Tonight at 8:30pm we’ll celebrate Earth Hour, when we all turn out the lights for an hour. Although mostly symbolic, this should actually translate to reduced power consumption; in Ontario, you can track this on the IESO Earth Hour site which will show a graph of actual consumption against that of a typical Saturday night.
Being green is a trendy thing to do, but some people have been doing it long before it became fashionable: the members of Tower Power Toronto, for example, who focus on energy savings for multi-unit buildings such as condos and co-ops. I attended a meeting of the Tower Power group earlier this year to hear all about solar photovoltaic (that is, solar panels that make electricity directly rather than heating water) and some of the recent government initiatives to make this a reality for small condo buildings like mine. We met at the Windward Co-op, where they have already undertaken a number of green initiatives such as thermal solar (solar hot water heating as a pre-heat for domestic hot water) that has reduced their hot water costs by 40%.
My other half is an electrical engineer, and when I told him that I was attending a meeting about solar PV, he pooh-poohed it as inefficient and expensive, costing more per kWh than we could save. He’s right about that: the high cost (and relative inefficiency) of solar PV panels makes it infeasible for generating power for our building directly. Furthermore, even if we felt that it was a good thing to do, the condo reserve fund cannot be used for solar PV projects, meaning that we would have to create a special assessment such that the owners would pay the costs directly. In a building like ours, where the resale timeframe is fairly short, that just wouldn’t fly.
This is where the government incentives come in: the provincial government would really like us to start greening up, in part to reduce the load on current electricity infrastructure, increase the resiliency of the power grid, help phase out coal-fired electricity generation by 2014, and reduce the cost of having to buy electricity from other provinces or states during time of peak loads. If you take a look at the ISEO website, which shows Ontario electricity demand and the price paid for external electricity during peaks, you’ll see that prices for buying electricity from outside the province can be as high as $1.50/kWh. This also has a social value as well as an economic value by promoting micro-generation and green thinking.
To that effect, the Ontario Power Authority started the Feed-In Tariff (FIT) program whereby you can sell up to 10kW of electricity that you generate (e.g., using solar PV) back to your local power authority (in our case, Toronto Hydro) for $0.802 per kWh on a 20-year contract. Given the current cost of installing solar PV, and the fact that the panels are expected to have nearly zero maintenance costs during the 20-year period, the panels pay for themselves in about 13 years: in other words, that provides seven years of electricity revenue free and clear after the panels are paid off. Current domestic electricity costs in Ontario are around $0.012 per kWh, so OPA is willing to pay you over six times the current price of electricity in order to subsidize your solar PV installation, since they will eventually save the cost of having to build new power generating facilities.
As mentioned previously, condo reserve funds can’t be used to fund solar PV installations, so there needs to be some other form of financing. Alternatives include:
- Work on getting the condo laws changed so that reserve funds can be used for projects like this. Our local MPP, Rosario Marchese, is working on this, but this could take some time and may never occur.
- Sell debentures to raise the money for the initial costs, then use the electricity revenue to pay off the debenture with interest. Residents of the building may choose to buy debentures, or anyone who is looking for an investment with a decent interest rate. The risk is that electricity revenues are not sufficient to cover the debenture costs, or that unexpected maintenance costs reduce revenues.
- Use PV venture, venture firms that specialize in solar PV installations. They effectively own the solar PV system, installing the panels and taking the electricity, then pay a percentage of the monthly revenue to the building on which the panels are placed.
- Non-profit organizations (including co-ops, but not condos) can take advantage of 0% loans available from the city of Toronto’s Sustainable Energy Funds including the Toronto Atmospheric Fund, which I heard about at a green energy panel that Olivia Chow hosted last year.
- Live Green Toronto (another city initiative) has some limited grant funding for education and feasibility studies; condos are not eligible but could partner with a not-for-profit.
For buildings within the city of Toronto, you’d be selling power to Toronto Hydro, but the contract would be with the Ontario Power Authority, who are backing the FIT and microFIT programs. OurPower, part of the Toronto Renewable Energy Co-operative can perform assessments on a building to estimate the feasibility and costs: there needs to be a place with good sun exposure (usually the roof) to mount the panels, a method for connecting the panels to the electrical room, an inverter to convert the DC electricity generated by the panels to AC, and a metered connection from the inverter to the power grid. That means that you’d have two meters: one for inbound electricity at the usual market rate (e.g., $0.013/kWh), and one for the outbound electricity that you generate at $0.802/kWh. Ideally, installation would be coordinated with the building roof replacement schedule; otherwise, you’d have to remove and remount the panels during any roof repairs. In addition to the panels, costs include cabling to the electrical room, any modifications required to the roof membrane, insurance, and maintenance (considering a 20-year replacement cycle for the panels, but more frequently for the inverter). Solar PV panels are usually stationary; although panels that move to track the sun generate more electricity, they also have higher maintenance costs due to the moving parts. In order to qualify for the FIT/microFIT program, 50% of the equipment must be manufactured in Ontario, but that can include the framing, inverters and labour costs in addition to the panels. There are some local solar PV manufacturers, including Photowatt and SolGate, making it possible to put together a solution that pumps some money back into the local economy as well as providing green benefits.
How much energy could we really generate with this? Well, our building probably has 200-300 square metres of roof space that could be used; using the estimate of 1 square metre generating 150W in peak sun for a total of about 1kWh/day, that means 200-300 kWh/day, or $160-240/day in electricity revenue. I’m not sure if that 1kWh/day/square metre is an average over the year, or the value for a sunny summer day; assuming that that amount could be generated 1/3 of the time, that’s still $19.5k-29k per year in electricity revenue. As for costs, using a provided estimate of $10k/kW; I’m taking a leap in logic and assuming that’s equivalent to 1000/150 = 6.7 square metres of solar panel, which would be a cost of $300k-450k for the initial installation. That gives an ROI of just over 15 years; assume that my estimate of electricity generated is conservative, I can see how this works out to an average 13-year ROI.
At the end of the 20-year contract to deliver electricity to Toronto Hydro, you’d be in a position to renegotiate a contract with them to continue to provide power, or switch to providing power directly to your own building if then-current price of electricity makes that a better deal.
When you talk about residential solar power, many people think of thermal solar, but there are some fundamental differences:
|Photovoltaic panels generate electricity directly from sunlight
||Water in pipes warmed by sun used as a pre-heat for domestic hot water (hot tap water or central building heat)
|Generates revenue by creating electricity to sell back to Toronto Hydro
||Generates savings by reducing gas consumption for domestic hot water system
|Panels connected by cabling to building electrical system
||Panels connected by (water) piping to building hot water system
|All electricity sold to grid, hence no wasted capacity
||Hot water used only by building and can’t be shared
|Peak capacity during summer when demands on power grid are at maximum
||Peak capacity during summer may be wasted if more hot water is generated than building requires
|ROI can be calculated before project start
||ROI is based on actual gas costs over life of project
It used to be the case that thermal solar was the only economically feasible alternative for residential buildings; however, the FIT/microFIT program brings the cost-benefit calculations for thermal versus PV much closer together.
If you’re in Toronto and interested in learning more, come out to a Tower Power Toronto meeting. OurPower hosts a wiki page for Tower Power Toronto; it’s sadly out of date, since it shows the next meeting as the January meeting, but it contains contact information and I may take it on myself to update the page when I receive notice of the next meeting.
I’ll leave you with a video of Rob Hopkins from last year’s TED conference, on transitioning to a world without oil: