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What Will YOUR System Cost? p. 22

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homepower.com
6
 of Solar-Electric System Costs
Making $ense

Scott Russell
©2005 Scott Russell

As Home Power’s marketing director, I spend a lot of time at fairs and

other events aimed at getting people interested in renewable energy.
Without a doubt, the question I get more than any other is, “What does
a solar-electric system cost for an average home?” Understandably,
these folks are looking for the sticker price of a grid-tied solar-electric
system, something to walk away with and compare to other home
energy or greener living “investment” possibilities.

The truth is, it’s not much easier to So how can you gauge your electrical appetite? For a
answer, “How much will a solar-electric quick snapshot of your electrical usage, check out your
system cost me?” than it is to answer, monthly electricity bill. Most bills will include KWH usage
“How much will it cost me to build a figures for the last twelve months; this will give you a good
house?” In either case, the answer has to idea of how much electricity your home uses each year.
start with two words—“It depends…” Once you’ve got a handle on your electrical appetite, taking
That’s because several variables influence the cost of a steps to improve the efficiency of your home will be your next
grid-tied solar-electric (photovoltaic; PV) system. Although best move. This can have a tremendous impact on the cost
there’s no pat answer to the price question, the guidelines of the system you install. Every dollar you spend on making
and examples here will help you estimate your costs, and your home more efficient decreases the cost of your system
get you started on your path to energy independence. by approximately US$3 to $5. (For more information, see
“Calculating Your Energy Appetite,” in HP102.)
How Hungry Is Your Home? A huge disparity exists between home sizes, efficiencies,
The average American home uses roughly 830 kilowatt- and personal electrical appetites, and there’s also a similar
hours (KWH) of electricity each month. But basing system gap in the efficiency potential of different homes. If you
costs solely on that number would most likely give you live in an efficiently built, well-insulated home, with
an inaccurate and unhelpful result. Your electrical use modern appliances, compact fluorescent lighting, and high
may vary wildly, depending on the season, what kind of performance windows, you may only be able to reduce
appliances you use, and your usage habits. your average electricity use by 5 or 10 percent. But if you’re

22 home power 109 / october & november 2005

 solar sense

on the other end of that spectrum, by

implementing efficiency measures you
may be able to reduce your use by
40 percent or more, shaving several
thousand dollars off the cost of your
system. For example, just replacing
an older model refrigerator with a
modern, more efficient one could
reduce your electrical usage by 50
KWH per month. Combine this with
household-wide efficiency strategies
and you can make a pretty sizeable
dent in your system cost.

Location, Location, Location

Where you live also affects your system
costs. Less sunny locales will call for
larger systems to generate the same
amount of electricity that a smaller
system in a sunnier spot can produce. In
the solar world, sunlight is measured in
units called “peak sun hours.” Phoenix,
Arizona, receives an annual average
of 6.5 peak sun hours per day, while
Seattle, Washington, only gets 3.7 peak A Sharp 175-watt solar-electric module, 62 x 32.5 inches. The author, 66.25 x 18.5 inches.
sun hours per day. To determine the
peak sun hours in your region, visit the
Renewable Resource Data Center’s Web site (see Access). A Place in the Sun
Besides the number of peak sun hours in your region, Even the sunniest regions won’t guarantee you good system
average annual temperatures where you live also affect your performance unless you have unobstructed solar access
system size, and its relative cost. In colder regions, you may at your site. This daily access to the sun is called your
use lots of electricity for space heating and water heating. In “solar window.” You’ll need a location on your rooftop or
warmer regions, air conditioning can dramatically amplify elsewhere on your property that:
your electricity use.
• Ideally faces south, but east- or west-facing arrays make
Climate and other site-specific variables will also
sense in some cases;
determine your solar-electric system’s size and its
production. PV panels operate more efficiently in cooler • Provides enough space for the number of PV
climates and less efficiently in hot ones. Some locations panels needed, possibly including room for expansion;
regularly receive morning fog or afternoon thunderstorms.
• Enables the entire array of modules unshaded
In dry, dusty climates without regular rains to clean the
exposure to the sun between the hours of 9 AM and
panels, accumulated dust and dirt will reduce the output of
3 PM, year-round.
the system. All of these variables need to be considered when
sizing a system and estimating its annual production. Compromising any of these three conditions can mean
having to increase the size of your system, which increases
its cost.
Sample Grid-Tied PV
A Nibble or a Bite?
System Costs (%) One of the best features of solar electricity is its
scalability. With a little foresight, you can start small
Misc.

