# Free Money? Solar panels



## jamesbe (May 8, 2010)

Anyone look into this?
http://www.pure-energies.com/new-home-buyers.html

They install panels on your roof and pay you? It's not a huge payout ($1200 max) per year most likely a lot less. But sounds interesting, I have a HUGE roof.


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## rookie (Mar 19, 2010)

there are no free lunches. so i would watch out...


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## atrp2biz (Sep 22, 2010)

Welcome to the Ontario FIT.


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## CanadianCapitalist (Mar 31, 2009)

I've looked a bit into this, though not at companies that want to rent your roof. If you have a large roof and are planning on staying put for a while, you might want to investigate whether you want to buy and install solar panels outright. I stopped looking because our roof isn't large enough for me to go through the hassle. 

This story in the Ottawa Citizen has some numbers:

http://www.ottawacitizen.com/technology/Soaking/4929485/story.html


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## crazyjackcsa (Aug 8, 2010)

CanadianCapitalist said:


> I've looked a bit into this, though not at companies that want to rent your roof. If you have a large roof and are planning on staying put for a while, you might want to investigate whether you want to buy and install solar panels outright. I stopped looking because our roof isn't large enough for me to go through the hassle.
> 
> This story in the Ottawa Citizen has some numbers:
> 
> http://www.ottawacitizen.com/technology/Soaking/4929485/story.html


The numbers still don't make a lot of sense and what gets me is how little people understand about compound interest.

They figure they'll make $9500 a year for 20 years. Or about 190k. That's around a return of 5-6%. Then you still have to pay taxes on that as income.

They needed to borrow the money to install the whole thing, eating into their return (yes you can write the interest off, but there's still a cost.

Also, there is upkeep to the system, and your roof underneath. Upkeep may be minimal, but you do have to take it into account. 

Plus if you sell your house. Does it help resale or hinder it?

It really doesn't work out, unless you can pay for the whole thing outright.

To be honest, I don't know how much the HST would benefit, maybe somebody else can fill me in there.


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## CanadianCapitalist (Mar 31, 2009)

crazyjackcsa said:


> They figure they'll make $9500 a year for 20 years. Or about 190k. That's around a return of 5-6%. Then you still have to pay taxes on that as income.


I don't know how you are figuring a pre-tax return of 5 to 6%. For an investment of $66K and an annual cash flow of $9,500 for 20 years and assuming the PV system has zero residual value (likely a very conservative assumption), the Internal Rate of Return is 13%. For a relatively low-risk investment, that's not bad. Yes, you have to pay tax on the income stream but you also get to claim depreciation. 

I suppose you could calculate a compounded rate of return but you need to make assumptions about discount rates etc. For investments such as this with an initial investment and a stream of payments, IRR is a more appropriate measure.


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## crazyjackcsa (Aug 8, 2010)

CanadianCapitalist said:


> I don't know how you are figuring a pre-tax return of 5 to 6%. For an investment of $66K and an annual cash flow of $9,500 for 20 years and assuming the PV system has zero residual value (likely a very conservative assumption), the Internal Rate of Return is 13%. For a relatively low-risk investment, that's not bad. Yes, you have to pay tax on the income stream but you also get to claim depreciation.
> 
> I suppose you could calculate a compounded rate of return but you need to make assumptions about discount rates etc. For investments such as this with an initial investment and a stream of payments, IRR is a more appropriate measure.


I'll defer to you, but here's how I figure it. 66k initial "investment" Total payout 190k. Over 20 years, that's 5.5% return. Now that I think about it, it would be even less, since there would only be 124k profit.

You don't get your original 66k back at the end of course.

Granted, you could always reinvest your payouts after the system is paid off but that's a different point entirely.


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## Oldroe (Sep 18, 2009)

Was talking to a volunteer fireman that said their instructions when they encounter solar panels on roofs is let it burn. 

Think I would check that and insurance liability.


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## Cal (Jun 17, 2009)

The original link didn't open. Perhaps it is out of date.

I don't think that I would want to rent out my roof first of all, second, definitely not wanting to commit to that for 20 years.

Something I am looking in to. As CC mentioned above, size of roof, open acreage would make a difference, as well as what direction the flat part of your roof faces, as there can be additional mounting costs to get southern exposure on a west facing roof area for example.

My recent thoughts/research have been that a basic set up (no additional mounts, or pole mounts) takes anywhere from 8-10 years to pay for inself, depending upon size, financing, labour. Perhaps it is safest to plan for 10 years to repay, as if the roof needs to be reshingled they would have to be removed, then re-installed. But I can't find any properties right now that pay for themselves in 10 years. Perhaps this would be a way to help a rental property be more profitable.

After 10 years, and it is paid for, yes taxed as income. But easier money than working.

I am sure that the best time to install them would be when your roof needs to be reshingled, as that would probably get you 15 years before you have to do anything. Assuming no tornados damage them. And best case would be to get a metal roof. More expensive, but no maintenance.

Does anyone on here have solar panels on their property? More curious as to know how many years it took to recoup their initial expense. 

Same for wind turbines for that matter? I am referring to wind turbines that they own, not gov't ones.


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## OhGreatGuru (May 24, 2009)

The only way I can think that they can make it work is that McGuinty is forcing Hydro to buy the electricity at far above what they are allowed to sell it for. So ratepayers and/or taxpayers are subsidizing it.

