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- NSP’s rate will increase by 3.6% yearly,
- Your solar panels will degrade at a linear rate of 0.5% yearly,
- For graphs and calculations a 20 panel (5.7 kW) micro inverter system with a 185 degree azimuth and 25 degree slope was used (HRM, NS)
- Historically, provincial power rates have increased by an average of 3.6% annually,
- 3% annual increase is conservative and matches inflation,
- Industry analysts anticipate the rate to be $0.25/kWh by 2030.
Estimating the rate escalation isn’t easy. We can only go with our best predictions.
We decided to extrapolate on the historical increase in utility rates from NSP and see what our power rates will look like if they continue to increase by 3.6% per year long into the future.
How it works
We can then take the kWh’s produced each year by any size of system and multiply by the projected rate. For example: a 5.7 kW system made up of 20 high efficiency panels and inverters will produce 7,400 kWh annually which is equal to $1,110 at a rate of $0.15, or $1,850 at a rate of $0.25. We can then take the sum of the projected earnings year over year if the rate increase is constant.
The tax adjustment
Currently NS residents receive a rebate of 66.6% of the HST that they pay for their power. That means that they are paying 5% HST instead of 15%. When you are replacing power that you would normally purchase from the utility company with green power that you have produced yourself you need to factor this in. Not only do you not pay for the kWh’s that your system produces, you also don’t pay tax on it. So you can add 5% to all projected earnings based on: rate multiplied by kWh’s produced (this has not been factored into our graphs and calculations).
Based on a usage of 10,000 kWh’s per year.
If you are like the average home, this solar system can produce 74% or 7,400 kWh’s of the power you use in your home, every year. In most cases you’ll be left relying on the grid in the winter time when your heating costs factor in and outproducing your needs during the summer months. If you have produced more than you’ve used you’ll be left with just the grid connection cost of $10.83 and your surplus energy will go towards you future usage as a credit valued at the consumer rate (currently $0.15/kWh).