Will Trudeau transform Canada into a green energy superpower?

[Peter_M]

Yep the second is what I'm referring to. They thought the Chinese govt was helping out panel makers in China too much resulting in dumping charges in NA and have set big tariffs that essentially banned some manufactures. It's a fine line, what if China feels state or federal EV initiatives or subsidies for Tesla's or other product is too generous.

Yeah, I'm not really sure what to think about this. I generally prefer free trade and let the market decide, but there are limits if a government is not playing fair, and there are cases where government policy influencing behaviour through taxes or incentives is the right thing to do. One rather odd outcome from this is that even Canadian Solar's panels manufactured in China are subject to a 174.2% tariff, but they have a plant at their headquarters in Guelph too, so Canadian purchasers can buy the ones made there.

 

[sitter_k]

Yeah, I'm not really sure what to think about this. I generally prefer free trade and let the market decide, but there are limits if a government is not playing fair, and there are cases where government policy influencing behaviour through taxes or incentives is the right thing to do. One rather odd outcome from this is that even Canadian Solar's panels manufactured in China are subject to a 174.2% tariff, but they have a plant at their headquarters in Guelph too, so Canadian purchasers can buy the ones made there.

My understanding is that you have to be a true environmentalist these days to go forward with a Micro FIT install these days. It's a bit of a perfect storm. Low cost Chinese panels are banned, so prices go up. Canadian Dollar has gone down compared to the USD, so materials and cost of American competitors goes up. Rates that you can sell your solar energy are still going down as always.

Someone correct me if I'm wrong.

 

[Peter_M]

My understanding is that you have to be a true environmentalist these days to go forward with a Micro FIT install these days. It's a bit of a perfect storm. Low cost Chinese panels are banned, so prices go up. Canadian Dollar has gone down compared to the USD, so materials and cost of American competitors goes up. Rates that you can sell your solar energy are still going down as always.

Someone correct me if I'm wrong.

I'm not sure that overall system prices have gone up, but they are dropping more slowly. And the FIT/MicroFIT rates have dropped much closer to market rates. But even at market rates, every kWh your system generates is money in the bank, so eventually the system will pay for itself. The payback period under MicroFIT for the past several years has been more or less constant around 6-8 years, since the system costs have come down along with the FIT rates. (Actually, it's the other way around: the government intentionally set the FIT rates to make the payback period stay constant as the system costs dropped.)

I looked at one project that had a 6.5-year payback period and an Internal Rate of Return of 14.1% at the 39.6 cents/kWh rate. If I leave the system cost the same (it would likely be less now), and using the new MicroFIT rate of 29.4 cents, I get a payback period of 8.75 years, out of the 20-year contract, and an IRR of 9.2%. So it's not as attractive, but still a good investment.

 

[wayner]

My understanding is that you have to be a true environmentalist these days to go forward with a Micro FIT install these days. It's a bit of a perfect storm. Low cost Chinese panels are banned, so prices go up. Canadian Dollar has gone down compared to the USD, so materials and cost of American competitors goes up. Rates that you can sell your solar energy are still going down as always.

Someone correct me if I'm wrong.

I did my installation this past summer. My initial cost was $31.8k. Annual revenue is projected at $4.6k. So that is around a seven year payback not allowing for the time value of money. The actual after tax IRR is a little trickier to calculate as it depends on your tax rate, financing costs (if any), etc. The CCA rate on the panels is 50% so that negates any taxable income for the first several years. But higher marginal tax rates will also make it less compelling.

 

[mknox]

The Ontario Feed In Tariff program was always meant to be a transitional program until solar costs got closer to grid parity. I think we'll see the program end soon, and we'll be left with simple net metering for these installations.