They already announced in March they are dropping the rate from 80.2 cents/kWh to 54.9 cents /kWh. What happens to your investment return when they (or another government) cut the rate again?


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## Cal (Jun 17, 2009)

What rate do we currently buy it at?

That sure is a big difference in income isn't it. It is too bad that the cost of these panels and such are so high, otherwise alot more individuals would take the initiative to generate their own energy.


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## brad (May 22, 2009)

Cal said:


> Does anyone on here have solar panels on their property? More curious as to know how many years it took to recoup their initial expense.


That depends strongly on where you live. In remote areas where it can cost $20K just to bring power lines up to your house, you can recoup the investment in solar panels in a year or two. I have an acquaintance who bought a remote parcel of land near Telluride, Colorado, and solar power was the only economic option.

Here in Québec, given the low price of electricity it would probably take 50 years or more to recoup your initial expense, plus there would be no environmental point since most of our grid-supplied electricity is already clean. 

I have a friend who lives between Seattle and Vancouver who installed solar panels on her house a few years back; Washington State allows net metering (your electric meter runs backward when excess power generated by the panels feeds into the grid), so back then she was estimating a payback period of 5-6 years; I'll have to check with her to see if that estimate still looks good. PV panels can still generate power on cloudy days (although not as much as during the sunny summers).


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## canadianbanks (Jun 5, 2009)

I was thinking of installing solar panels on my roof, but at the end I decided against it. I think that the cost of the solar panels will go down significantly in the next 1-2 years, and for now it's just not economical enough for me to do it.


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## OhGreatGuru (May 24, 2009)

Cal said:


> What rate do we currently buy it at?
> 
> ...


That's hard to say, now that we have gone to Time-of-Use billing. But the officially posted OEB 2012 price in Ontario is 6.2cents/kwh to 10.8 cents per kWh, depending on time of day. On top of that, you pay a delivery charge, regulatory charges, & debt retirement charges, that are proportional to your consumption. But these latter would be the same regardless of how the electricty is generated. In Ottawa the actual electricity cost is about 50% of a residential bill.

In any case, if Hydro has to pay 55 cents/kWh for solar power, that's at least 5 times the price they can sell their power for.


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## LondonHomes (Dec 29, 2010)

I have a friend who got a lot of these contracts at the 0.80 rate. He figures his payback will be 3 years and then it's all profit after that!

It's a good deal for him and a good policy for the government to kick start the industry with this type of subsidy.


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## Sustainable PF (Nov 5, 2010)

LondonHomes said:


> I have a friend who got a lot of these contracts at the 0.80 rate. He figures his payback will be 3 years and then it's all profit after that!
> 
> It's a good deal for him and a good policy for the government to kick start the industry with this type of subsidy.


I think your friend is far too optimistic.

This is a good calculator for the ROI for microFit investments: http://switchkingston.ca/wiki/doku.php?id=microfit:calculator

You likely need to change up the numbers to reflect your own situation.


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## Solardan (Aug 23, 2013)

LondonHomes said:


> I have a friend who got a lot of these contracts at the 0.80 rate. He figures his payback will be 3 years and then it's all profit after that!
> 
> It's a good deal for him and a good policy for the government to kick start the industry with this type of subsidy.


Unfortunately the window for getting a 0.80 rate is now closed, but the Feed in Tariff Program is starting up again in the Fall. The rates will be about half of what it was a year ago, but as you said it is still a good deal. You get to help the environment and get paid for it at the same time. I also read on http://www.isolara.com that even if you move you can keep the contract in your name and still get paid for the electricity the system produces.


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## marina628 (Dec 14, 2010)

My friend has 6 acres and a 5000sq ft house plus Stables for 10 horses.He grows all his own food plus surplus and he invested about $120,000 installing solar panels in a section of his property(not on his roof) He looked at what he would pay on the hydro bill vs what he will earn and I suppose it was worth it.I believe he has 4 sets of 12 panels on his land.We considered it but we usually sell our home every 10 years so don't think we would want to get into this.I already know within next 7 years we will sell the cottage and our primary residence to downsize to something our youngest can live in and we can be in part of the year.My house in Newfoundland is drawing me ,my sister sends me photos almost every week of how the project is going there.So in 7 years we will be in Newfoundland as long as the weather allows us and spend rest of the time between Ontario and someplace south.


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## Eclectic12 (Oct 20, 2010)

brad said:


> That depends strongly on where you live. In remote areas where it can cost $20K just to bring power lines up to your house, you can recoup the investment in solar panels in a year or two ...
> 
> Here in Québec, given the low price of electricity it would probably take 50 years or more to recoup your initial expense, plus there would be no environmental point since most of our grid-supplied electricity is already clean ...


You don't really need to be all that remote ... you just need to be somewhere there aren't power lines and either few neighbours or none that want to help bring the cost of running the hydro lines in. I was talking to a guy who built a cottage in Quebec who is looking at this for the cottage. He's also got another incentive beyond the cost of getting the hydro line in as the cottage is off a well that needs an electrical pump. He's current got a generator/battery setup for the well. The suggestion was that the solar would take care of most of the summer so that less fuel was needed for the generator.


Cheers


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