Should I be excited about the Ontario Solar rebates? New rebates for solar and batteries sound good, but is this a good deal for Ontario consumers? Not so much. The Ontario Home Renovation Savings (OHRS) program offers up to $10000 towards solar/batteries but there is a catch in how the energy is credited, or in this case, not credited to cover your use.
Under OHRS, batteries are essentially required for anything other than small systems in order to realize increased benefits, but at much higher cost relative to traditional net metering. Including rebates, produced cost of electricity by solar + battery is at least twice as much as existing net metering.
Bottom line: If you were looking to go solar for the lowest absolute cost, or if you are excited about batteries, these grants are a way to reduce the cost of that equipment. However this program is not about saving you money long term. If you want to offset the majority of your annual electricity use at the lowest cost possible, net metering without rebates is still by far the way to go.
Background
There have been a number of changes to the solar landscape in Ontario in the last 20 years. Prior to the green energy act (2009), if you could afford a solar system ($10+/W!) you would either setup independently with batteries or under some type of Net Metering (NEM) agreement.
Under Ontario’s MicroFIT program (2009-2017) almost all solar activity was feed in tariff systems. After the end of MicroFIT we went back to NEM, systems sized to offset as much as possible of a building’s annual electricity consumption. Under the Ontario rules, solar generated surplus kilowatt hours could be credited to the customers account and would last for up to12 months. Systems would generally be sized to offset ~100% of use. In high sun months you make more electricity than the building needs, and you bank your credits against winter use.
The newly announced Ontario Home Renovation Savings program has decided to incentivize solar (and batteries) again but under a very different scheme, called Load Displacement (LD). LD has always been available but would generally never have been considered by anyone other than some businesses.
With LD, onsite generation offsets the energy draw of the building as the loads require it. There are no “credits” generated by producing more energy than needed (whether or not actual surplus energy is sent back out to grid).
Loads versus Solar Generation
This is obviously a big change to how we’ve been implementing solar systems so the first question was, how would this affect our owners and their choices?
Let’s start by looking more closely at how a home uses energy and how solar produces energy.
Above you see a week of data from one of our sites. This chart shows solar produced and energy consumed. Solar generally follows a uniform curve from sunup to sundown, excepting times of cloud. Usage on the other hand is all over the place, as appliances start and stop, and when people are home or not.
As you can see, there is a general pattern of surplus generation during the day when the sun is shining. Note too that the solar energy is not coincident with late day consumption in the house.
Under NEM, during the day the house draws self consumption energy directly from the solar and surplus energy is sent out to the grid. Surplus is measured by the utility, and credited towards your account to be used later that night or later in the year. When calculating your bill the utility goes first to accumulated credits before tallying up the net usage.
Under LD self consumption remains the same, but the surplus is not credited by the utility.
Load Displacement and Solar System Sizing
To understand how the LD arrangement would affect system sizing, we went to our own monitoring data for analysis.
Shown below is solar production and consumption data collected during peak summer (July 13-19 2024), when solar is most productive. Keep in mind, these systems were sized to produce ~100% of the annual energy requirements of these buildings under NEM.
Consider the Solar Factor column. A quick deduction from this data is that NEM sized solar arrays are overproducing by a large factor during the day.
The data shows that at peak season, the homes are self consuming an average of 31% of what the solar was capable of producing during the week. The remaining 69% surplus would either be a donation to the utility, or would need to be stored in a battery to be used later in the day*. Without installing energy storage, you can’t copy the same setup as your neighbours did under NEM and expect the same savings.
*Equinox data for same sites has solar factor of 36% and 46% at winter solstice
All this is to say that sizing a net metered system would be quite different from sizing a load displacement system. No one would install solar panels they don’t get benefit from. Array array size under LD will be much smaller and/or you’re going to have to consider a battery(ies) if you want to get the most out of your panels.
Preliminary analysis suggests that a solar only (no battery) system achieves maximum average utilization with a max size of 3-5kW – any more than that and you’re giving away more than you’re getting. This figure will be different for different homes depending on their loads**
A 3 to 5kW PV system extrapolates roughly to 3000-5000 kilowatt hours (kWhr) savings achievable with a solar only LD system. For reference, Ontario average home electrical consumption is defined as 9000 kWhrs a year, *1 meaning a solar only LD system could offset 33-55% of the average home’s electrical use.
** Under LD it can make more sense to install arrays facing west to bias production to later in the day as power usage in most homes approaches its peak!
*1 Ontario Energy Board 2023
Battery sizing
To offset more than 30-50% of your usage you’re going to have to consider battery capacity. So, how much?
Consider Average Daily Surplus. You see the systems producing 14-35 kWhrs surplus a day, meaning storage of 10-30 kWhrs would be required to bank solar production. This would be lessened at other times of year presumably.
