Return On Investment

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Return On Investment

Buying a New Car vs. buying a Renewable Energy System.

It's really up to you how you spend your money	Brand New Vehicle (example: crossover utility vehicle)	Renewable Energy System ( 4.3 kW Rooftop Solar PV, Batteryless, Grid Tie )
Initial Expense	$40,000 + options, surcharges and HST	$21,600 (or less) installed + HST
Warranty	5 - 10 Years	10 - 25 Years
Annual Operating Costs	$10,000 Insurance, Fuel , Repairs, Finance Charges, Licensing, Depreciation (source…CAA)	ZERO!
Bottom Line After 10 Years!	You've spent approximately $140,000 and are left with this!	You've received over $30,000 in Feed-In Tariff dollars plus the system could be paid off early from an immediate 10% increase in property value.* See detailed calculations below

* An Increase in Property Resale Value occurs in homes with solar electric systems because these systems decrease utility operating costs. According to a 1998 US Appraisal Journal article by Rick Nevin and Gregory Watson, a home’s value increases $20,000 for every $1,000 reduction in annual operating costs from energy efficiency.

How will the new microFIT program benefit me?

Sample Calculation 1

$21,600 installed fixed sloped roof residential 4.3 kW rated Grid Tie Solar PV system based on an annual average of 1200 kWh/kW of solar PV (source: RETScreen; Natural Resources Canada);

1. 4.3 kW x .9 (10% de-rate factor)* = 3.9 kW
2. 3.9 kW x 1200 kWh/kW = 4,680 kWh/yr.
3. 4,680 kWh/yr. x 65 cents/kWh** = $3,042 annual income ($253.50 average per month).

Return On Investment (ROI) and Payback;

1. $21,600 investment / $3,042 annual income = 7.1 years Payback !
2. $3,042 / $21,600 = 0.14 or 14% ROI !
3. Installed system cost: $5.00 per watt + HST (Can be less depending on market prices).
4. Net Present Value (NPV) at the completion of the 20 year microFIT contract: $36,432 equity.

Sample Calculation 2

$74,900 installed dual tracker system 11.75 kW*** rated Grid Tie Solar PV system based on an annual average of 1680 kWh/kW of solar PV (Source: RETScreen; Natural Resources Canada);

1. 11.75 kW x .9 (10% de-rate factor)* = 10.6 kW
2. 10.6 kW x 1680 kWh = 17,808 kWh per year
3. 17,808 kWh/yr. x 59.4 cents/kWh** = $10,577.95 annual income ($881.50 average per month).

Return On Investment (ROI) and Payback;

1. $74,900 investment / $10,577.95 annual income = 7.08 years Payback !
2. $10,577.95 / $74,900 = 0.14 or 14% ROI !
3. Installed system cost: $6.37 per watt + HST (Can be less depending on market prices).
4. Net Present Value (NPV) at the completion of the 20 year microFIT contract: $127,374 equity.

* De-rate factor compensates for system inefficiencies, non peak operation and module degradation.

** Estimated rooftop and ground mount microFIT incentive rates for 2012.

*** Solar array size with inverter nameplate rating of 10 kW for MicroFIT eligibility.

Please note: We are not representing ourselves as accountants or investment analysts. This calculation is a conservative estimate and actual figures will vary depending on size and type of system. Other contributing factors will determine exact ROI and payback results. All figures used in these calculations are based on current rates and costs not including tax. However, we strongly suggest that you personally consult with a certified accountant, investment representative or tax specialist of your choosing to get a detailed analysis on your own rate of return.

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