Electrical Inverter
and build your system gradually if that better suits your
Rooftop 9% budget.
2%
PV Mounts
7% A starter system can be designed to meet just a portion of
your home’s daily electricity needs. This is one great benefit
PV Modules of a grid-tied system—the remainder of your electricity
Labor 70%
12%
can be purchased from your electric utility, just as before.
And, if you plan your design for future expansion, adding
more modules to your array as your pocketbook allows is
relatively simple.

www.homepower.com
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solar sense

Estimated System Costs Comparison

San Diego, CA Seattle, WA
Average monthly electricity use (KWH) 500 1,000 500 1,000
Portion of electricity from solar energy* 25% 75% 25% 75% 25% 75% 25% 75%
Average sun hours per day 5.7 5.7 5.7 5.7 3.7 3.7 3.7 3.7
Approximate system efficiency 0.70 0.70 0.70 0.70 0.70 0.70 0.70 0.70
Number of 175 W modules needed* 6 18 12 36 10 28 19 56
Total system size (W) 1,050 3,150 2,100 6,300 1,750 4,900 3,325 9,800
Roof space needed (sq. ft.) 85.9 257.8 171.8 515.5 143.2 401.0 272.1 801.9
Estimated system cost per KW (US$) 10 8 9 6 9 6 8 6
Price of installed system (US$) 10,500 25,200 18,900 37,800 15,750 29,400 26,600 58,800
State rebates (US$; excludes tax incentives) 2,940 8,820 5,880 17,640 0‡ 0‡ 0‡ 0‡

Cost after rebates (US$) 7,560 16,380 13,020 20,160 15,750 29,400 26,600 58,800

* Module counts are rounded up, since it’s not possible to install “fractions” of a module.
The result is that all of the examples will produce more than this nominal percentage.
‡ Washington State is currently implementing production-based incentives up to US$2,000 per year.

Free Money
Perhaps the most powerful impetus behind the exploding
popularity of grid-tied solar electricity is the availability Estimating
of generous financial incentives. In some states, rebate Installed Costs
programs refund as much as 60 percent of the system’s
installed cost to the homeowner! Illinois residents can The U.S. Department of Energy (DOE) estimates
recoup from 25 to 50 percent of their costs; New York’s PV that a 2 KW (2,000 watt) system costs US$8 to
incentive program pays up to 60 percent of total installed $10 per watt to install, while a 5 KW (5,000 watt)
costs; and Oregon homeowners can receive up to US$10,000 system can cost US$6 to $8 per watt installed.
in rebates. Add to that state tax credits and exemptions, and The actual cost of an installed system may vary
low-interest state loans, and the picture gets brighter still. widely depending upon installation complexity,
You can get up-to-date information on financial incentives location, component availability, and the size of
at the Database of State Incentives for Renewable Energy the installed system.
Web site (see Access).
Rated System Cost Per Installed
DIY or Go Pro Size (W) Watt (US$)
Whether to install your solar-electric system yourself or hire
1,000 to 4,000 W $8 to $10
a professional is a decision not to be taken lightly. Doing it
5,000 W+ $6 to $8
Even a small system can reduce your utility bills
while producing clean energy.
yourself can cut 15 to 25 percent from the total cost, but be
sure to realistically gauge your ability to design and install
an efficient, code-compliant, and safe system, and don’t
forget to consider what your time is worth. If you’re adept
at wiring and home improvement projects, and have the
considerable time required to learn the specialties of solar-
electric installation, you can join the ranks of homeowners
who successfully self-install. (For a list of recommended
tools, see “Tools of the Solar-Electric Trade,” in HP105.)
The vast majority of grid-tied systems are quickly
and competently installed by licensed professionals who
bring with them the experience to ensure a system design
that provides safe, maximized performance. Some rebate
programs require that a pro installs your system; be sure
to inquire. (For a directory of professional installers, see
Access.)

