Solar Panels cost calculator
	Case A	Case B
Size of the System
Energy generated per month, average ?	kwh	kwh
How much of your needs to supply ?	200 175 150 125 100 80 70 60 50 40 30 20 10 %	200 175 150 125 100 80 70 60 50 40 30 20 10 %
Energy generated per 1 kWp of system ?	135 kWh/mo. (sunny) 120 kWh/mo. (average) 105 kWh/mo. (cloudy)	135 kWh/mo. (sunny) 120 kWh/mo. (average) 105 kWh/mo. (cloudy)
System size needed	kWp	kWp
Cost of the System
Rate for full installation ?	$4 $5 $6 $7 $8 $9 $10  / watt	$4 $5 $6 $7 $8 $9 $10 / watt
State / City rebate ?	$4.50 $4 $3 $2.50 $2 $1.90 $1 none /watt	$4.50 $4 $3 $2.50 $2 $1.90 $1 none /watt
Federal tax credit ?	yes no	yes no
Installation cost ?	$	$
Less state / city rebate ?	($)	($)
Less tax credit ?	($)	($)
Net installation cost	$	$
Cost of Solar Panels in perspective
Current cost per kWh	April 2008 data, AVERAGE! ---------------------- 23¢ (HI) 19¢ (CT) 18¢ (NY) 17¢ (AK) 16¢ (MA,ME) 15¢ (NH,RI,VT) 14¢ (DE,NJ) 13¢ (CA,MD,NV) 12¢ (U.S. National Average) 12¢ (TX) 11¢ (DC,FL,IL,PA,WI) 10¢ (AL,AR,AZ,CO,IA, 10¢ LA,MI,MS,NC,OH,SC) 9¢ (GA,IN,KS,MN,MT, 9¢NM,OK,OR,TN,VA) 8¢ (KY,MO,SD,UT,WY) 7¢ (ID,ND,NE,WA,WV)
Cost of the solar system	$	$
Cost of grid electricity over 21 years ?	$	$
Payback time for the solar system ?	years	years
Monthly cost for solar system    (20-year loan @ 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% interest)	$	$
Price per kWh over 21 years ?	¢ / kWh	¢ / kWh
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Solar electricity:
Finally affordable!

June 2010

How much does a solar system cost?

A system big enough to supply energy for an average home (920 kWh/mo.) will cost $2,400 to $79,000. That compares to $63,000 the average household would have spent on average for dirty electricity over 21 years (assuming that electrical costs rise at an average of 4% per year).

Yes, that's quite a range in prices. The price is affected by tax credits, rebates, local prices in your area, and how much sun you get. Since everyone's situation is different, the calculator at right will help you figure the costs for your particular situation.

What you'll see is that in many cases, solar is affordable right this very minute. If the calculator shows that your price per kWH is less than what you're currently paying per kWh, then solar is an excellent deal and I recommend you explore it. If your price per kWh is over what you're currently paying, then consider whether you're willing to pay a premium to go green. Most people who have gone solar so far have paid a little extra in order to get their energy without pollution; the environment was their concern, not money. But as solar is becoming cost-competitive with dirty energy, people are indeed saving money by going solar.

Realize that you don't have to get a system large enough to generate as much as you use. You can start out with a system that generates 80%, 50%, 25%, or even just 10% of your needs to lower your cost. And a 10% reduction in pollution is better than 0%.

The 30% federal tax credit is what suddenly made solar a lot cheaper. Before 2009 the tax credit was limited to $2000. But now there is no limit. So if you install a $40,000 system, you lower your tax bill by $12,000. The credit is 30% of your cost, after any state/local rebates you get. (Case A in the calculator assumes a rebate, so the tax credit in that example is lower.) Note that a tax credit is more powerful than a tax deduction. A deduction just reduces the amount of your income, on which the tax is based. But a tax credit comes directly off your total taxes.

State and local rebates can be even more powerful than tax credits, but they're not available to everyone. Here are some sample rebate programs:

• Arizona: $2.50 - $3.00 / watt
• California: $1.90 - $2.50 / watt
• Colorado: $2.00 - $4.50 / watt
• Texas (Austin): $4.50 / watt
• Databases of rebate programs: RecSolar, DSIRE

If you don't have spare thousands of dollars lying around, you can always finance the purchase (i.e., get a home improvement loan). And if you're in California, you might be able to rent a system by the month instead of paying a ton of money up front. Did I say rental...?

