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Many eco-minded home owners want to harness the power of the sun. We’ll help you weigh the costs and benefits.
Should you put solar panels on your roof? It sounds like a great idea to generate electricity from the renewable and free resource that is the sun, but the answer depends on many variables, ranging from your household’s energy consumption and where you live to the size of your budget. Let’s dig into the details.
A solar panel system can help you to reduce your carbon footprint, but from a financial perspective, solar may or may not make sense for your home. As a starting point, here’s what you’ll need to consider:
The average Canadian household uses 11,135 kilowatt hours (kWh) of electricity per year, but your usage depends on the climate where you live, the size of your home, how airtight and well insulated it is and—one of the biggest factors—your energy consumption habits. For instance, the energy used by two families living in identical homes can differ considerably when one only turns on the AC during the hottest days of the year and the other leaves it running all summer long.
Do you want a system that covers all your electricity costs or just a portion of them? The following questions can help you to decide:
Ultimately, it comes down to personal choice. Some home owners find peace of mind knowing they’re covering all their electricity needs despite the higher cost of installing more solar panels. Others are happy to begin with a more modest solar array—perhaps with the mindset of expanding the system down the road.
That will also help you decide whether to invest in a backup battery solution. Without one, during the summer months you won’t store any energy and you could simply lose a lot of the energy your solar cells produce. And during our long, cold winters, solar systems produce a lot less energy, especially if there are several cloudy days in a row. Having a backup battery serves a dual purpose: storing excess energy your solar system produces on sunny days, and providing an additional source of energy during power outages and on cloudy days when your solar system likely won’t generate enough electricity to meet your needs.
The good news: solar panels have really come down in price, often costing less than a third of what they did a decade ago. You can now find solar panels that work out, on average, to $2.50 to $3.50 per watt. Also, you may be able to lower your costs with a government grant (more on this below).
Bear in mind, though, that the cost of a solar system includes not just the panels and potentially a backup battery bank but also the mounting hardware required (for roof or ground), the inverter that converts direct current (DC) to the alternating current (AC) that powers your home, and labour.
To give you an idea of how the cost of installed solar systems can vary across the country, the website Energy Hub pegs the average price at $3.01 per watt, which in turn adds up to $22,500 for a 7.5-kW system. That average reflects costs that range from $2.34 to $2.59 per watt in Ontario to $4 per watt or more in Nunavut.
To give you a real-world example, in early 2023 I asked Ontario-based Delta Energy Solutions to estimate the cost of installing a solar system in my own home in Ridgeway, Ont. It offered quotes for two options: $19,238 (taxes included) for a 5.46-kW installed solar system, which averages out to $3.52 per watt, and $30,707 for a 15.51-kW system, which averages out to a far more cost-effective $1.97 per watt. The upfront labour costs are pretty much the same, whether it’s a smaller or larger system, so the cost difference mostly comes from the price of the solar panels. Putting those numbers into perspective, for our home the 5.46-kW system would only cover a portion of our monthly electricity needs, whereas the 15.51-kW system would meet all our electricity needs for most months of the year.
One other key consideration, which Delta Energy Solutions made sure to include in its quote: if you qualify for the solar rebates referenced in this article and chose to dedicate those rebates solely to solar, you could lop $5,000 to $10,000 off your cost, which would in turn significantly reduce the dollar cost per watt.
For years, the overarching support program for home owners in Canada (everywhere but Nunavut) who wanted to install a solar PV system was the Canada Greener Homes Grant, which was offered through NRCan (Natural Resources Canada). It offered grants of $1,000 per kW for newly installed solar systems, up to $10,000 in Ontario and $5,000 for the rest of Canada. Home owners registered either on that site or via a provincial partner—for instance, Efficiency Nova Scotia, Rénoclimat (Quebec) and Home Efficiency Rebate Plus (HER+) (Ontario). Unfortunately, NRCan stopped accepting new applications for the Canada Greener Homes Grant in mid-February 2024. Home owners can still apply for the Canada Greener Homes Loan and the Oil to Heat Pump Affordability program.
It’s best to think of solar panel pricing in terms of price per watts per hour, not the price of individual panels. Most of the panels on today’s market produce between 250 and 500 watts per hour, but they can vary from as low as 100 watts for $75 per panel to 480 watts for $384, on up to 640 watts (two 320-watt panels) for $760. There are also panels exceeding 700 watts being introduced into the market in the coming months. Virtually all these panels have a lifespan rating of 25 years or more.
When shopping around, check the efficiency rating of these products, meaning the percentage of energy from sunlight that’s being converted into electricity. Keep in mind that:
If short-term savings are more important than longevity, another option is to buy used (and maybe refurbished) solar panels, sourced from home or business owners who have upgraded to newer models. Used 250-watt solar panels can be purchased for as little as $115 online. You’ll need to weigh the reduced cost against the panels’ shorter lifespan and, in all likelihood, their lower efficiency rating compared to newer panels.
