Grainswest - Tech 2026

Tech 2026 Grains West 28 FEATURE Larry Peters, owner of Okotoks-based Big Rock Power, said farmers often underestimate the role depreciation can play in improving overall returns. He noted that solar assets can qualify for accelerated asset depreciation as high as 55 per cent in the first year alone. “As a utility retailer, we buy bulk electricity and resell it,” said Peters. “And I don’t think Alberta farmers realize just how much opportunity solar can offer them.” Peters added that grants, subsidies and carbon credits can further shift the economics of solar installations. “The lower the capital cost, the higher the rate of return,” he pointed out. Retzlaff chose not to pursue available grants, while Auch did qualify for and opt to take advantage of an investment tax credit tied specifically to irrigation use. No matter how a farmer chooses to invest in solar, the economics remain sensitive to electricity pricing, export rates and provincial policy, meaning returns can vary considerably between operations. SIZING A SOLAR SYSTEM “Investing in a solar installation is a major decision, and ultimately it has to make business sense,” said Peters. Given the 25- to 30-year lifespan of most solar arrays, he believes farmers should view them as a long-term, generational investment. “Solar can add value to a farm operation not only by generating income, but by allowing the business to become more self-sufficient in producing one of its most important and costly inputs: electricity.” His advice to farmers considering a solar installation is to work with a credible company that can accurately model the economics and long-term returns of the investment. When determining the size of a solar installation, Schroeder recommends a system be designed to generate 10 per cent more power than the annual electricity consumption required to power the site. Depending on the operation, a site could range from an entire farm’s electricity use to the power required to operate a specific number of irrigation pumps. In Alberta, regulations limit systems to a maximum of 110 per cent of the previous 12 months of electricity use to ensure they remain within small-scale microgeneration rules. These on-farm projects are also subject to a capacity limit of 150 kW alternating current to qualify for favourable high export rates. Schroeder noted that a 150-kW array should produce a minimum of 190,000 kWh in southern Alberta. Schroeder estimated solar array installation costs $2 per W, or $2,000 per kW. He explained that 1 kW of solar capacity can produce 1,300 kW annually. When it comes to calculating the return on investment, he multiplies 1,300 kW annual production with a high energy export rate of $0.35/kW to provide a “best case scenario” of $455 income generation per year. If costs are $2,000/ kW to install 1 kwH of a solar production system, in this example, a farmer can expect their investment to pay off in just under four-and-a-half years. “This assumes a farmer is exporting everything they produce, which isn’t likely the case,” he said. “Most farmers will consume some energy before exporting the excess.” The typical payoff period, he said, is very manageable at four to seven years. Site selection also plays a role in project economics. While the ideal installation site varies by operation, Schroeder recommends choosing locations with enough space to accommodate the array and that are near existing electrical infrastructure such as a transformer to reduce the cost of installation. Common sites include Braden Schroeder of Badlands Electric has worked on multiple solar installations in southern Alberta. He said a farmer can typically expect investment in such projects to pay off in four to seven years.