Yes, you might not have to buy a system outright. A number of companies are now renting solar systems to California customers, so you just pay a monthly rate and don't incur huge startup costs. I'll cover rental programs below.

Those versed in finance might complain that I'm not considering opportunity cost, or the time value of money. They might say you could take the money you would have spent on solar and invest it, which earns a return, so the relative cost of solar is thus higher, because you had to pay all the money up front. What that idea misses is that solar is also an investment: You're locking in your cost for electricity for 21+ years, and buying yourself out of inflationary increases for the price of energy. If you could get 6% a year with outside (non-solar) investments but you have to pay 4-5% more for electricity each year, then your investment returns are negligible when weighed against the extra electric cost, and thus the kWh costs I just quoted for solar are still pretty accurate. In fact, you might do even better with your solar investment -- in 2008 dirty electricity costs went up by about 8%. And while the calculator assumes there's no opportunity cost, it also assumes that electricity rates won't rise. In effect, these pretty much balance each other out.

Incidentally, the average price for naked solar panels is $2.49 per watt ($2490 per kWp), and the installed cost is $5 to $9, without batteries. (Batteries are unnecessary and just increase the cost; it's easier and cheaper to just stay connected to the grid. More on that later.) (prices for naked panels from EcoBusiness; also see PV Insights and SolarBuzz; installation cost of +$2.25 to $5.50/watt from SolarPower.org, 2009)  4.00 - 9.00

Price per kWh	Source of Electricity
36¢	Grid energy, Hawaii
34¢	Solar, worst case ($79k install, no rebate, no tax credit)
23¢	Wind turbine, 9mph avg. wind ($3942 installed cost plus maint. less tax credit, 71 kWh/mo.) (e.g. Austin/Dallas/San Antonio TX, Mobile AL, Baltimore, St. Louis, S.F., Denver, SLC, Wilmington DE, D.C., Miami, Boise, Topeka, Cincinatti, Lexington KY)
19¢	Grid energy, Japan
17¢	Grid energy, Alaska
16¢	Solar, average case    ($38k net cost; $54k install less $16k in tax credits and rebates)
12¢	Grid energy, U.S. average
10¢	Wind turbine, 12mph avg. wind ($3942 installed cost plus maint. less tax credit, 158 kWh/mo.) (e.g. NYC, Boston, Buffalo, Milwaukee, OKC, Corpus Christi TX, Lubbock TX, Wichita KS, Hawaii)
1¢	Solar, best case    ($2k net cost; $34k install less $32k in tax credits and rebates)
Sources & Notes: Prices last sourced or calculated Dec. 2008. Grid energy prices for U.S. from DOE, for Japan from OECD. Solar systems are 1 kWp in size. Solar and wind systems expected to last for 21+ years. Solar tax credit is 30% of installation cost after rebates. Wind turbine price of $2775 from Sundance Solar, +$86 shipping +35% installation +2% annual maintenance. Wind tax credit is $1000 per kW of nameplate capacity. I don't list rental programs like SolarCity Sun Run in the table because those companies don't bother to provide any sample pricing on their websites. As soon as they're willing to stop being annoying and clueless, I'll list them here.

Why solar is finally affordable

Before now the biggest problem with solar systems was the huge upfront cost. The next problem was that even after 20 years, you wouldn't make your money back. That left solar only for people who were willing to shell out the extra cash required to go green. This explains why only 0.1% of U.S. energy comes from solar as of 2008. (source) For global energy it's even worse -- solar provided only 0.02% in 2004. That's not two percent, that's two-hundredths of a percent. (source)

But solar is finally affordable in many cases . Here's why.

1. Solar gets cheaper every year. It's not just that every year solar gets a little cheaper. It's also that every year dirty energy like oil and gas gets more expensive. And while that's always been true, what's special about now is that in many cases those lines have already crossed, making solar cheaper than dirty energy. Solar costs have gone down by an average of 3.5% per year from 1998 to 2007 in real dollars. (source)
   
   
2. New tax credit. Before 2009, U.S. the tax credit for installing solar was limited to $2000. But now there is no limit. The credit is good for 30% of the system cost, after rebates. This tax credit is more powerful than a tax deduction. A deduction simply reduces your taxable income, while the credit reduces your tax bill directly. In plain English, a $10,000 tax credit reduces your taxes by $10,000. A tax deduction reduces it by only $1500 to $3500, depending on which tax bracket you're in.
   
