One of the main questions consumers ask when considering solar power system installation is the initial cost. As one of the only real “disadvantages” of solar power, cost is a reasonable question. While each system is different, there are some general averages available to give you an idea of what solar power might cost you. Keep in mind the initial cost does not take into account the incentives you’ll receive from the government and other sources, including a 30% tax credit, or the savings you’ll enjoy on lower electric bills for life. As technology advances, the price of solar power on the consumer level is expected to drop.
The Cost of Solar in the Average Home
It’s difficult to make an exact estimate on how much solar power will cost you until you obtain a quote from a company in your area. However, you can get an idea by comparing your energy use with the average household. The average home uses about one kilowatt (kW) of energy per hour. The price of one kW per hour (kWh) varies in different states – it’s as low as $0.07 in West Virginia and as high as $0.24 in Hawaii. The average cost is $0.10 per kWh. At this average, a homeowner spends about $73 per month (730 hours x $0.10 kWh) on electricity.
Appliances such as computers, gaming consoles, and air conditioners can significantly increase your average cost per month. Adjust your own home’s average accordingly. A solar panel’s energy-generating capacity is 10 watts per square foot, conservatively. This equals an average panel conversion efficiency of 12%. This means the average homeowner would need to install about 100 square feet of solar panels to power the entire home – if the sun shone for 24 hours per day.
Consider the amount of cloud cover your location sees on a typical day. The length of the day changes with the season too. Conduct a simple Google search to learn the average hours per day you can expect the sun to shine based on where you live. This will decide about how many square feet of panels you’ll need to harness enough energy to power your home.
Type of Solar Power System
Once you know how many square feet of panels you’ll need, find out if your utility company allows net metering or if you need an off-grid system. Off-grid systems are necessary for homes in remote locations with no electrical services. These solar power systems use batteries, and cost more to install than net metering systems. Your utility company will help you design a battery bank for your specific needs, and the price will vary.
Net metered, or grid-tie solar installations, connect to your company’s power lines. In this setup, your utility company “buys” any excess power your home generates but does not use, giving you credits on your energy bill. In a season where you need more power, your home will draw from the energy grid. You never pay for energy you don’t need. You can also choose a combination of the two – a grid-tie system with a backup battery bank – for continuous power. For a system size of 1,000 to 3,600 watts of energy, the average price ranges from about $3,000-$7,250 before the 30% federal tax credit. Here are a few other average prices:
- 6kW of energy: $15,600
- 8kW of energy: $20,700
- 10kW of energy: $26,000
These prices represent averages after taking the 30% tax credit out. There are several calculators available online to give you a more accurate quote of what a system would cost in your location and for your energy needs.
Incentives and Savings
While the initial cost of a solar power system may seem hefty, there are plenty of incentives and rebates available to consumers who choose this route. The 30% tax credit will be available until 2023, and possibly longer if Congress decides to extend the timeline again. Many states and counties also offer other enticing rebates. Rhode Island, for example, has a statewide solar grant that pays homeowners for generating electricity. Leasing and financing options are becoming more easily available, and are the preferred way to pay for the system in most cases.
Over your lifetime, a solar power system has the potential to pay for itself a few times over. The system has an average 25-year lifespan, through which time you can enjoy tens of thousands of dollars in energy savings depending on your location. California residents save about $28,000 in 20 years, while Hawaiian residents can save as much as $64,000 in the same amount of time. The initial price of solar power is well worth the investment for residents around the globe.