How much do solar panels cost?

This is without a doubt the most important question on every homeowner's mind when they first look into solar. Most of us see the price of our electricty bills going up year over year and start to think about alternative options. Solar is well known for producing clean renewable energy, but we often hear that the systems can be prohibitively expensive. So how much do panels usually cost?

As you can imagine, every house is very different, and so too are their energy needs. The amount of panels a particular house will need depends a lot on the orientation of the home, pitch of the roof, and available roof space. Other considerations are needed for ground-mounted systems. Solar pricing can also vary quite a bit depending on your province, as some province's offer different incentives and rebates for solar.

Due to all these variable factors, if you are serious about getting an idea of what solar will look like for your home, it's best to have a solar installer complete a comprehensive assessment of your home. Today's advanced software is incredibly accurate and it takes a lot of the guesswork out of the whole project.

There is however, a quick method of getting a very rough idea as to what solar will cost you overall.

Find out how much you are spending on average for electricity per month through your utility company. For this example, let's say you're paying about $120 / month for power.

First, we'll multiply that $120 / month x 12 months to figure out what you're spending per year = $1,440 / year

Next, we'll multiply that $1,440 by 12-14 (this multiple varies because prices vary by Province). This ends up being $17,280 - $20,160. (You can add on HST depending on your province. For example, in Ontario, you would add on 13% HST so the pricing would become $19,526 - $22,780).

This price range gives you a very rough idea of the average price taxes in for a solar panel system in Canada. This figure will be the NET cost after you factor in your Government rebates. Prices may be higher or lower depending on the equipment and warranties offered.

At face value, spending $20,000 to save $120 might not get you too excited but it's actually a 7.2% return which is equal to the inflation adjusted return of the S&P 500 over the last 100 years.

Let's say that you decided to purchase solar panels based on the example above. There are a couple of additional factors which are important to discuss to fully understand the return on your investment:

• Electricity prices - So you've installed your solar panels and your previous $120 / month power bill has disappeared, saving you a 7.2% return per year. One thing we know for certain is that life does not get any cheaper. So in the following years, the price of electricity continues to rise (In some parts of the country such as the east coast, it is scheduled to rise 5-7% per year - ouch!). As the price of electricity goes up, the value of your solar energy does as well, and it is now saving you more than before. When you first purchased the panels they saved you $120 / month. But after 10 years, the price of energy has gone up to about $195 / month for the same amount amount of energy. This means that your panels in year 10 are saving you much more, and your return on investment goes up! In this scenario you'd be netting an 11.7% return per year. Considering the long lifespan of solar panels (25 - 35 years) you can start to see how this benefit adds up!

Ok so the numbers make sense in the long run, but that doesn't change the fact that dropping $20k today on a home improvement project, is a lot of money.

• Financing - The best solar installers in the industry will have extensive options for financing your system. Many of them offer low interest rates so your monthly payment for solar ends up being about the same as what you were paying for power before. Meaning you won't notice much of a difference by making the switch. Now you're probably thinking, if there isn't much difference between paying for solar financing vs paying my utility like normal, then why go through the hassle of intalling at all?

When you make payments towards your solar panels on a financing plan, your payments are fixed. This means you are essentially locking in today's price of power for years to come. This is the best way to protect your household from rising electricity prices and inflation. Secondly, every month that you make a payment towards your solar panels, that money is going into the value of your house, building equity. It's put to much better use than handing it over to the utility companies.

With the current solar technology, Government incentives, and financing options there's never been a better time in Canada to go solar. Whether you go solar or not, every month you'll have to pay for electricity to someone, why not pay yourselves?