   
3. State & Local rebates. Rebates for installing solar have been around for a while, but only recently has the cash back been significant -- enough to often make it solar a good deal as well as a good environmental choice. A $3 billion plan in California unveiled in 2005 aims to put 3,000 megawatts of solar energy on 1 million homes, businesses and public buildings over 11 years. And in Austin the rebate from the city for homeowners who go solar is $4.50 per watt. Systems generally cost $6-10/watt to install, so the rebate covers 45%-75% of the system cost. For a small 1 kWp system on the low end, that's $6000, less the $4500 rebate, for a net cost to the consumer of $1500. Have a look at the table at right and you can see the power of rebates in full force. And remember, even after rebates you still get a 30% tax credit.
   
   
4. Rental Programs. At least three different companies offer rental programs which let you rent the panels for a fraction of the cost of buying the system outright. Another attractive benefit of rental programs is that you're not responsible for maintenance. If something breaks, the company fixes it for free and you don't have to worry about it. Here's how the different residential rental programs stack up.
   
   

   Company	Service area	Minimum use required	Min. Upfront Cost	Availability
   SolarCity	California only	~1250 kWh/wo.	$2000+	Now
   Sun Run	California only	~1250 kWh/mo.	$6000+	Now
   Citizenre	USA except not AK, AL, KS, MO, MS, NE, NV, SC, SD, TN, WV, and Austin, TX	~250 kWh/mo.	$500 deposit (refundable)	2011 at earliest

   
   
   All these solar rental programs are very new, and I predict solar rental programs will be The Next Big Thing in solar, or energy production itself for that matter. Lots of companies will be offering this type of thing in the very near future.
   
   Note that Citizenre is just an idea at present. The company hasn't yet secured financing to build its manufacturing plant, and it's anyone's guess when if ever they'll be able to do so.

   
   SunEdison offers a commercial rental program for business customers.
   
   

5. Film-based solar cells. A company called Nanosolar has developed a method to make solar cells at a much lower cost. Instead of making big, expensive silicon cells, their method involves printing a very thin, flexible film. This makes solar power cost-competitive with electricity from the grid. The founders of Google were so excited about this breakthrough that they invested in the company. Nanosolar is actually producing product now (this isn't just a pipe dream), but as I write this product is sold out through 2009. (More from Technology Review and the manufacturer) A similar technology is dye-sensitized cells, which are supposed to be 1/10th the cost of traditional cells, but there's no word yet on when they'll go into production.
   
   
6. Plastic solar cells. Like Nanosolar, STMicroelectronics came up with an alternative to expensive silicon cells. Their solution involves making cells out of plastic. It's not nearly as efficient as silicon, but it's a whole lot cheaper to produce. Something like twenty times cheaper. Suddenly this makes solar cost-competitive with the grid. There are two downsides: One, because the new cells are less efficient, you need a lot more space to produce the same amount of electricity as with conventional cells. Most homes barely have have enough roof area to generate all their electricity from regular solar cells, and with the less efficient cells, it's unlikely that a house could go solar for all its needs. (It could certainly augment its grid usage, though.) And two, these new cells aren't available to consumers yet, but I'm guessing they'll be available by 2010. (More from CNN and the manufacturer)
   
   
7. Trackers & Mirrors. This is an old idea but it's taken a while for anyone to make it easy and cheap enough: Use motors to keep slightly moving the panels to keep them aimed directly at the sun, and use lenses and mirrors to concentrate the sun's energy. And motors and mirrors are a lot cheaper to make than solar cells. Many of these products are available now. (Example: Energy Innovations)
   
    

Sungevity: Only slightly cheaper

Readers have been asking why I haven't listed solar system retailer Sungevity on this page, so here's the explanation: Their systems aren't so much cheaper that they make solar affordable. They're about 10% cheaper than competitors' systems, but that's not enough to suddenly make a huge difference. Their 1.5 kWp system costs $7500 and will save about $292 a year in electric costs, making the payback time 26 years -- longer than the projected life of the system. Even then, it's only available to California residents. Still, if you're in California, and you prefer to buy instead of using one of the rental programs mentioned above, then Sungevity will likely give you the best price. You can also get a nearly-instant quote on their website, since they use satellites to check out your roof remotely to calculate how suitable it is for solar.

 

How does a solar energy system work?

