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Frequently Asked Questions - Financial

Are Alternative Energy Sources recommended for private homes ?

What is “ payback period “ ?

What is the payback period for commercial or industrial buildings ?

Do the systems have to be purchased ? or can they be leased ?

What about investors ?

Can I sell the electricity back to the OPA under a FIT contract ?


Are Alternative Energy Sources recommended for private homes ?

While there are some excellent “do it yourself” hobby systems for private use, the economics of ‘private’ electricity are still largely unjustifiable. Because homeowners are still receiving highly-subsidized electricity, a well-designed and reliable system for the home would probably not pay itself off ( at today’s electricity purchase rates ) for 30 years or more.  Even in Ontario, with a very high Feed In Tarrif ( FIT ), the economics for home-grown electricity are questionable.  For home use, solar hot-water heating and also ground source heating/cooling seem to be the best bets - please see your yellow pages for a dealer near you.

On the other hand, commercial and industrial customers will see about an 8-year payback – they will be paying much more for electricity starting this year, and they will be able to take advantage of tax breaks and other incentives for which a private homeowner doesn’t qualify - Yet.!


What is “ payback period “ ?

Payback refers to how long will it take for the savings to offset the cost of construction.

 In a Hybridyne Behind the Meter ( BTM ) System, the savings consist of :

- money saved on electricity not purchased from the grid

- money saved by being able to buy electricity at much lower rates

- tax savings and incentives on the construction itself,

- ongoing incentives for the electricity generated by a ‘green’ solution.

NOTE - our estimates of payback are, in part, based on predictions of prices and incentives.  For example, we have assumed that electrical prices will increase by only 3.5% per year over the next 20 years - this is probably very conservative.

Our estimates also make assumptions about the tax structure of the typical client who is able to take advantage of CCA and other tax benefits - please speak to your accountant about your specific tax situation.

 


What is the payback period for commercial or industrial buildings ?

Because the federal and provincial governments are determined to protect the environment and are concerned about having enough electricity go ‘go around’, they are offering significant financial incentives which coupled with the actual energy savings, allow Hybridyne Systems to generally pay themselves off in 508 years, and produce virtually free electricity for decades after that.

Commercial and industrial electricity consumers, are faced with dramatically rising energy costs, and should be concerned about power quality and uninterrupted availability.  A Hybridyne System built ‘inside the fence’ will generate electricity silently and cleanly for decades – freeing the consumer from concerns about Energy Inflation©, and providing Energy Independence©

 

Do the systems have to be purchased ? or can they be leased ?

While the normal position is that the owner of the facility which is powered by the Hybridyne Systems is also the owner of the generating equipment, some purchasers are finding advantages in a lease arrangement.  Hybridyne's Financial Department can advise you on the best approach for your particular situation - please Contact Us.

What about investors ?

Especially in the case of HPG's Energy Parks©, there is a significant investment opportunity.  Because Hybridyne Systems generate electricity by using Renewable Energy, they are subject to classes 43.1 and 43.2 Capital Cost Allowances, which can 'flow through' to investors at a faster than normal rate.  Thus an investor can realize very significant tax savings in addition to a very large ongoing income.  Please Contact our Financial Department for an explanation of the income potential, or to inquire about currently open "funding consortiums" which may be offering "Investing Units".

Can I sell the electricity back to the OPA under a FIT contract ?

Ontario's Feed In Tarrif is designed to encourage private enterprise to build Renewable Energy powered generators specifically to provide power to the Ontario grid.  The generating systems are therefore intended to be largely dedicated to that purpose, although there are some provisions for Behind the Meter Systems.

The tax implications of the two types of systems ( BTM versus grid supply ) are very different, however.

  • A Grid supply system is entitled to receive accelerated CCA's applied ONLY to the earnings of the system itself ( not the corporation on whose roof it sits ).  Thus, if a grid supply system earns $300,000 per year and the company earns $10M, the CCA's are applied only to the $300K.
  • A Behind the Meter system is also entitled to receive accelerated CCA's, but those CCA's can be applied against the total earnings of the corporation ( the $10M in the example above ). In order to earn those CCA's, the electricity generated must be used 'substantially' ( that is, at least 90% ) by the corporation, and not sold.

On balance, therefore, it is largely inappropriate to sell electricity generated by a BTM.