Facts on Solar PV and microFIT program
1. What is the Feed–In Tariff (FIT)?
2. How can API ensure to meet the Ontario Government’s domestic content requirements?
3. Where can I find the FIT Rules?
4. If my roof shingles need replacing, how easy is it to do with the solar equipment attached?
5. How do you attach the solar panels? Does it require that you make holes in my roof? If so, will it leak?
6. If I sell my property, what effect does PV have on the sale price?
7. Will I be taxed on the revenue received from the microFIT / FIT programs?
8. Does a residential home earn the same amount of return as a commercial unit?
9. Does the Electrical Safety Authority (ESA) need to do an inspection?
10. When is a good time to install a solar energy system at my home?
11. Is there an alternative option if my roof isn’t suitable for a rooftop system?
12. How do I know what size of a system to purchase?
13. How quickly would a system pay for itself?
14. How do I get paid for installing a MicroFIT unit?
15. How much is the monthly fee to distributors by microgenerators?
16. Is there an alternative if you can’t use your roof?
17. How long will the system last?
18. Do these systems require a lot of maintenance?
19. What happens if the panels are shaded?
20. How much roof space is required to install a 3 kW (DC) PV system on my roof?
21. Are panels recyclable?
22. What is the Return on Investment (ROI) or “payback period” for solar installations?
23. Can I install the system myself?
Feed-in Tariff Program
What is the Feed-In Tariff (FIT)?
If you are a homeowner, farmer or small business owner, or if you manage an institution such as a school or place of worship, you have the opportunity to develop a very small or “micro” renewable electricity generation project (10 kilowatts or less in size) on your property. Under the microFIT Program, you will be paid a guaranteed price for all the electricity your project produces for at least 20 years. The microFIT program is currently offering a contract price of 80.2 cents/kWh for solar PV rooof top systems and .643 cents/kWh for solar pv ground mount systems. The microFIT program is a stream of the OPA’s Feed-In Tariff (FIT) program for renewable energy in Ontario.
The microFIT Opportunity
Not only will the new FIT program benefit the environment, create jobs and boost Ontario’s economy, but it will offer Ontario homeowners and small commercial businesses a great investment opportunity through the microFIT program.
How can API ensure to meet the Ontario Government’s domestic content requirements?
Alternate Power International manufactures in Ontario made racking systems including solar trackers, ground mount, pitched and flat roof systems.
Where can I find the FIT Rules?
The FIT rules are located on the Ontario Power Authority’s website. The Green Energy Act (GEA) has received Royal Assent but has not been proclaimed.
If my roof shingles need replacing, how easy is it to do with the solar equipment attached?
In some cases home owners may consider having their roofing shingles replaced before having the solar installed (in the event, for instance, that the shingles are reaching the end of their life expectancy). The replacement of roofing shingles is a service we can also provide, and would be quoted separately. If the roofing shingles are relatively new, this is not a concern. Solar panels actually extend the lifespan of your roofing shingles (because the sun is what ages the shingles, and the panels are covering a portion of the roof).
How do you attach the solar panels? Does it require that you make holes in my roof? If so, will it leak?
The racking system for your solar panels needs to be secured to your roof. Holes are made in the roof, and fasteners are installed to secure the racking system, then covered with a flange, and sealed with roofing sealant to insure that no leaks occur. Installation of solar panels is no more invasive than installing a satellite dish or weather vane.
If I sell my property, what effect does PV have on the sale price?
Energy conservation and renewable generation adds value to a home. Solar energy can be one of the best home improvement investments you make. The microFIT contract is transferable to the new homeowners. It can also be a great bargaining tool when negotiating your selling price.
Does a residential home earn the same amount of return as a commercial unit?
No. The Ontario Power Authority has developed a streamlined approach to small renewable energy projects under the umbrella of the Feed-in Tariff (FIT) Program. The microFIT program will pay home and small business owners up to $0.80 per kilowatt-hour of electricity produced by a solar electric system. The Ontario Power Authority will enter into a 20-year contract at this rate with persons who install up to a 10-kilowatt solar electric system. On the other hand, the FIT Program is a simpler way to contract for generation, due to standardized Program rules and standardized contracts, including a standardized price.
