What is the timing for payback?

Let's Dig into Quebec's Solar Game

The solar scene in Quebec isn't lacking questions, especially with Hydro-Québec's new game plan. Hydro-Québec aims to install 125,000 new solar systems within a decade, yet the steep initial investment puts many consumers off. And, unsurprisingly, the project's profitability takes a staggering 20 years, according to Hydro-Québec's own calculations.

"Before the Indigenous Green Fund subsidy, we were like, 'no way we'll make our money back,'" Anne-Louise Lalancette, a Saint-Mathias-sur-Richelieu resident expressed, having spent close to $35,000 on 28 solar panels for her home.

Electricity rates are exceptionally low in Quebec, making it a green heaven. But, from a financial perspective, not so enticing. Only the environmentalists can relish Quebec's low electricity rates, not the wallet-watchers.

To win the hearts of Quebecers, the subsidy needs to chop the payback time in half, according to industry experts. Patrick Goulet, president of Énergie solaire Québec, puts it this way: "If your return on investment is within 10 years, that's going to draw a crowd. That's the sweet spot." Several companies concur with his view.

Although the subsidy's shape remains unclear, Hydro-Québec had previously suggested it might amount to approximately 10 to 15% of a solar installation. Yet, the industry believes this is inadequate to motivate consumers.

Take, for instance, Hydro-Québec's online calculation tool case study which includes 16 solar panels of 300 watts each. Even with a 15% subsidy, this project wouldn't be profitable until around 23 years.

However, according to Mr. Goulet, Hydro-Québec's solar calculator needs an update. It disregards inflation of tariffs and doesn't mirror the present market scenario. "The return on investment today, without a subsidy, we're talking around 15 to 20 years," Mr. Goulet explains.

On the bright side, a profitability analysis by Alt-Énergie for Yves-Christian Lavoie's Alma project estimated the payback period at 15 years.

The Big Question: Why Solar?

That's another big question: why go solar when Quebec's electricity is amongst the cheapest in America?

Charles Moquin, president of WattSun, explains that electricity bills may soon hike up. According to the Union of Consumers, electricity rates could spike as much as 9% yearly from 2028. Solar panels reduce grid dependence and help curb electricity bills, especially with batteries.

Furthermore, solar panels foster energy awareness, as per Frédéric Lavoie, Alt-Energie's general director. "Quebecers are hardly aware of their energy consumption," he says.

Homeowners like Anne-Louise Lalancette, Yves-Christian Lavoie, and Martin Lambert have all noticed the impact of solar panel investments on their lifestyle, as they can trace their energy production.

According to the president of WattSun, that's the real advantage: "That's where we need to go to help people understand energy. If suddenly you don't have any, what do you do? You have to learn to consume it better," he concludes.

Enrichment Data:

The Canadian Renewable Energy Association (CanREA) has recommended implementing a subsidy for solar panel installations by 2026 to boost solar technology adoption in Quebec and Canada[2].
The proposed subsidy could lead to reduced initial costs, increased adoption, improved return on investment, and environmental benefits[2].
In addition to Quebec's incentives, consumers can also benefit from federal incentives like the Canada Greener Homes Loan and Investment Tax Credit[3].

With the Canadian Renewable Energy Association suggesting a subsidy for solar panel installations by 2026, there is hope for reducing initial costs and improving the return on investment for solar technology adoption in Quebec and Canada.
As electricity rates could potentially increase by 9% annually from 2028, homeowners like Anne-Louise Lalancette, Yves-Christian Lavoie, and Martin Lambert find value in solar panel investments for reducing grid dependence and curbing electricity bills, especially with batteries.
Environmental benefits are not the only advantage of solar panel adoption; solar panels also foster energy awareness among homeowners, raising their understanding of energy consumption.
For the solar industry in Quebec, a significant subsidy is essential to motivate consumers and bring down the payback time to 10 years - the 'sweet spot' according to industry experts - to make investing in solar energy a more attractive financial decision, especially when considering the home-and-garden improvements that sustainable living and energy-efficient homes can offer, as part of the broader lifestyle trend.