Home Solar Panel Electricity and MicroFIT

Earlier this week I wrote an article on Smart Meters and how old electromechanical electric meter was swapped out by our local utility for a new smart meter.

A long time visitor to DailyHomeRenoTips.com, Vasile, left a couple of comments and then exchanged some emails with me ‘off line’ about my concerns on investing in solar panels to generate electricity.

My personal subjective view is that yes, if every house has them we would be in much better shape environmentally. I think that’s kind of obvious … at least to me.

However, my personal subjective view is that mass investment by Ordinary Joe homeowner will not make a personal investment unless the financial payback is around 5 years or less. There are too many other short term (mortgage, food, clothing, property taxes, car loans, vacations with the family, etc.) and long term (Registered Disability Savings Plan, Registered Retirement Saving Plan, Registered Education Savings Plan, etc.) money dragons, as I call them, to which my hard earned after tax money is fed.

To this comment, Vasile mentioned that the key is cash flow; if each year more money is made by selling electricity generated by solar panels on top of my house than it costs me to pay back the loan used to purchase and have them installed, then there is no reduction to the money being fed to my money dragons.

Hmmm. Cash flow, eh? In one aspect I agree with him. If I can get solar panels installed on my home’s roof and have the revenue earned by selling the electricity back to my local utility greater than what it will cost me to pay for them, how can one loose? Can it really be that easy?

Now, I have to admit I have an aversion to things I do not know or understand. Like the human brain; seriously, how the heck does it really work? Or, like electricity. This is likely because I tend to learn by seeing and doing. If I can’t see it and until I personally do something I can’t really understand it. Everyone learns primarily through different ways; for me it is seeing and doing.

I can’t literally see electricity.

However, my financial oriented academic and professional background makes me intrigued by this micoFIT program in Ontario. From the program’s own Overview (34 pages worth….that’s some overview icon smile Home Solar Panel Electricity and MicroFIT ), it is defined as follows:

“If you are a homeowner, farmer or small business owner … you have the opportunity to develop a very small or “micro” renewable electricity generation project – of 10 kilowatts (kW) or less in size – on your property. You’ll be paid for all the electricity you product through the microFIT Program.

Owners of these projects will be paid a fixed price for the electricity they product. Prices are set at a level intended to enable project owners to recover the cost of the project, as well as to earn a reasonable return on their investment over the term of the contract.”

The current pricing for rooftop solar PV microFIT projects is 80.2 cents per kilowatt hour for a 20 year contract.

Compared to what my current utility is charging me of what I think is (because this is really all new to me) 6.5 cents per kilowatt hour in the summer for the first 700 kilowatts used and then 7.5 cents per kilowatt hour thereafter, the microFIT revenue to be paid of 80.2 cents per kilowatt hour seems like an encouragement for any household in the Province of Ontario to participate.

However there are a lot of costs, considerations, permits, etc., etc. involved with this; at least there appears to be to me.

Yet, if Vasile is correct and my net, net, net cash flow (the amount of money earned from the program should I proceeded with it minus the amount it will cost me to participate) is positive it is something that is worth looking into.

Now, in my initial very minimal research I found that there are a lot of different types of resources available to learn from. Here are a few which I have found the most useful so far which if you are interested in even just learning about this for yourself I now list for you below:

1. The microFIT Program Overview document referenced above above

2. This thread called Solar PC and Ontario’s MicroFIT (or, Things Your PV Installer Should Be Telling You) in the Green Power Talk Forum which provides a very nice summery of different aspects and issues.

3. The web site Solar Powered in Toronto by someone who has just gone through the process and is living with solar panels on his roof top, including great graphs and charts on the amount of electricity and money he is earning from his installation.

4. The OurPower web site whose mission is “Our Power’s mission is to facilitate massive change and growth in homeowner solar energy. We are a Not-For-Profit organization partnered with all key stakeholders in the industry to ensure sound business principles, access and fairness to all.”

Now, I read in the Toronto Star a few days ago that the microFIT program has reduced the rate from 80.2 cents per kilowatt hour to 58.8 cents per kilowatt hour for ground mounted solar panel installations; just like that. The rationale is that it costs less to install solar panels on the ground than on a roof.

Hmmmm. It is this another case of a government changing without notice a policy with major financial implications to individuals? The about face by the Federal Government on a certain Halloween several years ago now about the eligibility and income tax treatment of Income Trusts comes to mind.

However, now that the microFIT program has been in existence for a full year plus now, actual results are starting to come in and will provide fact based data to be used for policy change, just like any new government program of any type.

How safe is the 80.2 cents per kilowatt hour for roof mounted solar panel installs, especially with the price of solar panels coming down?

I think I’ll take the next step if it does not commit me to anything and does not cost a lot.

The OurPower web site referred to in point 4 above has for a cost of only $25 (apparently it used to be at no cost yet the $25 will be refunded if I proceed with a solar panel installation) an assessment of your actual home’s potential for solar panels. They will provide estimates of the amount of electricity a solar PV system on your roof can generate, the amount of revenue it will produce under the microFIT program, estimated costs of such a solar PC system sized to your home’s roof, etc.

What I really like is that part of this $25 provides the opportunity for me (or anyone who participates) to talk on the phone after the online assessment for my home has been completed with one of their experts so I can understand the assessment, options available to me, etc.

That is pretty cool.

So, two days ago I signed up.

Curious about the value and content of the OurPower online solar assessment? Simply select this link to continue to the next article in our series to view the OurPower online solar site assessment we received.

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Comments

  1. David says:

    Great piece of writing, thought it was very useful. I will be putting your site to my personal list of faves, keep up the fantastic articles bud!

  2. Dan says:

    Thanks, David.

    Dan

  3. Our system has been operational for a year now, so the big thing has been figuring out what the true, bottom line, average daily production is, based on real world performance.

    So, as I commented elsewhere on the site…we’re getting an average of 10.3 kWh per day for the year, from our 3.15 kW array.

    That’s slightly above average for Toronto, but there will be year-to-year variances too. The website has more details and full production graphs for the year as well (and now also grid consumption versus solar production graphs).

    –Julian

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