THE INSTALLATION COSTS OF A HOME SOLAR POWER SYSTEM

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. 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.

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 oversized 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.
The calculator also gives you solar power 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. Note that at this moment there are programs that offer free installation and maintenance of a grid tie solar system. However, with these programs you don't own the system-- you lease it for 20 or so years and you keep paying fixed amount per month for all these years regardless of how much energy it produces. At the end of the lease you will have an option to buy the system, although 20-year old panels are not very useful.

References and additional information:
The installed cost of photovoltaics in the U.S. in 2011/2012
The database of federal, state, local, and utility incentives for renewable energy