Residential Solar in the Ontario microFIT Project: Three Families' Experiences
Solar Home with sunflower photo via Bigstock
Industry has seized the opportunity to capitalize on the revenue generated by the fixed return of twenty year contracts with the government’s power regulator. Individuals have also participated although the hurdle of coming up with thirty to forty thousand for purchase and finding the right service provider for the components and installation has created some unique challenges and opportunities.
The efforts put forth by individual investors in these projects have a story all their own. Those who have had success utilized several methods with varying degrees of difficulty. The questions posed to the three Ontario families who used solar installations to participate in the MicroFIT program were as follows:
1) What attracted you to the Ontario microFIT program?
Family 1: Our initial interest was environmental and quickly turned to see if it there was a reasonable profitability and if the math/projections would prove true.
Family 2: It started years ago with alternative energy awareness. When the MicroFIT program started a friend had participated and our interest was piqued. Then the project itself caught our attention and we became quite excited about the potential.
Family 3: To save the environment – any financial considerations were secondary. If the project were revenue neutral I would have still moved ahead.
2) What was your capital investment for the project? What was your expected payback period of the investment? Did your actual payback period match your expected payback?
Family 1: Thirty Three Thousand however it is notable that the provincial taxes are rebated within the first year. Our expected payback period was five to six years however with the adjusted annualized distributions from the power authority – it will be well below the five year mark.
Family 2: Forty Thousand. The expected payback period is six to seven years. We believe we are on track to meet that timeline.
Family 3: Thirty Three Thousand. From my calculations, the expected payback period is going to be seven years however with the directional placement of the panels and the winter months it may take between seven to eight years to recoup our initial outlay.
3) How did you finance the project?
Family 1: A personal line of credit that carries at a very low interest rate as it is secured against the property on which the MicroFIT project is operating on. The interest charged on the capital that was borrowed to invest is a tax write off as well.
Family 2: We cashed in some non-registered liquid assets to finance our project.
Family 3: We secured a home equity line of credit.
4) Are there any cautions to be made aware of or advice/tips to make the process smoother?
Family 1: In hindsight – the greatest concern would be to make sure you are comfortable with the service provider whether a full service company that provides the components and installation or otherwise. Another tip would be to ensure if you are completing a rooftop installation – that you consider the quality and duration of the roofing that will lie under the panels as the cost to replace doubles with a remounting of the system already installed.
Family 2: My best advice is to beware of the misinformation that is being shared. I have heard some tall tales from not being able to get insurance on your home to the fire department not being able to service the home in an emergency. Doing your own homework and getting a lot of questions answered will make the process much smoother.
Family 3: I would have to say that involvement in every aspect of the project is key. Work with your service provider/installer to ensure that they are completing the work to your satisfaction. Also, gathering as much information as possible beforehand was very helpful so as to understand what will happen once you commit to your project.
5) Would you suggest this method to others looking at this avenue and why?
Family 1: Yes, I am an advocate and have suggested the program to neighbor and family. The benefits are many fold from gaining a positive revenue stream, the tax write offs, to getting paid as an energy producer. I like to think of it like have the income of a tenant that doesn’t exist.
Family 2: Absolutely, this is a great investment in your home, your future, and your finances.
Family 3: Yes, we have a responsibility to those who will come after us to ensure that there is a healthy environment and everyone should be doing their part to help out.
As the Ontario MicroFIT program evolves over time, what will remain the same is that there are those who are committed to making a contribution to the future health of the planet by becoming part of the answer to our energy needs. From profitability to being a good steward of the planet – these families have clearly shown that there are many great reasons to investigate and participate in initiatives that will lead to a better future for everyone.
Michael Smele is an Ontario resident who provides finance and mortgage options for those looking to participate in the MicroFIT program. You can find him at Mortgage Truth.