Here’s how a solar system works in Ontario

There are two distinct ways to get started with a solar panel installation — net metering  and microFIT. One option brings you significant savings on your energy bill, every year, and the other brings you a guaranteed 20-year income stream.

Either way, you and the community come out on top.

Net metering: take $1,000–4,000 off your hydro bill every year

Generate clean solar energy and spin your hydro meter backwards

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net metering sun panels

the sun energizes your solar panels

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net metering inverter AC DC

energy is inverted for grid use (DC to AC)

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net metering grid credit

your solar energy is metered and credited back to you

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net metering community

you save $, the community grows more sustainable

The power produced by your net metering solar system can be used directly in your home. When you are producing more power than you need in your home, the excess power is sent to the energy grid, and used by your neighbours. And at the same time that you are powering the grid, you are earning credits with your hydro company that will be subtracted from your bill at the end of the month.

 

Your new hydro bill

Your new bill is simply the difference between what you use and what you generate, plus any of your hydro company’s fixed charges such as delivery.

By generating your own solar power, you save in two ways:

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Power your home and slash your grid-energy consumption

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Earn credits for any and all excess power by feeding it into the grid

The magic of net metering is that your solar system generates more value each year than it did the year before.

To understand this concept, we need to understand the current and future cost of electricity.

The cost of electricity has been rising steadily over the last 10 years (source). And on May 1, hydro rates took another hike. From data in the Province’s most recent Long-Term Energy Plan (source), we project energy prices to rise by an average of 3.5% annually over the next 10 years. To illustrate what this looks like, here is a chart of historical and projected on-peak energy rates:

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on-peak hydro prices

A real-life scenario

To illustrate the concept of net metering, let’s consider a scenario where you install an average-sized 10 kW net metering solar system on your roof (that’s about 37 solar panels).

Let’s say that on average, once fixed costs such as delivery are factored in, you are currently paying 21¢ for each kilowatt-hour (kWh) of electricity. Let’s also imagine that you put a solar system on your home, and that your solar system offsets 18¢ of your monthly bill for each kWh that it produces, once those miscellaneous hydro fees are accounted for. That means that today, each kWh of energy that your solar system produces is worth 18¢.

Month 1

In your first month, you produce 1,067 kWh of solar power, which you use to power your home. Any excess power is sent into the grid for your neighbours to use. For any and all power you supply to the grid, your hydro company places a credit on your bill. Your savings can be approximated by multiplying your solar energy production (1,067 kWh) by the amount your solar system offsets (18¢/kWh), to get $181.

Over the course of the year, you save $2,303.

Depending on the size of the solar system and current energy usage, we find that our customers save between $1,000 and $4,000 in their first year.

Fast forward 10 years. This is where it gets even better.

Using data from the Province’s latest Long Term Energy Plan to assume a 3.5% annual growth in energy prices, your solar system now offsets 25.4¢ for each kWh it produces. Your solar system is producing 1,014 kWh of energy each month, just slightly less than previously, as the panels lose a small amount of efficiency over time.

Your monthly savings have now grown to $257 (1,014 kWh × 25.4¢/kWh), for a total of $3,090 that year.

Finally, imagine 25 years from now.

Hydro costs have continued to climb so that your solar system now offsets 41.1¢ per kWh. The solar system still produces 946 kWh of power each month. But your monthly savings have rocketed to $388 (946 kWh × 41.1¢/kWh), saving you a whopping $4,664 that year.

Over these 25 years, you saved a grand total of $83,806.13 and your solar system is set to continue producing clean power for years to come.

Add a battery

With a net metering system, you are already using your own clean energy in your home. With a battery, you can store any excess power rather than sending it into the energy grid. This way, during a power outage you can keep your freezer cold, your stove hot, and make even more effective use of the solar energy you produce.

You don’t have to buy a battery right now either—you can add it to your solar system at any time in the future.

microFIT: a 20-year passive income stream

Generate energy from the sun and sell it at a guaranteed price

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screenshot

the sun energizes your panels

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screenshot

energy is inverted and metered

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screenshot

you earn $ on all energy generated

The microFIT Program was launched in 2009 as part of the Ontario government’s efforts to increase renewable energy in the province. The program provides homeowners and other eligible participants including farmers with the opportunity to develop a small or “micro” solar panel installation (10 kW or less in size) on their property. Under this program, you are paid a guaranteed price over a 20-year term for all the electricity you produce and deliver to the Province’s electricity grid. You will join 1,000s of Ontario residents who are already part of the microFIT Program and contributing to a cleaner environment.

It’s really that simple.

You can read more on the microFIT program at the microFIT website.

net metering + microFIT

In Ontario, net metering systems can be installed on properties alongside a microFIT or FIT contract (see below). This allows you to take maximum advantage of Ontario’s existing solar programs. Meaning you realize cost savings on your energy bill while at the same time getting a monthly cheque for the excess power produced through your microFIT contract.

How does more $ in your pocket sound?