In the context of the proposed Green Energy Act (GEA), a FIT Program will be used to procure renewable energy supply going forward. This means commercial developers of renewable energy supply projects will receive a FIT contract if they meet all requirements in the FIT Program Rules.
Generally, a Feed-in-Tariff has a number of key attributes:
- Open to various renewable energy supply technologies
- Transmission and distribution-connected projects
- Prices adjusted by technology and project size
- Prices are designed to cover total project cost and provide a reasonable rate of return over a long-term contract (generally about 20 years)
- Promotes community and Aboriginal projects
- Meets renewable energy growth with proactive transmission and distribution expansion
- Streamlines environmental and municipal approvals.
Will I be taxed on the revenue received from the microFIT / FIT programs?
Yes, you will be taxed just like any other personal income you receive. Since you're entering into a contract with the OPA, the Canada Revenue Agency (CRA) will unofficially classify you as a business. You don't have to register as a business, nor will you be required to collect GST from the OPA unless you are already registered as a business. Being considered as a business will have an advantage for you; the CRA will allow you to deduct the full cost of the system against the income received using an Accellerated Capital Cost Allowance (ACCA) deduction. We advise all our clients to first discuss the tax implications with their accountant or tax specialist.
Does the Electrical Safety Authority (ESA) need to do an inspection?
All new wiring or wiring alterations to your home, including the installation of solar PV, require an inspection by the Electrical Safety Authority. This inspection is also a requirement for connecting to your local utility grid (as an Embedded Generation Facility). Contact us to learn more.
When is a good time to install a solar energy system at my home?
It is wise to consider installing a solar energy system when you are preparing a new build, undertaking renovations, energy efficiency upgrades, or after you have repaired or re-shingled your roof. It is important to consider roof warranties when installing additional equipment on your roof.Contact us to learn more.
Is there an alternative option if my roof isn’t suitable for a rooftop system?
Yes, PV ground mounted systems can be used for an average home system. Ground mount system can be Static Mount or Tracker Mount. API manufactures both types of ground mount installation. The solar modules when installed on a tracker system generates about 25% more than any static mounted system.
How do I know what size of a system to purchase?
According to the FIT program, residential PV systems maximize their system up to 10 kW (<=10 kW are microFIT, >10 kW are FIT). Typical residential systems are between 1 - 3 kW (5 - 15 panels) capacity, although larger photovoltaic systems are possible. Factors affecting the sizing of the system will include: household consumption (if off-grid), roof space and financial considerations. A site visit will help an installer to size and quote on an appropriately sized system. Contact us to learn more.
How quickly would a system pay for itself?
The payback of a Solar system will vary based on three key inputs.
- The cost of the installed system
- The amount of energy in kWh’s the solar system can produce
- The price paid for the energy produced.
Cost
A smaller Grid Tied Solar PV system (1Kw - 3Kw) installed on a roof top with fixed mounting angles will cost between $8,000 and $12,000 per kW. This may seem like a significant spread, however there are multiple factors that affect the price such as the quality and efficiency of the panels not to mention the inverter and the roof preparation. Typically one wants to ensure that when installing solar panels on a roof top, the roof is in good repair for it is more costly to make repairs later once the solar panels and hardware mounting brackets are in place.
Energy Production
The amount of solar energy varies based on the geographical location as well as the angle of the installation. Factors such as shade from taller buildings or even trees during periods of the day can significantly reduce the available solar energy as well. In the Collingwood area with a panel that is shade free, one can expect an annual average of approximately 4Kwh’s per day for a 1Kw panel. On some days a 1Kw solar panel will produce significantly more energy (up to 8 kWh’s) and on other days the output could be close to zero (snowing and cloudy all day with very little solar penetration).
In order to gain more output, one could install the system with sun tracking motors and software. Typically this type of installation is better suited to a pole mounted system. The benefit of such a system is a potential increase in output by between 20% and 30%.
Price Paid for Energy Generated
The proposed Feed-In Tariff planned to be launched by the OPA later in 2009 is a 20 year contract at 80.2 cents per kWh for the energy delivered to the distribution system from a solar installation which is <10kW in size. Other price offerings vary depending on the size of the solar panels.
With the three main components required to calculate a simple payback, we can do an example:
Our sample system will be a 2kW solar panel installation.
