THE INSTALLATION COSTS OF A HOME SOLAR POWER SYSTEM

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WHAT AFFECTS YOUR PRICES

A grid-tie solar (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, as well as reduces air pollution.
However, obviously, such a system requires a substantial initial investment. The prices of a PV system is a function primarily of 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 $2.8 to $5 per watt (which is $2,800-$5,000 per kilowatt) before any financial incentives or tax credits. That includes everything: 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 chart of prices by states). The per-kW rates are the highest for smaller systems (≤2 kW): $5/W in average. Larger systems run in average for less. 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, however they provide you with certain power backup during night hours or when sunshine is not sufficient. Various federal, state and utility incentives can offset a part of the above installation expenses. With all the incentives it may typically take less than ten years to reach a break even point.

ESTIMATING THE SYSTEM's SIZE, PRICE AND PAYBACK

This third party solar system cost calculator gives you a rough estimation of your cost and monthly saving in your area. Note that it may not necessarily take into an account all current federal, state, or local incentives and rebates. Also, the cost estimations do not include a possible roof reinforcement which may be required. Either way, I don't have any control over their results and assume no responsibility of their accuracy.

Most homeowners which are connected to an utility grid, install a smaller system to meet their average 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. This chart provides the distribution by states of the average installed cost of complete home solar system. At present the U.S. national average solar installed cost is around $3,900/kW as you can see from the state by state cost chart just released by Berkely Lab.

Right now there are many solar lease programs in many states- the companies offer 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 the old panels may not be very useful because their typical life span is 20-25 years.