Sunshine, lollipops and rainbows,
Everything that’s wonderful is sure to come your way!
Sung by Leslie Gore – 1963
The summer solstice brought the formal announcement of an Alberta government rebate program to install solar panels on residential homes and commercial buildings. Homeowners can receive up to 30 per cent off solar panel installation costs up to $10,000.
- But solar is complicated…. a house should have south facing slopes, little or no shade from trees, and snow reduces performance as does soot and bird droppings.
- The economics are difficult to assess because there are lots of variables. An average system is likely going to cost about $18,000 to install to make enough power for an average home.
- With a 30% subsidy the payback period is roughly 8 to 15 years. If energy prices continue to stay low, a homeowner will see a longer time to break even. The homeowner will still pay distribution and transmission and other charges for the conventional system. And perhaps solar panels increase the value of the home.
From a public policy perspective it is hard to get enthusiastic about this plan:
- The Alberta government will use Carbon Tax funds – de facto taxing one form of energy producer (i.e. coal) to subsidize and catalyze the more expensive solar option.
- The cost of the program is $36 million over two years. The outcome is expected to be an increment of 50 megawatts. When you consider Alberta’s installed capacity is nearly 14,000 megawatts (40% coal 40% natural gas) a shift of .04 of one percent isn’t much of an outcome. But perhaps it is good retail politics.
- Severely Normal Albertans should look this gift horse over very closely. The feasibility of solar electricity is very location specific, maintenance is required and the return on investment (even with the subsidy) is challenged.
- As public policy the funding will have a negligible affect on the electric energy profile in Alberta, but maybe it will make you feel good.