Solar Energy

How Much Money Can You Save By Installing Solar Panels? Answers From Solar Contractors

Canada is experiencing a significant increase in solar panel installations due to the growing interest in renewable energy technologies. The projected growth rate for the solar energy market in Canada is 24.16% from 2023 to 2028, adding $3 billion to the market size. A solar power system is a smart investment for homes and businesses due to its long-term financial benefits and reduced carbon footprint.  But how much is the potential savings of a solar panel installation? This is when you need the help of experienced solar experts to fully explain how solar PV systems work and how much you can save after solar installation for accurate expectations from your solar power system. MAG Solar’s solar contractor helps analyze your location, solar irradiance, and the required system size for super-efficient and durable solar panels. 

Install Solar Panels to Maximize Your Savings

Upfront Expenses

Costs of Purchase and Installation

Based on size and complexity, a household solar panel system in Canada costs between C$10,000 and C$30,000 to buy and install. The average installed cost per watt is C$3–4. An average Canadian household would pay C$15,000–20,000 for a 5 kW system.

Government Grants & Subsidies

  • The Canadian government and provincial programs offer incentives to lower solar installation costs. 
  • The Canada Greener Homes Grant covers solar panels and other energy upgrades up to C$5,000. 
  • Other rebates and tax credits are available in Ontario and Metro Vancouver, BC (including other areas in British Columbia like the Lower Mainland, North Vancouver, Fraser Valley, and the Greater Vancouver area). 
  • Ontario’s Net Metering Program lets homeowners offset their electricity expenses by returning surplus solar energy to the grid (BC Hydro). British Columbia exempts solar panel purchases from PST.

Different Financing Options and How They Affect Total Cost

  • Finance alternatives like loans, leases, and power purchase agreements (PPAs) can dramatically affect solar panel system costs. 
  • Solar loans may have a 5-7% annual interest rate over 10-15 years. 
  • Leasing can lower upfront costs to almost zero, but monthly payments may balance the savings. 
  • Another financing option is PPAs, where homeowners pay a discounted rate as they generate electricity.

Overview of Potential Long-Term Savings

Benefit Details Financial Impact
Electricity Bill Reduction A 5kW system in Canada can generate 6,000 to 7,000 kWh annually. Covers 50-70% of a household’s energy demands. Saves C$780–910 per year (with the average Canadian electricity tariff at C$0.13 per kWh).
Protection from Rising Energy Costs The average annual electricity rate in Canada increases by 2.5%. Solar panel owners can avoid these hikes by generating their power. With C$800 yearly savings and a 2.5% annual electricity rate increase, total savings might approach C$30,000 over 25 years.
Energy Reselling to the Grid: Potential Income Many provinces offer metering systems. Selling electricity rates usually match retail rates. At C$0.13 per kWh, a 5kW system may sell back 1,500kWh to a household that uses 5,500kWh, earning C$195 per year. This can add up to over C$5,000 over 25 years.

What Affects Solar Panel Savings

Your Geographic Location

Environmental Factors and Sunlight Irradiation

  • Solar exposure varies widely across Canada due to its extensive geography. 
  • Southern provinces like Ontario, British Columbia, and Alberta receive more sunlight annually, averaging 4.5 to 5 kWh/m²/day. 
  • Local weather variables like precipitation and cloud cover can also affect solar power system efficiency.
  • Unmaintained and cleaned solar panels might temporarily lose effectiveness during winter snowfall.

Regional Incentives and Regulations

Province-specific incentives and laws affect solar panel installation profitability. BC offers similar net metering and PST exemptions on solar panel purchases. Alberta’s Residential & Commercial Solar Program rebates up to 30% of system costs.

Level of Energy Use

Energy Usage at Home

  • The household’s energy use patterns determine how well a solar panel installation reduces electricity prices. 
  • Solar panels assist homes with higher electricity usage. A 10,000kWh household saves more than a 5,000kWh one. 
  • High-daytime energy use households can use solar electricity more efficiently, minimizing grid dependence on BC Hydro.

Current Energy Efficiency

  • Before installing solar panels, check and enhance home energy efficiency. 
  • Upgrades like insulation, energy-efficient appliances, and LED lighting help save energy use. 
  • This increases solar panel system efficiency and ROI by lowering baseline energy consumption.

Solar Savings: What the Best Solar Panel Installers Have to Say

Cost-Benefit Analysis

To further understand the monetary advantages of solar panel installations, let’s examine examples from Winnipeg and Calgary.

