Rooftop solar panels can take Canadian homeowners as long as 30 years to pay for themselves, with a federal government report concluding there is a “limited” economic case for widespread residential installations across most of the country.An internal Department of Natural Resources memo to Minister Tim Hodgson said high installation costs, relatively inexpensive electricity and Canadian labour costs make residential solar less attractive than in countries such as Australia.“At present the economic case for widespread residential rooftop solar photovoltaic installations in most jurisdictions across Canada is limited compared to other international jurisdictions,” said the May 20 Memorandum To The Minister.“Economic decisions to install are largely driven by ability to recoup costs. Generally the modeled period for rooftop solar is between 10 and 30 years.”Blacklock's Reporter said the memo, obtained through Access To Information, said homeowners can face costs ranging from $10,000 to $45,000 to install solar systems.“For many Canadians, installing rooftop solar panels represents a significant upfront cost that is recouped slowly over time through reduced electricity bills or financial compensation from utilities,” the department said.“As a result, the pool of Canadians able to pursue these projects is currently limited largely to financially secure homeowners who can absorb upfront costs, often in the thousands of dollars, and manage associated debt servicing costs which can range from $10,000 to $45,000.”The department said government financial assistance can shorten the time required for homeowners to recover their money.A federal Greener Homes Program launched in 2020 offered grants of $5,000 but saw only 38,500 homeowners nationwide install solar panels, according to the memo.“Additional financial supports can improve payback periods,” said the department.“The business case for rooftop solar in Canada is less competitive compared to leading jurisdictions such as Australia primarily due to Canada’s relatively low electricity rates and comparatively high labour costs for installation.”.Natural Resources officials cautioned that the homeowner’s financial return is not the only consideration when assessing residential solar.Governments and utilities may subsidize solar installations because they can potentially reduce demand for large-scale electricity infrastructure and provide other benefits to power grids.However, the department acknowledged calculating those benefits is difficult.“However this valuation is highly context specific and difficult to extrapolate,” said the memo.The findings echo a 2021 Natural Resources report that concluded numerous renewable energy projects would not have been financially viable without government subsidies.“The program clearly addresses a market failure,” said the department’s Impact Evaluation Of The Renewable Energy Deployment Program. “Most projects would not have been financially viable.”The $1.5 billion Renewable Energy Deployment Program provided subsidies of one cent per kilowatt hour for electricity generated by solar panels, wind farms, geothermal facilities and other renewable energy projects.“None of the projects generated sufficient market revenues to be profitable without the Renewable Energy Deployment funding,” said the report.“The majority of the supported projects generated sufficient revenues to attain small surpluses with which they could pay off some of their capital costs.”
