ONT ONLY - microFIT solar panel program: 10-14% return for 20 yrs * FAT LADY HAS SUNG

JWL wrote: ↑With the required approvals, if you install up to 10kW of solar panels the Ontario Power Authority (OPA) will commit to paying you 54.9 cents per kWh you produce for 20 years. This is much higher than you pay your hydro company because it is designed to compensate you for the cost of the panels/equipment.

Isn't it great to live in Ontario, where the government does sensible things like pay 54.9 cents per kWh to producers for renewable energy?

Unlike Quebec, where retail consumers pay close to 5.5 cents per kWh for renewable energy.

The only good thing to say about this Ontario program is that the government used to pay 80 cents per kWh.

If the Ontario government is keen on renewable energy, I'm sure that Quebec would be happy to sell some to Ontario at somewhere between 5.5 and 54.9 cents.

Of course, that wouldn't give Ontario ministers many photo-ops. This Ontario program is a license to print money at the expense of all Ontario residents. It should be cancelled immediately.

I've been bullish on this and have started the application twice. The first time the contractor closed shop suddenly and the second time the contractor simply stopped returning my e-mails, then my calls.

One question that went unanswered is what are the maintenance expenses over the years? Another is will future home buyers give you a fair price for the value of cash flows arising from the panel? If not, it is more a locked in, high-interest GIC. The ROR may be sufficient, but the illiquidity can cause problems in some future states of the world.

I want to get more non-official info. Where should I go?

What I'm looking for are the reviews by homeowners who have recently done this.
What are the initial costs for an average suburban single family home?
What are the requirements for the roof?
If the current shingles are a decade old, should the shingles be replaced before the solar system is installed?
How long does it take to get this done by the contractor?
Where to get the list of reliable contractors?
What are the difference between different solar systems that might be available for this program?
Is this a build it and forget it installation, or does it require regular maintenance, and if so what are the costs?
Is this program the same with every hydro company in ON, or are the differences (restrictions, costs, etc)?
What are the known pitfalls?
Are there products that don't go on top of the existing roof, but instead become a part of the roof (meaning in place of shingles)?
Can current solar system last the entire duration of the guaranteed income? Is there a guarantee?
Does this installation automatically causes you property value to go up, so you get to pay more in property tax (like it happened with wind generators)?
Is there a website/forum/community of users where such info can be researched, questions asked, and opinions reviewed?
What is the increase in home insurance after the installation is done?
How is the income from this system taxed?
Are there any financial institutions who are willing to finance this long term for a home owner at an attractive rate?
Does CRA allow the loan interest to be deducted or is there some restriction due to the nature of this government-sponsored program?

If the initial layout is $50K then I for sure would like to get a lot more info before even thinking about committing to this. But a possible return greater than 10% sure is very attractive, no to research this topic in more details. Way too many questions at this time.

I can't believe people are still buying in to this crap. Just wait until the Liberals lose power and the contracts are torn up.

You do realize that governments have the ability to absolve themselves from liability, right?

yes they do have such ability. but not every contract is the same. remember that Bliberals are required to pay hundreds of millions in penalties for all the power plant contracts they have cancelled. so, depending on how this program is organized the risks for home-owners can be manageable or not. that's why I want more info.

dgodsell wrote: ↑I've been bullish on this and have started the application twice. The first time the contractor closed shop suddenly and the second time the contractor simply stopped returning my e-mails, then my calls.

One question that went unanswered is what are the maintenance expenses over the years? Another is will future home buyers give you a fair price for the value of cash flows arising from the panel? If not, it is more a locked in, high-interest GIC. The ROR may be sufficient, but the illiquidity can cause problems in some future states of the world.

Do your own application, then choose your installer. It is really easy to do. Just make sure you enter the property owners and property description EXACTLY as it is shown on the Parcel Register. Every space, colon and letter must be exactly the same or it will be rejected. Safest way to do it is copy from the Parcel Register PDF and paste it into the application.

If you sell your home you can:
Sell the equipment and contract to the new homeowner
Lease the roof from the new homeowner but you continue to own the contract, the panels and the revenue
Remove the panels and take them with you to your new house. Keep the contract in place and generate revenue at your new house.

You do need to consider increasing your home insurance to cover the panels ($65/yr for me). Other than that you should remove snow to get revenue in the winter months (but that isn't a lot of $) and clean the panels periodically.
If you go with micro-inverters, they are warrantied for 25 years.
If you go with a string inverter they are warrentied for 10 years and may not last 20 so you could have to buy a new one (currently $6000). You can apparently buy an extended warranty for about $1000 to take it out to 20 years.