Example 1: Winnipeg, Manitoba

  • System Size: 6kW
  • Initial Cost: C$18,000
  • Incentives:
    • Federal Canada Greener Homes Grant: C$5,000
    • Provincial Incentives: Varies, but usually around C$1,000
  • Net Cost After Incentives: C$12,000
  • Annual Energy Production: 6,500kWh (due to Winnipeg’s average solar irradiance of 4.2 kWh/m²/day)
  • Electricity Rate: C$0.095 per kWh
  • Annual Savings: 6,500 kWh * C$0.095/kWh = C$618
  • 25-Year Cumulative Savings: Assuming a 2.5% annual increase in electricity rates, total savings could exceed C$25,000

Example 2: Calgary, Alberta

  • System Size: 6kW
  • Initial Cost: C$18,000
  • Incentives:
    • Federal Canada Greener Homes Grant: C$5,000
    • Provincial Incentives: Alberta’s Residential and Commercial Solar Program provides rebates up to 30%, in this case approximately C$5,400
  • Net Cost After Incentives: C$7,600
  • Annual Energy Production: 7,200kWh (due to Calgary’s higher solar irradiance of 4.8 kWh/m²/day)
  • Electricity Rate: C$0.12 per kWh
  • Annual Savings: 7,200 kWh * C$0.12/kWh = C$864
  • 25-Year Cumulative Savings: Assuming a 2.5% annual increase in electricity rates, total savings could exceed C$35,000

More Examples for Specific Scenarios

Category Small Home in Winnipeg Large Home in Calgary Small Business in Winnipeg
House/Business Size 1,500 sq ft 3,000 sq ft 5,000 sq ft office building
System Size 4 kW 8 kW 20 kW
Initial Cost C$12,000 C$24,000 C$60,000
Net Cost After Incentives C$6,000 C$11,800 C$45,000
Annual Energy Production 4,500 kWh 9,600 kWh 24,000 kWh
Electricity Rate C$0.095 per kWh C$0.12 per kWh C$0.095 per kWh
Annual Savings C$428 C$1,152 C$2,280
Year 1 Net Cost C$6,000 C$11,800 C$45,000
Year 10 Savings Accumulated C$5,400 (approx.) C$13,700 (approx.) C$27,800 (approx.)
25-Year Cumulative Savings C$14,500 (approx.) C$48,000 (approx.) C$77,000 (approx.)

Ways to Optimize Your Savings

  1. Self-Evaluation. The US National Renewable Energy Laboratory offers PVWatts, an online solar calculator for making your initial assessment. You can also seek help from the Canadian Solar Industries Association or the BC Sustainable Energy Association.
  2. Adjust Panel Position. To maximize Vancouver solar power, panels must be angled and oriented correctly. Canada has a south-facing orientation with a latitude-dependent tilt angle.
  3. Use Net Metering. Use net metering systems to offset electricity expenses by sending extra solar energy to the grid to lower utility bills.
  4. Upgrades to Energy Efficiency. Install solar panels with energy-efficient appliances and insulation to reduce energy usage and increase savings.
  5. System Performance Monitoring. Use real-time monitoring devices to track energy generation and identify performance faults.

Get The Most Out of Solar Energy Today

Solar panel installation benefits both residential and business properties. It can lower electricity bills, safeguard against rising energy costs, and create revenue through net metering systems. Using a solar energy system is a huge step towards a more sustainable future and one of the practical solutions for a good financial move. Consult with professional solar panel installers to maximize solar energy savings and benefits. MAG Solar provides customized estimates based on your energy needs, location, and budget. Explore your options and use incentives to decide to optimize financial and environmental gains for your Vancouver renewable energy installations.

Frequently Asked Questions

The Vancouver solar panel system’s kW rating must match your household’s energy needs and roof space to maximize possible savings. A 10kW system produces 12,000–14,000kWh per year, suited for a high-consumption family. A 5kW system produces 6,000–7,000 kWh at typical usage.

  1. Solar panel system performance and durability depend on installation quality. 
  2. Professional installation from solar installers optimizes panel orientation, wiring, and mounting to maximize energy production and minimize losses. 
  3. The type and quality of renewable energy systems also affect system efficiency and longevity. 
  • Monocrystalline: These panels cost more but perform better due to their 15-20% efficiency and 25-30-year lifespan.
  • Polycrystalline: Although less efficient (13-16%), polycrystalline panels are cheaper.
  • Most solar PV systems have a 25-year performance warranty, but many last 30 years or more. 
  • Performance deterioration occurs about 0.5% to 1% each year for solar PV panels. 
  • After 25 years, a solar array may run at 80-90% efficiency. 
  • Vancouver solar panel systems that initially produced 300 watts may provide 240–270 watts after 25 years. 
  • Maintenance and repairs can delay performance decline and maximize energy output throughout panel life.

The payback period is the time it takes for electricity bill savings to match the investment cost. In Canada, the payback period for a residential solar power system varies from 7 to 12 years, depending on local electricity costs, system size, and subsidies.