Energy storage has been the area of most recent advancement in solar, with many new options utilizing lithium battery technology available to homeowners. This new generation of batteries are relatively compact, reliable and user friendly. The only catch is cost. Current pricing on energy storage is between $1000 and $1400 per kilowatt hour storage with most home batteries carry a 10 year warranty.
Below are fully costed, turnkey system costs estimates for a variety of configurations. I used 3 brands, Solaredge, Enphase Energy and SMA/BYD equipment, average utility charges, all inspections, permits and labour.
System Cost Examples
5kW Solar only
$13200 to $15200 (-$5000)
Not battery capable
5750 kWhrs/year potential production at 100% utilization.
50-80% utilization est.
5kW Solar only
$15200 to $16400 (-$5000)
Battery ready
5750 kWhrs/year potential, 50-80% utilization est.
5kW Solar, 10kWhr Battery
$25000 to $27000 (-$8000)
5750 kWhrs/year potential, 80-90% utilization est.
8kW Solar, 20kWhr Battery
$36000 to $41000 (-$10000)
9200 kWhrs/year potential, 80-90% utilization est.
12kW Solar, 30kWhr Battery
$44000 to $55000 plus HST (-$10000)
13800 kWhrs/year potential, 80-90% utilization est
** Excluding HST and applicable OHRS rebates $5000 Solar, $1000 per kW, $5000 Battery, $300 per kWhr
Backup Power
As well as enabling the later use of surplus solar energy, an energy storage system can provide backup power in the event of the grid being down. However it is important to note that your system configuration and equipment is not going to provide this by default. You will have to decide you want this feature, and of course it comes at extra cost.
One can decide to have an essential loads sub panel (furnace/fridge/lights/sump, etc.) with a smaller ESS. If there is enough storage and inverter capacity, you could also configure a whole home backup.
In order to safely isolate your independent energy storage system from the grid during a blackout, backup power must be controlled via a transfer switch/system controller. These are usually additional pieces of equipment, though some inverters have built in capability to supply essential load sub panels.
Backup power configuration costs vary by scope and equipment choices and are determined on a per site basis. Rough costs for essential load backups range from $1500 to $5000. Whole home backup configuration varies from $3000-$6000.
Backup capability estimates in addition to the overall system costs detailed above.
Yield and cost comparisons
Let’s look at our 3 system sizes of 5, 8 and 12kW solar arrays and compare energy production and cost. I have again run NEM system packages with fully costed estimates, all figures exclude HST. For LD pricing I have included the applicable OHRS rebates.
Notes:
- For 8kW and 12kW LD systems with larger batteries I included $4K to enable backup power configuration, I assume if you’re spending that kind of money you would spend the extra to have storage usable if grid went down.
- 20 year realized benefit. I am very comfortable putting that figure down for NEM (battery less) systems. They are warrantied for at least that amount of time. However, under LD and when using batteries, note that most storage only has a 10 year warranty. Battery function in years 10-20 is not guaranteed and is an assumed risk in evaluating these figures.
Generally, you can see that NEM setups deliver 20 years of energy at about ½ the cost compared to their battery enabled LD cousins, and that as the NEM system gets larger the price comes down further. It is worth noting that there is a relative sweet spot for the LD scheme at the 5kW solar only configuration – as you’re netting the $5k rebate but not paying for energy storage, to get almost the same benefit as NEM.
What if my usage is higher?
If you’re reading this, there is a very good chance your usage is higher than average, higher than the figures I’ve discussed here. Its true there is a big change happening in electrical consumption patterns as people adopt more EV’s and add/replace heating/cooling systems with heat pumps.
The Ontario average is heading higher and in 2024 many of our projects were essentially us installing the largest possible PV array (20kW) under Ontario’s microgenerator rules and equipment limits, in order to try and achieve maximum possible offset
Under LD, if your usage is 15000kW or higher you will need a 15kW or larger array and at least 40kWhrs of battery – at a cost of $40000-48000 after max rebates, adding another $1.5-5K for backup capability.
Concluding Opinion
When I saw the Ontario government was incentivizing solar I was honestly surprised. When this government first came in 7 years ago they immediately cancelled renewable energy procurement processes and then went silent on any new work in the sector until just now. Interesting timing on all of this too I might add 😊.
After exploring the details of this offer, we see that the solar component of the OHRS program does not appreciably reduce the cost of solar generated power and when including energy storage in a battery, substantially increases it.
It is apparent this is not about saving consumers money or energy – it is about saving the province generation capacity. From a system operator standpoint this move is not without some logic**, but to brand it to homeowners as a “savings program” is a stretch.
Moving forward if one is considering going solar you can choose to go either with NEM or LD.
- If you are looking to make the most cost effective, significant impact to your electrical consumption over the long term, net metering without rebates is the clear choice.
- If you want to remain connected to the grid but value energy independence and self sufficiency above all else, the OHRS rebates are an opportunity to save up to $10000 on setting up a solar + battery energy system.
** worthy of a longer discussion!
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