Answers to some of LarryLat's questions

This blog may be of interest to you: http://solarinstall.blogspot.ca/2012_08_01_archive.html

What are the initial costs for an average suburban single family home?
What are the requirements for the roof?
See first post

Can current solar system last the entire duration of the guaranteed income? Is there a guarantee?
Panels have performance guarantees for 20-25 years (typically 80% performance after 20-25 years and this is taken into account for the return)

How is the income from this system taxed?
As business income (part of your personal income but expenses like the cost of the system, interest, maintenance, are deductible)

Are there any financial institutions who are willing to finance this long term for a home owner at an attractive rate?
Yes

Does CRA allow the loan interest to be deducted?
Should be.

If the initial layout is $50K then I for sure would like to get a lot more info before even thinking about committing to this. But a possible return greater than 10% sure is very attractive, no to research this topic in more details. Way too many questions at this time.
Fair enough, but if you wait too long you will miss out on the opportunity to be paid 54.9 cents per kWh. This is why I suggest spending $10 for a Parcel Register (Land Registry document) and get an application in NOW. You are not committed to doing it by applying you are just asking OPA to be committed. You can decide later and if it is no-go then you've lost $10. But the upside is HUGE!

Here is all the info required for the application. I've added a few comments in red

Section 1: Eligible Participant Selection (Edit)
1.1 You are applying under the Eligible Participant Schedule category: [SELECT: Individual]

Section 1.1: Applicant (Edit)
1.1.1 Name and Date of Birth of the Applicant(s): [THIS HAS TO BE EXACTLY AS IT IS ON THE PARCEL REGISTER]
1.2.1 Applicant's Contact Person:
1.2.2 Primary Email Address:
1.2.3 Secondary Email Address:
1.2.4 Phone Number:
1.2.5 Applicant Mailing Address:

Section 2: Contact Information (Edit)
2.1.1 Representative's Contact Name: [THIS INFO IS A REPEAT OF ABOVE IF YOU ARE APPLYING AS AN INDIVIDUAL]
2.1.2 Representative's Email Address:
2.1.3 Representative's Phone Number:

Section 3: Project Details (Edit)
3.1 The proposed Renewable Generating Facility will be using the following type of Renewable Fuel: [SELECT: Solar photovoltaic (Rooftop)]
3.2 Name of proposed microFIT Project:
3.3 Nameplate Capacity of the proposed microFIT Project (in kW): [ENTER 10.000]
3.4 Will the proposed microFIT Project be connected to a battery back-up or supply system? [SELECT: No]

Section 4: Proposed Project Location (Edit)
4.1 The proposed Project is located on: [SELECT: Property owned by Applicant]
4.2 Project Address: [THIS HAS TO BE EXACTLY AS IT IS ON THE PARCEL REGISTER]
4.3 Project Municipality:
4.4 Property Identification Number (PIN): [THIS IS ON THE PARCEL REGISTER]

Section 5: Local Distribution Company (LDC) Information (Edit)
5.1 Local Distribution Company:[THIS IS YOUR HYDRO PROVIDER]
5.2 Account Number:
5.3 Name as it appears on the account:

Section 6: Required Documents (Edit)
6.1 Parcel Register. To learn more about the parcel register click here:
Parcel Register – [LAND REGISTRY PROVIDES A PDF OF THIS DOCUMENT THAT YOU ATTACH]
6.2 Additional Contact Information Form: [IF THERE IS A CO-OWNER OF THE PROPERTY YOU HAVE TO PROVIDE THEIR CONTACT INFO AS AN ATTACHED DOCUMENT]

Anonymouse wrote: ↑My understanding is that the current microinverter designs use electrolytic capacitors. If that is the case, those devices will definitely not last 25 years, and your warranty is worthless if the company goes out of business. Keep that in mind, and consider a single big inverter in a climate-controlled space.

I am currently trying to decide between "big" string inverter and micro-inverters.

I am not an expert on capacitors, but RFDer Yazza found this article written by this expert indicating that the limited life of electrolytic capacitors is an "urban myth". If you can provide information to support your point I would be genuinely interested in reading it.

My understanding is that the string inverters are typically warrantied for 10-12 years and they are expected to last up to 15 years but definitely not 25. So if you go that route you should budget for an extended warranty or future replacement. And of course the warranty on these units has the same risk as you refer to for the micro-inverters: if the company isn't around when you have a problem then the warranty is worthless.

Anonymouse wrote: ↑When I did the math a few years ago, break even was on the order of 8-10 years, and I'd expect the current deal is not much better than that.

If you'd be kind enough to read the first post I explain why the math is different than a few years ago. That's the whole point of the thread.