24 home power 109 / october & november 2005

 solar sense

Duluth, MN Atlanta, GA Boston, MA

500 1,000 500 1,000 500 1,000
25% 75% 25% 75% 25% 75% 25% 75% 25% 75% 25% 75%
4.4 4.4 4.4 4.4 5.1 5.1 5.1 5.1 4.6 4.6 4.6 4.6
0.70 0.70 0.70 0.70 0.70 0.70 0.70 0.70 0.70 0.70 0.70 0.70
8 24 16 47 7 21 14 41 8 23 15 45
1,400 4,200 2,800 8,225 1,225 3,675 2,450 7,175 1,400 4,025 2,625 7,875
114.6 343.7 229.1 673.0 100.2 300.7 200.5 587.1 114.6 329.4 214.8 644.4
10 7 8 6 10 7 9 6 10 7 8 6
14,000 29,400 22,400 49,350 12,250 25,725 22,050 43,050 14,000 28,175 21,000 47,250
2,800 8,000 5,600 8,000 0 0 0 0 4,200 12,075 7,875 23,625

11,200 21,400 16,800 41,350 12,250 25,725 22,050 43,050 9,800 16,100 13,125 23,625

Next Steps Calculate Your Costs

It’s easy to see why there’s no such
thing as a “one-size-fits-all” sticker Use this easy worksheet to figure out what a professionally installed
price for a solar-electric system, but solar-electric system might cost. If you have last year’s electricity bills
a little homework and understanding handy, grab them and your calculator, and get started!
your options both go a long way toward 1. First, figure the daily output needed from your PV system:
reliable planning and budgeting. To
Average Monthly Electricity Use ____________ KWH
give you an even better idea of the
costs involved, check out the Estimated x 1,000 [converts KWH to Watt-Hours] = _____________ WH
System Costs Comparison table x Percent ( _____ %)* of Monthly Electrical Use from PVs = _____________ WH
above, which compares the energy
÷ 30 days
production, efficiency, and costs of
two sizes of solar-electric systems in = Daily PV Output Needed _____________ WH
five U.S. cities. (*Example: for 25%, multiply by 0.25)
To take a first pass in estimating
2. Then, calculate the minimum system size [in watts]:
costs yourself, consider each of the
variables discussed above and Daily PV Output Needed [from Step 1] _____________ WH
determine the: ÷ Average Peak Sun Hours ( ______ hrs.) Per Day = _____________ W

• Average KWH used by your home ÷ 0.7 [for 70 % System Efficiency Factor]
each month = Minimum System Size _____________ W
• Peak sun hours for your location 3. Next, determine the number of PV modules you’ll need:

• Quality of your solar window Minimum System Size [from Step 2] _____________ WH

• Financial incentives, if any, ÷ Wattage Rating ( ________ W) of Chosen Module

available in your state = Number of Modules Required _____ Modules

4. Now you can figure the size of the system:

Use this information to fill in the
worksheet on the right to figure your Number of Modules Required [from Step 3; round up] _____Modules
approximate system size in watts. x Wattage Rating ( ________ W) of Chosen Module [also from Step 3]
Finally, project your costs based on the
= System Size [in Watts] _____________ W
sliding scale that specifies total cost per
installed watt. This will give you a rough 5. Last, find the approximate system cost:
cost projection from which to work. System Size [from Step 4] ____________ W
To get a better picture of what such
x System Cost Per Watt [from sidebar opposite] $______________
a system might cost you, two options
exist: phone a local professional for a – Rebates & financial incentives $___________
quote or work through the calculations = Approximate System Cost $___________
yourself. (Before you call, gather a

www.homepower.com
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solar sense

few of your recent electric utility bills for easy reference.) National Renewable Energy Laboratory (NREL) •
The pros know what questions to ask and the relevant http://rredc.nrel.gov/solar/pubs/redbook •
data for your geographic location, and should be able to Solar insolation data •
provide a preliminary estimate by phone. An on-site visit http://rredc.nrel.gov/solar/calculators/PVWATTS •
will be necessary before they can give you a firm quote, PVWATTS calculator
and get you on your way to making some or all of your
Directories of Solar-Electric System Installers:
electricity with clean, renewable energy.
Home Power’s Installers Directory, see page 124 or visit
Access www.homepower.com/resources/directory.cfm
Scott Russell, Home Power, PO Box 520, Ashland, OR 97520 •
www.renewableenergyaccess.com/rea/market/business/
[email protected] • www.homepower.com
home
Database of State Incentives for Renewable Energy •
www.seia.org/about/statechapters.asp
[email protected] • www.dsireusa.org
Renewable Resource Data Center •
http://rredc.nrel.gov/solar/old_data/nsrdb/redbook/

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26 home power 109 / october & november 2005