A complete system consists of:

• Solar panels
• Inverters, which convert DC electricity into AC
• Service panels to tie the output to your home's wiring, and to let you send excess electricity back to the utility

A system could also have batteries to store extra electricity. This would allow you to live completely off the grid if your system were big enough and if you were good at conservation. But it also increases the cost and maintenance requirements substantially, so I recommend you pass on the batteries. It's easier just to send the excess you generate back to the utility and get paid for it.

With a battery-less system, sometimes you'll be using grid energy and sometimes you'll be using solar energy. Here's a chart showing a hypothetical system:

• Red bars. At night when the sun's not shining, you'll be getting your electricity from your local utility.
• Green bars. During the day, your system will make some electric and you'll use it right away.
• Yellow bars. During the day you'll make more electric than you need, and you'll sell that back to the utility.

So as long as you're still connected to the grid, the size of a system is kind of arbitrary. You could have a tiny system that simply fuels part of your needs with green energy, or you could have a massive system which still won't fuel all your needs, because it won't run at night.

 

How much roof space is required?

How big a system do I need?

Annual average daily solar radiation per month (using a flat-plate collector facing south at a fixed tilt equal to the latitude of the site, which maximizes input). The scale is the same for peak sunlight hours. For example, yellow-shaded areas get an average of 5 to 6 hours of peak sun per day. (from NationalAtlas.gov)

The size of your system is arbitrary -- you can pick any size you want. That's because in most cases you'll still be connected to your utility, so you don't have to try to generate 100% of your needs 100% of the time. You can get a smaller system to supply 80%, 50%, or just 15% of your needs, which lowers the system cost. Even with a small system, you're still reducing the amount of pollution being generated at the power plant, because you'll be using less of their electricity. You could also go the other direction, getting a system to make 150% or 200% of your needs, selling the excess you generate back to your utility company. The point is, the size of your system isn't something you figure with a calculator, it's your own personal preference.

If you want to go completely "off the grid" -- that is, disconnect from your utility company -- then the cost of installation soars. The first thing you have to add is batteries, to store excess energy during the day so you can use it at night. Then you need a huge system, to make and store lots of extra energy to use for other times when the sun doesn't shine. For most people there's no need to go this route -- you can just remain connected to the grid, and then get any size system you want.

Many people size their system to match the amount of electricity they use, even though sometimes they'll be getting some of that energy from the grid, and sometimes they'll be sending excess that they generate back to the grid. See the previous section for more on that. Let's say you want to go that route: How big a system do you need? Here's a rough estimate, based on a typical house.

Rough estimate of solar system sizing to generate 900 kWh/mo
	Colored area from map at right
	Light Green	Yellow	Orange
Size of system	8.6 kWp	7.4 kWp	6.7 kWp
Space required	860 s.f.	740 s.f.	670 s.f.

This calculator from FindSolar may give you a more accurate idea, since it's based on your actual zip code (so they can tell how much sun you're getting) and how much you're paying for electricity each month (so they can tell how much electricity you're using).

kWp is just the units we use to measure the system. Sometimes it's just referred to as plain kW. It's not important to know what kWp means. (But if you must know, it stands for kilowatt-peak, which is the maximum possible output of the system at any point in time.) Each kWp generates 105 to 135 kWh of electricity each month, depending on where you live on the map.

Here's how you can find how large a system you need to generate as much energy as you use:

1. Figure your daily usage. If you use 900 kWh/mo., that's 900 kWh / 30.4 days per month = 29.6 kWh/day.
2. Figure how many kWh you need to generate each hour. From the map above you can see that if you live in a yellow area that you'll get 5 to 6 hours of peak sun per day on average. We'll call that 5 hours/day to be conservative. Since you need to generate 29.6 kwH/day, you need a 29.6 kWh / 5 hours = 5.92 kWp system.
3. Add a safety margin. Multiply by 1.25 to account for shading, dust, and bad feng shui. So 5.92 kW x 1.25 = 7.4 kWp. We need a 7.4 kWp system.

Each 1 kWp of system takes about about 100 s.f. (10' x 10') of roof space. (source for roof space)

Note that there's no reason you have to put the system on the roof. If you're willing to give up some yard space, you can put the panels on poles on the ground. This is a good choice when the roof is shaded by trees and doesn't get enough sun. Putting the panels on the ground is also nice because then the panels can be easily arranged at the optimum angle to get the most sun, while on the roof you're limited by the ridgeline of the house.

