Alberta Solar Panel Cost Savings: Ultimate Guide
October 26, 2024
Solar
Solar
As living costs keep going up, many people in Alberta are looking for ways to cut back on expenses. Using solar energy provides a great option because it makes use of a resource that is always available in Alberta: sunlight. In our experience, Albertan's our practical people - and are primarily interested in solar energy based on the potential for cost savings and long-term value addition to their homes. Often people ask, "Does solar really save you money", "How does solar affect my admin, distribution and transmission costs" and other specific questions. We want to help our customer's build a genuine understand of the financial aspects of solar panel ownership, through detailing a few ways that solar specifically reduces electricity costs in Alberta. This guide will show you how solar panels can help you save money, clear up common myths, and explain the benefits of using solar energy in Alberta.
Solar panels produce electricity when exposed to direct sunlight. However, the DC electricity from the solar panels can't be used in homes right away. An inverter is needed to change DC electricity into alternating current (AC) power. We typically install microinverters from brands like Enphase and APSystems. We have also installed other inverter brands like SolarEdge and Fronius. This AC electricity powers your home and helps you buy less electricity from the grid. If your solar panels make more energy than you need, that extra power can often go back into the grid. This can earn you credits towards your energy bill, or even cash allotments which can be paid out monthly, quarterly, or yearly depending on your energy retailer.
Alberta gets a lot of sunshine, even though it's in the north. This makes it a great place for solar energy production. With its strong solar potential, money-saving rewards, and improved technology, solar energy is a great and smart choice for homeowners.
Alberta has cold winters, but it still has a lot of solar energy potential. This is because summer days are long and the skies are usually clear all year. The southern and central parts of Alberta like Edmonton, Calgary, and Lethbridge still receive a lot of solar irradiance. Additionally, due to our climate - Alberta is known to have the most sunny days of any Canadian province. This results in higher annual solar production in Alberta, compared to places where rain and cloud cover are more prevalent (Vancouver, Victoria). For example, Calgary receives more than 333 days of sunlight per year1 vs Vancouver with 289 sunny days2.
Even when there is snow, modern solar panels can handle tough weather. Snow often slides off the panels, and is typically the first area on the roof to be dry and clear. More-over, the snow on the panels is generally in the lowest producing months of January and February, which has a very small impact on the annual energy produced. Competent solar designers will factor annual snow-losses into the design calculations which ensures that annual production is accurate. Most home-owners question, how much production is lost annually from snow? This has been answered by a study conducted by students at NAIT. The study analyzed the effects of snow on solar panel production in Edmonton at various roof pitches3. The results of the study determined that solar production loss was between 1-5% depending on the roof pitch! Using the results of this study, we add additional solar panels to our designs to mitigate these effects. Snow often slips away, and has minimal impact on annual solar production.
By installing solar panels, you can lower the amount of electricity you purchase from your utility retailer. Solar power generation helps replace the electricity that comes from the grid. This means you buy less power from the utility company. With solar panels making electricity for your home, you not only save money on your electric bills but also rely less on regular utility sources. Choosing solar energy is good for the planet and can save you money in the long run since you depend less on the traditional electricity grid. Moving to solar power is a step towards living sustainably and supporting a greener future for Alberta.
Solar panels help lower electricity costs by using less electricity from the grid. This means you can enjoy lower electricity bills, fewer distribution costs, and less in transmission fees. Home-owners often ask, "How does solar reduce the distribution and transmission fees? Aren't those fixed, and I'd have to pay them anyways?". The truth is that distribution and transmission fees may appear as a separate line item on your electricity bill, however they have a major variable component which is impacted by the amount of electricity used. Purchasing less electricity, reduces distribution and transmission costs. However, some fees are simply fixed - and using less will not impact the amount you pay for specific fees like "Administrative", or "paperless billing", etc.
Let's consider an example to illustrate the potential cost savings. Assuming your average monthly electricity usage before solar is 1,000 kWh, and your new solar system is designed to produce 1,000 kWh of solar electricity/month. Let's say 60% of the energy is used in the home (Reducing the amount needed from the grid), and 40% is sold back to the grid.
As shown in the table, installing solar panels can lead to substantial annual savings on your electricity bill. In this example, the customer reduced their electricity expenses by 73%. HOWEVER, this number is low - because it does not consider than solar club rates can be utilized in the summer months to improve the financial return of the solar system. It also does not consider than in many months, electricity produced by the system will be higher than the total consumed by the household. Excess energy sold at attractive solar club rates will improve the return substantially.
In Alberta, you can do more than just use less electricity by producing solar energy at home. There is a program called Solar-Club which provides solar energy producers an option to sell energy at different electricity rates depending on the time of year. This program is a great option for home-owners who produce more than 80% of their annual electricity consumption.
Solar Club is a program from electricity retailers which provides home owners with two different electricity rates. The two rates offered are a "high-rate" and a "low-rate". The high-rate is typically about $0.30/kWh, and the low-rate typically about $0.08-$0.11/kWh. Why would anyone voluntarily choose the high rate? ($0.30/kWh) - This rate is advantageous for solar energy producers during the summer months between April - October in Alberta. Typically, systems will "over-produce" during these months which results in more energy being sold to the grid, than consumed by the home-owner. For example, in July a home-owner may use 1,000 kWh, but their system could produce 2,000 kWh of energy due to the long summer days. Because the home-owner is selling more energy to the grid, they will make more money by choosing the high rate.
