Solar Power 101: What Ontario Homeowners Need to Know

With the climate crisis on everybody’s minds these days, solar power is on the rise. Solar panels are a great way to reduce your carbon footprint and reduce your energy bill. Thinking about powering your home with solar panels? Welcome to solar power 101.

Read on to get a better understanding of the costs and benefits of installing solar panels on your home.

What are the benefits of installing solar panels?

• Carbon Reduction: Solar panels produce 5x to 10x less carbon emissions per unit of energy relative to coal or natural gas. 
• Self Sufficiency: You won’t rely on a third-party entity for your energy, and you’ll be providing for yourself with a clean sustainable source.
• Property Value: If you decide to sell your home, then the value of your solar power system can be calculated and added to your home accordingly. However seeing that the payback will take about 8-10 years, you may want to install panels on your forever home- not one you intend on selling soon.

What kind of solar system do I need?

EnergyHub has a calculation to help:

Size of system needed (kW) = Yearly energy use (kWh) / Annual equivalent full sunlight hours (h)

To figure out the size of solar system you need, take a look at your monthly hydro bills to determine how much energy you typically use in a year. Remember that energy usage fluctuates throughout the year, so multiplying a month’s usage by 12 won’t give you an accurate number – you’ll need to add up all your bills.

In Ontario, the average household uses about 9,500 kWh of electricity per year. Last year, southern Ontario averaged 2,000 hours of sunlight. 

Applying this to the calculation: 9,500kWh / 2000h = 4.75kW (system size needed)

How much space do I need to install solar panels?

Physical space required = Size of system needed (kW) / size of panel (in kW) x Physical size of panel (in sqft)

The average solar panel is approximately 18 sqft in size and produces about 300watts of power, or 0.3kW. While most urban Ontario homeowners put solar panels on the roof, you can also install a solar system in your yard if you have the space.

Using our same example and a solar system size of 4.75kW:

4.75kW / 0.3kW x 18sqft = 285sqft (amount of space needed)

How much does it cost to install solar panels in Ontario?

Once you’ve calculated the size and space required to install your new solar system, it’s time to estimate the cost.

Take the size of your system in watts (4.75kW = 4,750 watts) and multiply it by the average cost of installing a solar system in Ontario ($2.46 per watt in 2021). 

In this case, 4,750 watts x $2.46 per watt = $11,685.

Note that this is a rough estimate and the price could fluctuate depending on the equipment and installers used – prices can easily go as high as $3 per watt in Canada. 

Roof vs. Ground Solar Panel Installation

• Shingle roofs should be a maximum of 10 years old and in good condition before solar panel installation
• South facing roofs are ideal, east and west facing are good, but north facing roofs are not great candidates 
• Roofs with a slant of 30 to 45 degrees are the best candidates for solar panels. Flat roofs can also accommodate solar, but the mounting system will be different (and could change costs)

• Expect higher upfront costs for yard installation vs. roof installations
• Ground panels may be more efficient because they can be placed south at the optimal angle (about 45 degrees) and avoid shading
• Ground panel systems have better lifetime and higher financial benefits (due to more sunshine hours and higher Internal Rate of Return)

Where do I buy panels?

There are plenty of solar panel choices in Ontario. Note that while some companies only have an online presence, there are smaller shops across Toronto and the GTA that sell panels too.

Some of these shops include Blue Sky Solar (based in Mississauga), Daystar Energy (based in Burlington), Solar Dynamics (based in Kitchener), and Goldwater Solar (based in Toronto), but there any many local options!

For Toronto residents, the Home Energy Loan Program can help fund a variety of renewable energy projects, including solar systems. The loan is attached through your property and paid back through your property tax bill, meaning if you move, the loan will be transferred to the new homeowners. 

What happens to the solar power produced by my panels?

In Ontario, you can earn credits toward your energy bill or sell extra energy back to the grid via net metering. Your local distribution company will read your meter (as they do now), then subtract the value of electricity you supply to the grid from the value of what you take. Your bill will show you the net difference, acting like an electricity trade. So if you supply more power than what you use, you’ll receive a credit that can be carried forward for up to a year.

For example: If your panels produce 1,000kWh of energy and you only utilize 700kWh, you can carry forward the credit from the remaining 300kWh for up to a year. Once you track your energy usage you can mindfully save up, like saving extra spring energy credits for air conditioning in the summer.

On average in Ontario, you pay about 23.5 cents per kWh. Once you make the switch (depending on the solar system size and how much energy you produce), it works out to about 9-11 cents per kWh.

What ROI can I expect from my solar panels?

Currently, the general payback period for an average-sized residential solar system in Ontario is 8-10 years, once all costs (including unexpected potential maintenance) are factored in.

If you intend to sell your home after the payback period, you can make an even greater ROI. Bluewater Energy have found that for each 1kW of solar installed, your home’s value could increase by up to $6000. For an average home, it’s roughly a 3-4% increase!