If solar panel performance is a bigger consideration than cost, and you’re willing to bide your time, it’s worth noting that leading-edge companies now produce panels with power ratings of over 700 watts and a lifespan of 30 years. For instance, this fall, manufacturer Akcome is introducing a panel rated for 730 watts.
The type of inverter you pick is another prime consideration. Inverters convert DC, or direct current (e.g., the energy source we typically use in batteries), to AC, or alternating current, which powers everything in our homes, from lights and appliances to electronics.
Andre Oelmann, a commercial electrician in Crystal Beach, Ont., who built an off-grid home a few years back, is a big proponent of using microinverters—with one unit assigned to each solar cell—versus string inverters, which tie one inverter to a block of solar cells (e.g., a block of eight or 16 cells, depending on the string inverter).
Oelmann chose to go with microinverters for his system despite their significantly higher cost (average of $1.25 per watt) compared to string inverters ($0.75 per watt). As he explains, “For me it has to do with such problems as shadows. If you have a tree that’s blocking the sun for one panel in a string of eight or 16 (panels), the rest of the string will shut down to the lowest amount (of energy being produced).”
Conversely, he says, if your system is composed of microinverters, the shadowing effect only affects the performance of the individual panels being shadowed while the remaining panels continue to operate at full capacity.
But getting back to cost: a string inverter tied to anywhere from eight to 16 panels might cost $3,000, and the equivalent microinverters could cost $5,000 to $6,000. However—and this potentially makes things confusing for buyers—Oelmann says there are smart solar panel optimizers that work in tandem with string inverters and essentially do the job of a microinverter. But then, not unlike microinverters, you need optimizers for every panel… so at the end of the day, cost-wise, the overall cost could be the same, and the solution you go with could ultimately come down to what your solar provider recommends.
Mind you, Oelmann isn’t your average solar PV consumer. In addition to the 20.1-kW system on his roof, he has four Tesla Powerwalls, each with a storage capacity of 13.5 kW, whereas the average home owner might be happy with just one. He also lives in a highly energy-efficient home that’s close to qualifying as a Passive House (an international building standard for energy-efficient architecture). Oelmann strongly feels that the government should mandate Passive House as a standard, “if it’s really serious about reducing Canada’s carbon footprint and fighting climate change.”
Yes, if you can afford it. In terms of backup battery solutions, not surprisingly, Tesla Powerwalls don’t come cheap. To have a single Powerwall installed in our home, I was given a ballpark price of $15,000 to $20,000—an amount that could easily double the cost of a solar system.
But, thankfully, there are lower-cost solutions out there. For instance, earlier this year, EcoFlow offered 3.6-kW batteries, enough to meet the daily energy needs of most homes, for $3,999, as well as a 7.2-kW version for $6,999. And you can continue to add batteries—the system is scalable up to 21.6 kW. However, regardless of the size of your system, you will need to get a transfer switch installed (approximately $465) to connect the batteries to your electrical panel, allowing you to choose what to power during an outage. (Note that solar system pricing is a moving target.)
So, is installing a solar PV system the right choice for your home? A logical starting point is to look closely at how much energy you use and what it costs per month, as well as how much it would cost to reduce energy loss in your home through such measures as adding insulation and sealing leaks. These can make a significant difference to your energy bill.
In terms of payback for any solar system, estimates for how long it takes to break even range from 10 to 15 years, or even longer if you have a relatively low electricity bill to begin with. So, be prepared to pay a potentially hefty upfront cost and then bide your time before seeing a return on your investment.
There is one other top-of-mind consideration: peace of mind. This past December, the area I live in was battered by a storm that knocked out power for over four days. Having gone through that experience and not wanting to go through it again, my wife and I feel the prospect of a solar system—or, at the very least, a battery backup solution—is quite appealing, purely from a quality-of-life standpoint. Because realistically, it’s not if another power outage will occur, but when. You can’t put a dollar value on being prepared when the lights go out.
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One correction to your article. Nearly everyone in Canada (unless they are off the grid of course) has a grid-tie system, with no battery back-up. Excess energy during the summer is sold to the local utility for a profit or credit. This then goes towards buying back from the grid during the winter when solar production is very low. This is how you reduce your electricity bill. With battery backup, you’re not selling to the grid. It’s extremely expensive and provides a very limited amount of backup energy. Based on the average kWh a Canadian uses, your $15000-$20000 Tesla Powerwall runs out in less than 24 hrs.
An interesting article. There are two issues you have not talked about. I was advised by my building contractor that I would have to up grade my roof to my house to deal with the added weight of the panels and to ensure the panels are not blown off in a wind storm. You also do not talk about the ability of the panels to resist hail storms which are a major issue in Alberta. You also do not talk about selling back surplus electricity to the grid system. I have heard mixed statements that electric companies will not accept solar panel home surplus electricity, and yet I have heard some electrical companies will buy surplus solar panel electricity. You also have not mentioned the fact that if you wish to have connection to the electrical grid you have to pay the connection fees to the electric grid. My research showed me I would not recover my initial costs to install solar panels and add extra support to my roof for 20 years, even with a grant.