You can't put panels on every face of your roof because it's only economical to put them on the parts that get the most sun. You typically want the panels facing south. Panels facing east or west might barely be acceptable, maybe. Panels facing north are useless.

Remember, if you don't have "enough" roof space it's not really a problem, because system size is arbitrary. Whatever system you install will simply mean that some portion of your electric needs comes from green energy.

Here are other solar maps and calculators for those wishing to run their own numbers:

• Sharp Zip Code calculator. Enter your zip code and get more info about a possible system than you could ever imagine.
• U.S. Peak Hours map from Wholesale Solar.
• U.S. Peak Hours map from APS Project. (kWh/m² is the same as peak hours).
• U.S. Combination Calculator/Map. Lets you choose Average, Maximum, or Minimum; for the whole year or just a specific month; and according to how well your equipment is aimed at the sun. Wow!
• U.S. Cities table. Lists summer, winter, and average peak hours per day for tons of U.S. cities.
• World Peak Hours map by month. Nice map where you can click on the city of your choice and get a month-by-month listing of peak sun hours, but unfortunately it doesn't tell you the average for the year.
• World peak hours calculator. Choose your country / city and get detailed info. Takes a few clicks to get to what you want, though.
• Word Peak Hours map for the worst month of the year. (This is not an average for the whole year!) Many installers base their system size on the worst month's sun output, to be conservative.

 

How much electricity does a solar panel generate?

For home energy, it's generally better to use the method above: Start with your monthly needs for electricity, then calculate how big a system you need. But if for whatever reason you want to know how much energy you can get from a solar panel, here's how to calculate it. First start with the number of hours of "peak sun" you get per day. That's easy: In our map above, it's 4 hours for green, 5 hours for yellow, and 6 hours for orange. Then multiply that by the peak output of your panel, then by the number of days per month. For example, for a panel rated at 150 watts in New York, we'd have:

4 hours peak sun x 150 watts panel x 30.5 days per month ÷ 1000 kWh/watt-hour = 18.3 kWh/mo.

 

Solar panels do NOT take more energy to make than they generate

Somehow the myth got started that it takes more energy to make a solar panel than you can get out of that panel. That's just absolutely not true. The energy payback time on a panel is 1.5 to 3.5 years, but most panel will produce useful electricity for 25 years or more. So if you were worried that solar panels were energy wasters in disguise, you can breathe a sigh of relief. They're not.

 

How long do solar panels last?

Solar panels typically last at least 25 years, though their output decreases slightly over time. Some manufacturers offer 25-year warranties, guaranteeing that their panels will put out at least 80% of their stated capacity after 25 years. A panel that continuously degrades to 80% capacity after 25 years puts out the same amount of energy as one that puts out 100% for 21 years, so that's why I use 21 years as the panel lifetime in the calculator above. (More on 25-year lifetime from the BBC and Scitizen.)

 

Google goes solar in a big way

In 2007 Google built a massive 1.6-megawatt solar system at its headquarters in California. It generates 30% of Google's peak demand, and around two million kWH a year. It's the largest corporate solar install in the U.S. (There are larger installations at utility companies, but this is the biggest for a company generating its own electric. Here's a good list of the largest solar installations in the world.)

Google has a page where you can see how much electricity they generated in the last 24 hours and the last 7 days. You can also see a flyover video of their installation.

The system will take 7 years to pay for itself, and then will generate free electricity for another 18. (The lifespan of the panels is about 25 years.)

It doesn't end with this huge installation. In late 2007 Google announced its plans to develop a whopping one gigawatt of energy from renewable sources at a cost cheaper than coal, and to do it "within years, not decades". Wow.!

 

Other solar resources

I just found this interesting list of the world's 13 largest solar energy plants.

The Wikipedia article on solar electricity is impressively comprehensive.

 

Wind power compared

Wind power has the same problems as solar: a big upfront cost, and higher cost-per-kWh than grid electricity over its whole useful life. A $16,500 system ($12,500 + $4000 installation) could generate 74,403 kWh over its 20-year life. That's 22¢/kWh, double the cost of grid electricity. But again, the point of going wind or solar isn't to save a ton of money, it's to get your electricity without causing lots of pollution. If you can afford the price premium, you can go green.

Wind power resources:

• Figures for the above paragraph calculated based an article in Boston Globe)
• See current Wind Turbine prices
• Here's a quieter wind turbine, since many models are fairly loud.
• Average wind speed by city