Economic analysis of residential solar photovoltaic electricity production in Canada

Abstract This paper presents the results of a comparative economic analysis of residential solar photovoltaic systems throughout the provinces of Canada in 2013 and 2016. The study was conducted using the discounted cash flow method. Basic economic theory involving the concepts of net present value, payback period, and internal rate of return was used, based on data from 2013 and 2016. The solar photovoltaic market is dependent on supporting policies and incentives. Thus, the relevant federal and provincial supporting policies for building implementation are briefly described and considered in the calculations. Results are presented in the form of summary tables showing selected major cities, classified into different categories, in terms of financial viability. The results show that in 2013 there were 9 cities out of 13 for which the payback period was expected to be higher than 30 years but in 2016, only Montreal PV projects remain infeasible. Furthermore, sensitivity analyses were conducted to establish new values for the selling price of electricity, initial cost of the proposed project, and percentage of subsidy required to ensure project attractiveness, that is, a short payback period of only 5 years for residential buildings.