Solar PV (photovoltaic) is the world’s fastest-growing energy source, with growth in Canada having increased by 14 percent in 2021. What does this mean to Toronto-area commercial property owners? While the general public focuses on solar to reduce carbon emissions, the direct benefit for many building owners is primarily financial.
In short, the rise in solar power spells opportunity for property owners when it comes to improving cash flow and increasing revenue. Building owners can leverage their rooftop real estate for financial gain in two ways. The first way is to own the solar PV assets and sell the electricity that is generated to the power authority. The second is by renting rooftop space to a third-party solar company.
When solar demand rises, so do opportunities to benefit financially from solar power. When you own your PV asset or rent out your roof space to a solar outfit, it’s money in the bank.
Here are some basics about solar PV systems and why they may help your business be even more successful.
What is Solar PV (Photovoltaic) Versus Solar Thermal?
We can open up the discussion by saying that talking about solar PV panels is different from talking about solar thermal panels. The basic idea is the same: Both use sunlight to create usable energy. The difference is that thermal panels collect and directly convert solar rays to heat a fluid like water or air.
PV systems, on the other hand, convert thermal energy into electricity that can be used for any purpose, not just heating fluids or air. Without getting too technical, the energy absorbed by the PV cells in the panel creates electrical charges that move in response to an internal electrical field in the cell, causing electricity to flow. The outcome is that electricity generated by the PV system can be sold, not just used to power the building it sits on.
Now that we know the difference between solar photovoltaic systems and thermal panels, let’s look at why solar PV has become so popular with today’s property owners and builders.
Why Should Property Owners Consider a Solar PV System?
There are many upsides to installing solar PV panels, but sometimes a rooftop solar system can be a double-edged sword. Here are some potential benefits, with a few words of caution.
Revenue Generation: Not surprisingly, one of the main drivers for solar PV panels is that they provide additional revenue for building owners. If they own the solar PV system, they bill electricity generated to the power authority at a specific rate per KW (kilowatt) hour. Landlords can also rent their roof space to a solar company that will build and own the solar PV system.
Renewable Energy and Incentives: Upgrading or designing new buildings powered by renewable energy is a higher priority than ever. It also can make good business sense, especially with today’s green tax incentives. The tricky part is that the agreement with the power authority typically stipulates that the carbon offset credits accrue to them, not the building owners.
Property Value: Owning a building with rooftop space that is available for a solar PV system may be a selling point that increases property value. On the other hand, if the purchaser does not want the solar asset on their roof, the vendor may be required to have panels and racking removed and contracts canceled with the potential for penalties to become due and payable.
As we can see, there are some advantages and disadvantages, depending on the specific situation, so it’s a judgment call. Solar PV is a significant investment that requires careful consideration.
7 Common Questions About Installing Solar PV from Property Owners
The questions below may affect your ability or wish to use solar PV panels. Anyone considering a PV system should address these questions to the relevant professional—a structural engineer, architect, contractor, or other experts.
- Can my roof structurally support a PV system? A structural engineer will need to determine if a roof can support the additional load factor of the solar PV system components or if it will need structural enhancements.
- Is my roof in suitable condition? The roof’s orientation plays an important role in solar PV design. The most optimal direction to face your solar panels is somewhere between south and west. It is at this location that your panels will receive the maximum sunlight throughout the day. The number of roof levels and shading factors are also important to making this decision. Another key consideration is the roof’s age and its estimated remaining useful life.
- What are the costs and savings? The cost of solar PV systems has dropped over 60% in the last ten years, which has significantly reduced the upfront costs. Power authorities have also been lowering the cost per kilowatt hour that they are willing to pay for rooftop solar power. As for ongoing costs and savings, considerations include return on investment and how long it takes to recover the initial investment. Note that the contract is time limited for 20 years or so.
- How much power will my system produce? This basic calculation requires two figures: the solar output of the panels (measured in Watts) and the annual number of solar hours for your area. Solar panel output generally varies by model and ranges from around 250 to 450 Watts.
- How long does it take to install? Installation may vary greatly depending on the size of the building, the number of roof levels, the panel coverage area, the complexity of your overall project, and the system components and installation method that best suit your project.
6. What type of maintenance and/or capital repairs are required? Solar panels are highly reliable and low-maintenance. Before installation, make sure to have an infrared roof scan and a professional roof inspection performed. A roof replacement decision is required if the roof is in the middle or late stage of its useful life [i.e., more than 9-10 years old]. If the solar panel installation is part of a roof replacement, then select the elements of the new roof assembly carefully to extend the roof’s lifespan and reduce maintenance.
7. What are the safety issues? As with any other rooftop concern, there are risks from weather, objects impacting the solar PV system, and additional roof traffic from service people. In particular, there is an increased risk of a fire with electrical cabling and inverters located either on the roof or on the ground.
Is Solar PV Power Right for Your Business?
Installing solar panels can be a strategic, money-generating, carbon-reducing decision. New technology, policies, and lower pricing are certainly making it an increasingly attractive energy option. At the same time, a solar PV system may not be right for your property asset. If you are wondering if solar PV panels are a good investment, the experts at Elite Roofing can help you explore options and make the most informed decision. Contact Elite Roofing today.
Interested in learning more about solar PV? Next month we’ll be publishing Part 2 of this short series on solar PV systems.
