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  • Writer's pictureVladimir Grebenyuk

Invest Now, Save Sooner

Investing in your clean energy now will help you to save on your energy bills sooner.

Do you know that investing in the onsite renewable energy generation - #solar and or #heatpump - will pay you back in just a few years?

Lets consider solar PV. Solar photovoltaic (PV) modules, often called “solar panels”, are comprised of a number of cells, made primarily from silicon. They generate electrical charge when photons of sun radiation hit them – a phenomenon known as the photovoltaic effect.

Solar PV modules have become less expensive than ever before, thanks to the increased demand driving economies of scale. Today’s modules are about half of what they cost in 2008. On an average solar system, the solar modules themselves comprise only about 15 percent of the total cost per watt or about $0.45 per watt. This cost does not include other components as well as the cost of installation .

Other components include inverter to convert direct current (DC) generated by the PV modules into alternate current (AC) used by most electrical devices, wiring, control and many other.

The cost of your inverter depends on its type. There are two main types of inverters. Though both convert DC electricity to usable AC electricity, they do it somewhat differently. String inverters are standard and cost about $0.13 per watt. The other type of inverter, the microinverter, is more efficient but also more expensive; they typically cost $0.34 per watt.

Once you have your solar modules, you’ll need to mount them. Racking will keep your solar array secured against wind and snow load. An optimal orientation depends on your geographical location, obstacles and possibly on your energy demand profile. Racking (or “mounting”) can add about $0.11-0.12 per watt to the overall system cost.

A variety of electrical components also raise the cost of your solar system. These components -including conductors, combiners, transition boxes, switches, monitoring systems, fuses, conduits, and so on - are all priced somewhat differently, and the amount you’ll need to spend depends also upon the inverter you’re installing. You may expect to pay $0.20 to $0.33 per watt for these.

In addition to the necessary hardware, a solar system’s price also includes a number of non-equipment “soft costs.” Installers, for instance, charge anywhere from $20 to $25 per hour. Electrician who would connect your system to the grid, would charge $25-30 per hour. And then there are permit costs.

The average total cost of the installed grid-tied solar PV system in Canada is about $3.05 per Watt. The cost of the off-grid system will be substantially higher since it would include sufficient energy storage (batteries) and appropriate control.

While the cost of PV modules has gone down in the recent years, the economy of scale has reached its maximum. It is not realistic to expect further noticeable decrease in prices. Furthermore, as noted above, the cost of the modules is only a fraction of the overall cost. The cost of other components is likely to stay and possibly can increase due to the improvements in efficiency. The cost of labour is definitely going to increase as there is obvious factor such as inflation.

Finally, and perhaps, most importantly, the rate of electricity is going to increase each year. The energy demand is increasing, necessitating building new power plants such as BC Hydro Site C. With a wind farm, the cost increase would be even higher. The infrastructure needs upgrading. All these will be reflected in future rates.

Thus the earlier you invest in your solar or other on-site energy system, the sooner you start saving on the energy you do not need to buy, the more benefit you will get at the end of the day.

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