What are the odds that a new government merely passes some legislation to cancel these outrageous contracts?

8-10 year payback period isn't very interesting either; can easily buy a plethora of publicly traded companies that are implying >7-10% ROE at current prices.

Mark77 wrote: ↑What are the odds that a new government merely passes some legislation to cancel these outrageous contracts?

As with any investment there are risks.
I believe that the "odds" a new government would arbitrarily cancel the contracts is very low. Tim Hudak has stated that he would stop the program going forward but would not cancel existing contracts. Andrea Horvath has said she would keep the program in place.
I believe the risk of a new government cancelling the contracts (there is no provision in the contracts for the OPA to cancel them) AND not paying compensation for violating the terms of the contract to be extremely low.
Keep in mind that theses contracts are with individuals/voters not faceless corporations.

Mark77 wrote: ↑8-10 year payback period isn't very interesting either; can easily buy a plethora of publicly traded companies that are implying >7-10% ROE at current prices.

As noted in the title and first post the ROI is much higher than those rates and is contractually guaranteed rather than "implied" (other than the risk of government cancelling the contract without compensation).


In the end each investor must do their best to understand the risks vs rewards. Predicting the acts of future governments is difficult to say the least but hopefully this covers off the available facts of this risk.

I fully installed a 10kw system back in February and it is up and running well, and generating income. I am located near the Hamilton area, if anyone is looking for a local reliable installer PM me for details.

I think it is a great program, and with a 20 year signed contract with the government should be a good go. Worst case scenario if they break the contract, I am sure they would have to pay some penalty, and then just switch it over to producing for our own house. I have calculated our payback to be under 5 years.

Most people complaining about the program just don't have a southern exposure roof, or room enough to place 40 panels to maximize the return.

To answer the above questions:

What I'm looking for are the reviews by homeowners who have recently done this. - GREAT, can't complain
What are the initial costs for an average suburban single family home? $40k - systems have dropped considerably. That INCLUDES HST of almost $5k which you can get returned if you register as a business (Input Tax Credit)
What are the requirements for the roof? SOUTHERN exposure is the best for maximum return - and room to place about 40 panels (for the full 10kw)
If the current shingles are a decade old, should the shingles be replaced before the solar system is installed? As part of the structural engineer, he recommended replacement prior to install - so we are writing off that section of the roof as an expense.
How long does it take to get this done by the contractor? Once you have your approvals and ready to go - generally a couple weeks from start to finish
Where to get the list of reliable contractors? Depends on your area - I can recommend one for Hamilton area.
What are the difference between different solar systems that might be available for this program? To qualify for this program the MAJORITY of content must by ONTARIO, so like cheap Chinese panels $30k for the system, won't qualify.
Is this a build it and forget it installation, or does it require regular maintenance, and if so what are the costs? Set it and forget it unless something goes wrong with a panel or inverter - then swap and replace
Is this program the same with every hydro company in ON, or are the differences (restrictions, costs, etc)? - Different Hydro companies charge different fees. Ie: Hydro One $1400 for hookup - Haldimand Hydro - $200 !
What are the known pitfalls? Rumours that the government could pull out of their 20 year contract with you, but again RUMOURS. I am sure a class action lawsuit would result given the thousands of homeowners up and going.
Are there products that don't go on top of the existing roof, but instead become a part of the roof (meaning in place of shingles)? Not that I'm aware of.
Can current solar system last the entire duration of the guaranteed income? Is there a guarantee? Degredation of panels is .25% or .50% per year. So you should still be running 90-95% by the end of the 20 years.
Does this installation automatically causes you property value to go up, so you get to pay more in property tax (like it happened with wind generators)? OMB said that it will NOT affect property value, but WILL affect home insurance.
Is there a website/forum/community of users where such info can be researched, questions asked, and opinions reviewed? Lots of different websites out there - just google microfit and solar panels, etc.
What is the increase in home insurance after the installation is done? I'm getting hosed about $800 this first year - will shop around for January renewal.
How is the income from this system taxed? Like any other business income - but according to my calculations as you write down the system, should be year 10 or beyond before you start to really pay.
Are there any financial institutions who are willing to finance this long term for a home owner at an attractive rate? I found NO with TD even though they claim they are friendly to the idea - they wanted to set it up as a business loan - like 8%, when I could do it on my own with Line of Credit @ 5%
Does CRA allow the loan interest to be deducted or is there some restriction due to the nature of this government-sponsored program? Yes, you can deduct the interest.



