Solar Cost – How to Calculate It?
What is the cost for installing a solar power system? We all know that solar panels cost can take up to 50 – 60% of the total solar home cost people have to pay, however the cost of solar panels have been significantly reduced in 2009 and some experts expected the price to go down further this year. The number of solar residential has been increased in some States but some people are still reluctant to follow because they can’t figure out what is the real cost of solar power they have to pay. Many will ask questions like “How much does solar power cost for a 4800 square foot house?”
The answer to this question is actually depends on some factors:
- Where they live
- Total sun hours they get every day
- Total electricity they use every day
- Total solar electricity they want to make with the system
- Solar rebates and tax incentives (if applicable)
- Grid-tied or off grid (with solar batteries) option
We don’t need to 100% substitute the utility power with solar electricity because it really depends on how much money we are willing to spend on the solar electric system in our house. To help you calculate the solar price NREL has an online calculator set up for this purpose.
To use the calculator you have to look at the KWH on your monthly bill and divide the number by 30 to get the average daily kWH. the next step is to find out the yearly average of full sun hours in the area you are living. Divide the daily kWH by the average full sun hours and it will give you the ideal kW Array you need to 100% use solar generator to power your house. Ideal condition doesn’t put efficiency losses (irradiance, dust, temperature, and wiring) into calculation so you are advised to divide the kW Array by an efficiency factor (say 75% or 80%) to compensate the energy loss.
kW Array needed to 100% power your house with solar electricity will be:
((Monthly kWH / 30) : Yearly Average Full Sun Hours)/ Efficiency Factor
Depending on your budget you can always choose to use solar panels to cover 100%, 75%, or 50% of your total electricity bill so it doesn’t necessarily have to be 100% coverage.
The next step is to multiply the kW Array with the installation cost ($8 – $9, depends on the state you are living for the system that is less than 10 kW). Note that kW means 1000 W so you have to multiply the kW Array with 1000 before calculating the total solar energy cost.
Solar Rebates and Tax Credit
You don’t have to fully pay the huge investment from your own wallet because many States have excellent solar incentive programs which you can find at www.dsireusa.org. To make solar panels more attractive any solar PV system installed after Jan 1, 2009 is eligible for a 30% Tax Credit. Now that’s a huge saving!
All of the calculation above will give you an estimate of solar cost for the grid-tied solar electricity system. If you are looking for off-grid option be prepared to pay around 30% higher because you will have to purchase solar batteries to store the electricity created by those solar panels.
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