is designed to produce more electricity than your typical consumption in the summer months. 

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Another way to optimize your electricity savings is to shift your usage patterns after installing the solar panels. Running the washer/dryer, dishwasher and other appliances that draw more electricity in the daytime (when your solar panels are producing electricity) will help optimize your savings as you will be saving on the transmission and distribution costs associated with these units of electricity that are consumed on site.

If you happen to live in Alberta, you can also monetize the carbon offsets your system generates, to generate an additional revenue stream over 10 years. Use our carbon calculator to find out how much additional revenue your solar PV system might generate over 10 years.

Adding solar to your home is a significant investment but can be quite attractive with all the grants/incentives and savings opportunities. As part of our service, we help you understand your potential savings from the investment, giving you all the information needed to make a sound decision - at no cost to you.

Fill out our intake form when you’re ready and let us add solar energy to your home