THE INSTALLATION COSTS OF A HOME SOLAR POWER SYSTEM


Logo

WHAT AFFECTS YOUR PRICES



A solar electric (photovoltaic) power system allows you to reduce the amount of electricity you buy or even sell its excess back to the utility. It also makes you less vulnerable to future price increases, and reduces air pollution.
However such a system requires a substantial initial investment. The prices of a PV system depends primarily on its output peak power rating. That's why its cost is usually compared in terms of dollars per watt.

Currently, the installed costs of most complete residential PV systems vary from $5 to $10 per watt (which is $5,000-$10,000 per kilowatt) before any financial incentives or tax credits. That includes the panels, inverters, wiring, hardware and labor. The actual number depends on the manufacturer, retailer, installer, as well as your system's configuration and equipment options. It also varies widely across states (see below the distribution of prices by states). The per-kW rates are the highest for smaller systems (≤2 kW): $7.7/W in average. Larger systems run in average for $6/W. More than half of this amount is driven by the cost of PV panels. A battery based backup system costs about 20-30% more than a batteryless one. Various federal, state and utility incentives can offset half of the above installation expenses. With all the incentives it may take less than ten years to reach a break even point.



ESTIMATING THE SYSTEM's SIZE, PRICE AND PAYBACK


Powered by SolarEnergy.net


This solar system cost calculator helps you estimate the size and cost of a PV electric system in your area. Note that it provides only a rough estimate, and may not necessarily take into an account all current federal, state, or local incentives and rebates. Also, the estimations do not include a possible roof reinforcement which may be required.

To use the calculator you need to decide what percentage of your average electricity usage do you want to meet with your solar system. You may choose of course to generate all of your electricity with the sun, however this will result in an over-sized system and may not be the most cost effective solution. Most homeowners which are connected to an utility grid, install a smaller system to meet most of their power needs and rely on the grid for the times of peak energy use. According to National Renewable Energy Laboratory of U.S. Department of Energy, an average US home can meet 80% of its electricity needs with a 2-kW system. The estimated price in this calculator is based on an average price of an installed residential PV electric system rated above 2 kW before incentives. At present it is about $6,000/kW. This chart shows you the distribution of solar installations in $/W by states.

Cost of solar power by states The calculator estimates your solar power system break even time and monthly saving. It also tells your for a reference how much carbon emissions your current electricity usage generates. The break even estimation assumes of course that your system will not need any repairs.

Right now there are companies that offer in many states free installation and maintenance of grid tie solar systems. I understand the way they can give you a free system is they collect federal and state incentives otherwise payable to you. Then of course, the solar company will be charging you for all your PV electricity for the next 20 years or so. The initial PV rate is usually set just slightly below your current utility rate (typically, 10% below), so at the beginning the saving is very minimal. Then, if utility rates grow faster than the solar rates, your saving will grow likewise. However, if it increases slower than PV rates you pay-- you may loose. This may be an unlikely scenario, but you just have to be aware of it. Also note that with these programs you don't own the system-- you lease it for 20-25 years. At the end of the lease you will have an option to buy it, but 20-year old panels may not be very useful.




References and additional information:
The installed cost of photovoltaics in the U.S. in 2012
The database of federal, state, local, and utility incentives for renewable energy