Hope this answers your questions, if you have any others feel free to PM me, or I can recommend my installer (or show you my place before), if interested.

slotscanada wrote: ↑What are the requirements for the roof? SOUTHERN exposure is the best for maximum return - and room to place about 40 panels (for the full 10kw)
What is the increase in home insurance after the installation is done? I'm getting hosed about $800 this first year - will shop around for January renewal.

To add to this, each panel is about 65" x 39", so you need about 700 sq ft of roof to fit 40 panels.

For insurance you are definitely getting hosed. I'm with TD Insurance and they quoted me $65/year for a $35K increase in my property value from solar panels.

Mark77 wrote: ↑What are the odds that a new government merely passes some legislation to cancel these outrageous contracts?

8-10 year payback period isn't very interesting either; can easily buy a plethora of publicly traded companies that are implying >7-10% ROE at current prices.

The Liberals have already reneged on the previous Solar contracts. They reneged on the gas plant contracts. They will reneg on this as well.

Odds: 100 percent.

LarryLat wrote: ↑yes they do have such ability. but not every contract is the same. remember that Bliberals are required to pay hundreds of millions in penalties for all the power plant contracts they have cancelled.

Yes and no.

Canada has interesting law regarding property rights: you have none. The government can seize your property whenever they feel like, for any reason they choose, by passing a law to that effect.

For example, many WWII veterans came home disabled and unable to manage their financial affairs. The federal govt took it upon itself to be their trustee. Any trustee has legal obligations to reasonably manage these funds. Like many things the govt does, it did this incredibly badly.

Jump forward many decades, and veterans & their families have missed out on decades of interest and investment returns, amounting to hundreds of thousands of dollars for each veteran.

Many veterans & their families sued, and won at superior court and court of appeal.

However, the supreme court ruled unanimously in favour of the govt. Why? Because the government passed a law saying that they didn't have to pay, so case closed.

http://www.cbc.ca/news/background/veter ... _case.html

Now, the government might decide to pay compensation if they seize your property (to build an airport, subway, etc), but they are only doing that to be nice.

Anonymouse wrote: ↑Your 14% ROI figure - did you use RETScreen to arrive at it? Because that it simply too good to be true, and I would hope that my government is not really borrowing money to enrich microFIT participants to such a ridiculous degree.

The potential installers used RETScreen. Please read the first post which explains why the opportunity for return is currently so high right now. The government set the 54.9 cent rate when the equipment was much more expensive. But the cost of equipment (my investment cost) has dropped dramatically and for a short time we can still get the 54.9 cent return. Its like they issued a "bond" at $100 to earn 7% last June, but you can now buy that bond for $50 and still get the same $7 coupon (I'm not saying it IS a bond, just trying to make an investment vs. return analogy).

peano wrote: ↑The Liberals have already reneged on the previous Solar contracts. They reneged on the gas plant contracts. They will reneg on this as well.

Odds: 100 percent.

And they paid the gas plant contract holders a fortune to reneg on the contracts. If they want to pay all the revenues to me in advance and cancel the contracts, that's fine with me.

M8Rxmjsik wrote: ↑Yes and no.

Canada has interesting law regarding property rights: you have none. The government can seize your property whenever they feel like, for any reason they choose, by passing a law to that effect.

For example, many WWII veterans came home disabled and unable to manage their financial affairs. The federal govt took it upon itself to be their trustee. Any trustee has legal obligations to reasonably manage these funds. Like many things the govt does, it did this incredibly badly.

Jump forward many decades, and veterans & their families have missed out on decades of interest and investment returns, amounting to hundreds of thousands of dollars for each veteran.

Many veterans & their families sued, and won at superior court and court of appeal.

However, the supreme court ruled unanimously in favour of the govt. Why? Because the government passed a law saying that they didn't have to pay, so case closed.

http://www.cbc.ca/news/background/veter ... _case.html

Now, the government might decide to pay compensation if they seize your property (to build an airport, subway, etc), but they are only doing that to be nice.

I do not dispute this for a minute and it is an excellent point that not only could the government stiff us on the solar contracts with out compensation, they could also take away our land and probably our bank accounts too. While this may be 100% true I still choose to accept this risk, buy land (taking the risk the government will take it), deposit my money in a bank (taking the risk that the government will take it), invest in a solar contract (taking the risk that the government will cancel it without compensation).

Seems kind of risky and not for me. I'll pass.

Not too sure why you guys are talking about this when no one on here has installed any panels and signed a contract with the government. The only way to know is for someone to do it and show the rest of us the statements of income. We live in Canada where half of the year is snow/winter, the extreme conditions will surely cause the solar panels to somehow get damage. If I was in a country with 12 summer months, then it will be worth it. Not in Canada.