Why solar panels make sense in the sunny Okanagan
Many people are aware of the hot, sunny days in Kelowna making the city and the region a great place for solar power. Yet, there’s another less well known reason why Kelowna and the Okanagan Valley is one of the best places for solar in BC.
Why Solar in Kelowna?
Fortis BC has some of the highest electricity rates in the province. Over the last decade, electricity rates have increased on average 5.5% per year. Given the need to maintain the current electricity infrastructure and the cost of new generation, electricity prices will continue to rise.
Adding to this, Fortis BC bills its residential electric customers on a 2-tier rate. The first 1,600 kWh you use every two months is billed at 10 cents per kilowatt hour. Any electricity consumed above this amount is billed at a higher rate of more than 15 cents per kilowatt hour (50% more), making electricity costly.
Many homes find themselves in Tier 2 during the summer when running air conditioning. Homes that use electric base-board heating face the challenge of even larger electricity bills in the winter.
We hear from many home owners that despite the best intentions and focus on energy efficiency, they experience Tier 2 rates all year long.
It’s in these situations where solar could benefit your home.
Trim Tier 2 Pricing
Solar electricity lowers the amount of power you would need to draw from Tier 2. For example, if you have high electricity bills in the summer as a result of air conditioning, a solar system can offset these additional costs.
Depending on your needs and budget, it’s possible to offset all of your power in the summer and a sizeable portion in the winter.
In all situations, home solar shaves off your most expensive power first.
Lock in Low Electricity Prices
Imagine what the cost of electricity will be in 2025? A home solar system can provide you with the security of low energy prices for the long-term. That’s because aside from the upfront cost of the system, you are now able to produce free energy for 25-30 years, and even longer.
If you were to amortize the cost of a solar power system over its 25-30 year lifespan you would be paying approximately 10 cents per kilowatt hour, which is the lowest price we currently pay for the grid. This means you can lock energy prices at today’s lowest rate for decades to come.
Because most home owners fall into Tier 2 pricing, a solar system typically provides a healthy return on investment.
A typical system payback is between 10 to 15 years. Over 25 years, an Internal Rate of Return between 3.5% and 7.5% is possible and even greater over a longer period.
When compared with historical returns on investment over 20 years of Canadian Government Bonds, 4.5% and S&P/TSX Composite 7.6%, solar panels are attractive as a reliable, tax free, low risk investment. This excludes the retained value of the system.
What other household upgrade pays you and adds value to the house over the long-term?
Does Solar Make Sense for You
Solar offers a lot of benefits, from reducing your environmental footprint to raising the value of your home and decreasing energy costs.
When considering solar it’s worth exploring what you currently pay for electricity, and when you consume the most energy. We encourage you to check out our electricity calculator and see what you’ll end up paying over the next 25 years (based on an annual increase of 4%).
You also need to have a roof that’s suitable for solar. South facing, or a variation of South is ideal; sloped or flat are some of other the factors that need to be considered. The roof must also be in good repair; both structurally and the roofing material should have adequate life left on it. Remember, solar lasts a long time!
To learn more about home solar power systems, visit our Residential Solar page.
Terratek Energy is hosting a solar informational session for Kelowna residents, Aug. 12. To learn more, click here.