This is meant to be a basic primer on the costs of Solar panel (Photo Voltaic) systems, and is by no means an exhaustive guide. I’ll update stats and numbers as they change. These numbers just cover the cost of the systems, and not installation. The graphs cover the costs of the system, and below I’ve supplies info on Federal and State rebate/credit programs. A good portion of the costs of a system can currently be reduced if all the rebate programs available are taken advantage of. How long these incentive programs will last is unclear.
A few things to consider: First, how much direct sunlight you receive. Some northern cities (ie Seattle, Chicago) may only receive an average of 3 hrs of sunlight per day, while others may average 5, 6, even 7 a day (ie Arizona). The more direct the sunlight that is received, generally the smaller and cheaper the system that is needed. Second, where will your panels be facing? Ideally they’ll face south, as that will optimize the sunlight they receive. They can run East/West, but this will reduce their efficiency by 10-20%. Solar panels facing north would be essentially useless. Remember these facts when you are planning on installing solar panels.
All right, on to the costs. The costs of solar panels are always changing- these numbers were accurate as of late 2011. I will try to keep them updated as often as I can.
THE ESTIMATED COSTS OF AN ON-GRID SYSTEM
On-grid systems are systems connected to the power grid. When you’re producing an energy surplus (during the day), you feed the excess power back into the grid, and are compensated (paid) for it. When you’re producing an energy deficit (night time), you take energy off the grid, and pay for it. It is possible to have no energy costs, or to even make money, with a large enough system/low enough energy use.
Here is a very general, ballpark estimate of the costs of various systems. System Watts/hr are the average watt production per hour the system produces.
Monthly Output (kWh) is the average monthly output expected. Divide by 730 (hrs per month) to find the kWh produced.
|System Watts/hr||1400 to 2000||2000 to 2800||3500 to 4250||5500 to 9500|
|Monthly Output||180 to 270kWh||230 to 280 kWh||480 to 575 kWh||780 to 1280 kWh|
|$4000 to $6000||$6000 to 7500||$9000 to $11,000||$15,000 to $25,000|
To really know how much power you need, you should contact your energy provider or have a quote done. But as a good rule of thumb, the average American household uses 1 kW/hr, on average. Since there’s 730 hours in a month, an average American household would need a 730 kWh system to produce as much energy as it uses.
There’s obviously more to it than this- larger houses or greater energy use will require more energy, energy use will be greater in months you run air conditioning, colder/cloudier climates may require larger systems while hot/sunny climates will need smaller systems for the same output, etc. But this is a good start.
THE ESTIMATED COSTS OF AN OFF-GRID PV SYSTEM
Off-Grid systems are independent from the grid, and as such much produce all of their own energy requirements. They are a little more difficult to estimate because of all the variables involved. As a starting point, you need to estimate your power needs on an average mid-winter day. You need your system to produce a minimum of this, and it obviously changes depending on how close you are to the equator.
Another thing to consider is that off-grid systems need a battery system to store the power for off-times. A backup generator is also a very good idea, for extended dark periods. Both of these will increase the cost of the system. You also you won’t be receiving feed-in tariff money from selling your power back to the grid, which boosts your overall cost as well.
|System Watts/hr (DC)||250 to 400||400 to 750||750 to 1250||1250 to 2000||2000 to 3500||3500 to 4500||4500+|
|Monthly Output (kWh)||38 to 60||60 to 113||113 to 188||188 to 300||300 to 525||375 to 675||675+|
|$2000 to 2750||$2750 to 5000||$5000 to 8500||$8500 to 13,000||$13,000 to 17,000||$17,000 to 22,000||22,000+|
INCENTIVE PROGRAMS FOR SOLAR POWER IN THE US
There are various incentive programs at the Federal and State level available to cover part of the cost of installing solar panels. Some are tax credits, a reduction in income taxes equal to a percentage of your installation cost. Others are a $/watt rebate, refunding some of the price per watt you pay for your energy.
The Federal government offers a 30% tax credit off of residential and commercial systems through 2017, for the gross cost of the system before installation. It doesn’t need to be permanent residence. The credit can be subtracted from the other taxes you owe, and can be carried over into future years.
At the state level, there are a myriad of various credit and subsidy schemes. It is beyond the scope of this site to detail them all, but below we’ve included a few large states with good systems as a starting point.
To learn about your states solar programs in more detail, check out this great resource: http://www.dsireusa.org/
New York- Offers a $2.50/watt rebate on up to 4kW sized systems, $1.50 for 4-8 kW systems. The total rebate can’t exceed $24,000.
Residents also get a 25% tax credit of net post-rebate cost, up to $5000 off of their NY state income tax.
Massachusetts- Offers a local property tax exemption is available for up to 20 years. Solar and wind systems are exempt from state sales tax if the systems are on the individual’s principle residence. There is also a state income tax credit of up to $1000.
Illinois- Offers a 30% rebate of up to $10,000 is available for systems with a design capacity of greater than 800 watts or containing over 60 square feet of solar collectors.
Georgia- Offers a program that gives payment for connecting a residential system to the grid, plus a $0.15 credit/kWh rebate for 10 years. It was also the first state to create laws to accommodate a net metering benefits program for green power.
Arizona- Offers a rebate system for on grid residential systems of $4/W up to $7000. Off-grid systems get a $2/W rebate. There’s also a $700 rebate for solar water heating.
California- Offers many rebate and incentive programs. Some are as good as a $3.50 per watt rebate up to $8,000 (Pasadena Water and Power).
On top of these costs, you will be looking at installation costs as well, which will be roughly an extra 10-20%.
Good luck and stay prepared!