For our sample system, we will use an installed cost of $11,000 per kW.
Assuming the annual average of 4kWh’s per day X 365 Days X 2kW Panels, our sample system should produce approximately 2,920 kWh’s each year.
At 80.2 cents per kWh, that represents an annual payment of $2,341.84
$22,000 installed cost divided by $2,341.84 = 9.4 years.
This means that in the remaining 10.6 years, a proponent can earn an additional $24,823.
How do I get paid for installing a MicroFIT unit?
You get paid for the electrical energy that your unit produces once you enter into a contract with the OPA. The rate, known as the Feed In Tariff has been set at a rate to help pay for the equipment and the energy that it produces.
Payments for the energy produced will come directly from your local distribution company (LDC) based on the contract that you signed with the OPA.
Once you have installed your equipment, received Electrical Safety Authority permit to connect, entered into a MicroFIT contract with the OPA and entered into an agreement with the LDC you will start to be paid for the energy produced.
The LDC will meter the installation and will read the meter on a predefined scheduled.
A payment will be made to you based on the agreement with the OPA for the energy produced.
A service fee for the metering and billing services will apply to the account that you hold for the generation.
The specific account fee on a monthly basis for the initial period will be the same as the service fee charged on load accounts. This will be reviewed and may change in the future.
How much is the monthly fee to distributors by microgenerators?
The Ontario Energy Board announced at the end of last week, 17 March 2010 that the monthly account fee paid to distributors by microgenerators will be standardized across the province at $5.25/month. With costs varying across the province from $7/month in Halton Hills to around $15/month in for Toronto Hydro and Hydro One customers, this reduces the costs, in some cases by over 65%, of selling your power to your local distribution company.
The new rate will be made retoroactive to September 21, 2009 and all microgenerators are entitled to a credit for the difference on the next bill from their distributors.
On a 2 kW residential PV system, this will raise the ROI by roughly 0.5% annually!
General Solar PV Questions
Is there an alternative if you can’t use your roof?
Yes, PV ground mounted systems can be used. API carries Ontario made ground mount racking systems for different made of solar modules or types of soil. We also carry tracker systems which generate more income than the “fixed” ground mount system.
You may download the financial analysis of a Agricultural 10kW Solar PV System mounted on a Tracker System. Please note that the dollar values shown on the Financial Analysis is for you guide only. The dollar values presented may vary depending on your financial situation.
How long will the system last?
Most solar panel manufacturers will have a 25-year power warranty. This is longer than almost anything else you can buy. The API Racking is warrantied for 20years. Inverters can have warranties up to 10 years or more.
Do these systems require a lot of maintenance?
PV panels require little to no maintenance. Like any external device, be sure to work out a maintenance schedule to do your due-diligence (schedule the same time of the year you check your fire detector batteries, for example). Washing, testing, and monitoring are important.
What happens if the panels are shaded?
PV panels should be installed in areas where they get significant shade–free sun every day. Even small amounts of shade can significantly reduce the output. Our designs and installations also seek to minimize the impact of any shade issues through selection of the proper equipment and good engineering.
How much roof space is required to install a 3 kW (DC) PV system on my roof?
Approximately 65 to 75 square feet per kW mounted on a sloped roof. More space is needed on a flat roof. Contact us to learn more.
For more information, follow this link on planning Solar PV System installation for Home and Business.
Are panels recyclable?
Although there is no formal recycling program in place for panels, parts of panels may be recycled separately where programs exist.
What is the Return on Investment (ROI) or "payback period" for solar installations?
When considering full cost accounting, the true payback is the environmental benefit, such as peak load offsets that you can only achieve with solar technologies. Financial payback is a relative concept to be calculated on a case-by-case basis. Some of the factors that affect payback are: the cost of electricity prices being offset, cost of the system, exposure to the sun, size of the system, financing terms, etc. There are some tools, such as RetScreen that can assist homeowners in predicting the production of a system and assist in determining payback. Contact us to learn more.
You may download the financial analysis of a Residential 10kW Solar PV Roof top System. Please note that the dollar values shown on the Financial Analysis is for your guide only. The dollar values presented may vary depending on your financial situation.
Can I install the system myself?
Only experienced solar electric system technicians or licensed electricians should install solar systems.