In the above example, the home-owner had a July credit of $190! This credit can be used against future electricity bills, or paid out from the energy retailer. Many home-owners choose to keep the credit with the retailer to reduce their electricity bills during winter months.
The best time to switch to Solar Club rates depends on how much energy you use and the details of the program from your retailer. It is important to check your energy needs and understand how the rates work. Generally speaking, most people choose to switch rates when their solar systems begin to produce less energy than they are consuming. If you're producing less energy than you consume (usually in the winter months) than the low-rate is typically recommended. If you're producing more energy than you consume (usually summer months) a high-rate is typically recommended.
In the above example, the customer should utilize the high energy rate until early October, when they begin to produce less than they consume. They would be best to stay on the low-rate until Early April, when the solar system begins producing more electricity than they consume.
The upfront cost of installing solar panels can be cost prohibitive for some homeowners. But programs like the Canada Greener Homes Loan help make solar energy easier to access for home-owners by providing $40,000 in funding for home energy efficiency retrofits. This program allows you to pay for your solar panel system over time. Your monthly payments can often be less than your usual electricity bill which makes solar energy more accessible for Canadians.
The Canada Greener Homes Loan is a program sponsored by the Federal Government. It helps Canadians pay for energy-efficient home upgrades, like installing solar panels, attic insulation, or heat pumps. This loan gives you up to $40,000 to complete these upgrades without any interest. You can pay it back over 10 years, which helps homeowners who want to use renewable energy. To get the Greener Homes Loan, homeowners must have a home energy assessment done by a certified energy advisor (we recommend Energuy). This energy auditor will suggest upgrades that qualify for the loan. After you are approved, you can use the loan to pay for your home energy upgrades.
Let's show how a Greener Homes Loan can save you money using an example. Imagine you put in a solar panel system that costs $20,000. If you choose the 10-year repayment plan, your monthly payment will be $166.67/month. Now, think about your current monthly electricity bill being $200. With the solar panels installed efficiently, and the use of solar club incentives your new average bill may be closer to $20.00/month. $20.00 + $166.67 = $186.67 new monthly expense, however $166.67 is going directly to building equity in your solar system.
Each month, when you pay your Greener Homes Loan, you are building equity in your solar system. This is different from renting or leasing solar panels because, with this loan, you will eventually own the system fully. As you make these payments, you reduce the principal amount of the loan. This means you gain more ownership of the solar system. Owning it provides long-term benefits of solar energy and increases the value of your property. Once you finish repaying the loan, you own a valuable asset—a fully paid solar energy system. This system is designed to produce solar energy for more than 25 years!
Many people are starting to consider solar energy in Alberta, but misunderstandings can sometimes hide its benefits. These misunderstandings can come from old information or not fully understanding how solar technologies have improved. They can also result from information about solar in other markets like BC, or California where the incentives are less attractive for solar energy.
It's important to address these worries and clear up common myths. By sharing true information and showing how modern solar systems work, we can help homeowners make smart choices about using renewable energy.
One common myth about solar panels is that they are too expensive and only for wealthy homeowners. In reality, prices for solar installations have decreased substantially in the last 5 years. There are also government incentives and financing options like the Greener Homes Loan. This makes solar energy affordable for many people.
Solar panels work 12-months of the year in Alberta! It's true that the winter months, generally result in less energy production. However, panels will still produce energy when the sun is shining. Snow can impact solar production, but generally melts within a couple of weeks. Annually snow-losses are estimated at less than 5% of annual production, and are factored into the design of the systems resulting in slightly more panels added to the design to compensate.
Batteries are not required for residential solar systems in Alberta. 99% of the systems installed by Evalence in 2024, did not contain any batteries. In Alberta excess energy can be sold to the grid for attractive rates, so batteries often do not make financial sense for grid connected systems.
The Provincial Government has made headlines recently for their restrictive policy changes impacting utility scale solar energy projects. They have received backlash in the media for these policies and created confusion for home-owners who are considering solar energy for their properties. In reality, none of the changes have impacted individual home-owners from installing solar energy on their properties. Residential solar production is governed under the Alberta Micro-Generation Regulation. This regulation creates rules for utility providers and home-owners which has actually incentivized residential solar installation. For example, in Alberta home-owners can sell energy at the same price charged by energy retailers. This is attractive compared to other markets where selling solar energy is often only allowed at lower, less attractive rates.
In conclusion, knowing the financial benefits of solar panels in Alberta can help you save money over time and lower your carbon footprint. When you use solar energy, you reduce your need for the grid and might even make money with solar club rates. Plus, with options like 0% financing from the Greener Homes Loan, it’s easier to switch to solar power. This offers a smart way to meet your energy needs sustainably. By clearing up myths and looking into better methods, you can increase the value you get from your solar panel system. Using solar energy helps your finances and has a good impact on the environment. It's also part of Alberta’s move toward a greener future.
