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Ontario’s Feed–In Tariff Explained

Ontario residents can benefit from a new government program which allows home and business owners to generate income from solar systems on their roofs or mounted in their yards. The program pays for 20 years, while the life of a solar system can be much longer – 30 years. Effectively, solar systems can act like a GIC, with fairly predictable income over its life, and a rate of return from 7 to 10%.

Q & A

What is the Feed-In Tariff?

Ontario’s Green Energy Act includes a program to pay home and business owners up to $0.80 per kilowatt hour of electricity produced by a solar electric system. The province will enter into a 20 year contract with people who install up to a 10 kilowatt solar system at this rate.

Why a Feed-In Tariff?

The province of Ontario wants renewable energy to be part of its future. It believes solar energy is one technology that can deliver clean energy directly to consumers. Although solar electricity is expensive today, the province is introducing this program to help consumers put solar energy to work, with the goal of lowering costs and growing an industry that is ready to become mainstream.

Who is eligible?

Any person or business can install a solar electric system on their roof and participate in this program. Ideally a home would have a south facing roof slope that receives direct sun during the day. Solar systems require about 100 square feet of area per kilowatt, and at least 2 kilowatts of solar panels are needed to offer a good rate of return.

How much does solar cost and what income will it generate as part of the Feed-In Tariff?

Solar systems can be installed on a home for about $9,000 to $12,000 per kilowatt. The range depends on the roof, the efficiency of the solar panels and the overall size of the system – larger systems are cheaper per kilowatt than smaller ones.

On an unshaded south facing roof, each kilowatt of solar installed can generate between 1000 and 1300 kilowatt hours, or $800 to $1100 per annum. A ten kilowatt system, costing about $100,000 could generate as much as $12,000 per year. This equates to a Return on Investment of 10%.

How long do they last?

Solar electric panels like those made by Sharp Solar have a 25 year power output warranty. They commonly last many years more than that. The system will likely continue to produce electricity long after the 20 year Feed-In Tariff contract has run out.

How do I know what my system is producing?

The inverter has a display that shows the cumulative energy produced by the solar array. All participants in the FIT program must install a second utility meter that logs and records the kilowatt-hours of energy produced by the solar system, and your utility will send you a cheque each billing period.

For more information about Solar Installations, contact Captain Electric Today