Installing Photovoltaic Systems in Ontario: Do it sooner rather than later

In previous articles we discussed PV as an investment and PV systems from homeowner's perspective. However, while installing a photovoltaic system is a great investment in general, there are some significant reasons for doing it sooner rather than later. Among them: increasing system price, decline in energy purchase price, accelerated amortization, Home Renovation Tax Credit, and being a green role model.

Increasing system price
The cost of photovoltaic systems is dependent on numerous factors: supply/demand for an underlying commodity (silicon) and cells, foreign exchange rate, local content rule implementation. Consequently, system prices may increase in short run (e.g. until enough manufacturing facilities are built in Ontario to satisfy all demand) or in long run (e.g. due to significant change in foreign exchange rate).

Decline in purchase price
Currently within the FIT Program, there is no notion of gradually declining purchase price for generated electricity. However, based on German experience (which is mirrored in the FIT program so far) most industry experts expect introducing a 5-7% reduction of feed-in tariffs each year (so-called degression).

Thus, after initial two years for newly installed PV systems the rate of degression may be higher than annual drop in installed system prices. The FIT Program may also be suspended (which happened with RESOP) or capped (as in Spain) for new entrants.

Accelerated Amortization
For purchases made before Dec 31, 2011, homeowners can use Class 43.2 of the Canada Income Tax Act to write off the income from their solar system until the capital cost of the system is fully depreciated.

Home Renovation Tax Credit
Residential solar systems are also currently eligible for $1,350 federal Home Renovation Tax Credit.

Being a Green Role Model
On top of above mentioned financial reasons, there is significant moral incentive to be a green role model. With constantly rising global warming awareness, you will demonstrate to yourself, your kids, your friends and your neighbors that you really do care about the environment.

There are significant benefits to being an early adapter of photovoltaic technologies. Some of them are strictly financial (e.g. increasing system price, decline in energy purchase price, accelerated amortization, Home Renovation Tax Credit), while others offer the huge moral incentive of being a green role model.

In the next article we will talk about factors which may contribute to higher price for photovoltaic systems.

To learn more about photovoltaic systems visit Solar PV Installation.