By: PVPower.com Staff Contributor - February 12, 2010
As the solar industry continues to grow at rapid rate for both commercial and residential needs, there are still basic questions from the public on the true costs and benefits when investing in a solar system. Specifically, how much would a solar installation cost and how much energy will it produce?
Solar PV (Photovoltaic) residential systems are one of the most common and fast-growing solar solutions. These kits generate electricity and are based on three major components: solar panels to generate electricity, an inverter to convert the electricity into household use, and a mounting structure to secure the equipment. The standard solar pv systems are"grid tied", which means that it connects into the existing utility grid to supplement the overall electricity supply.
To understand the rough cost of what a residential grid-tied pv system could provide your home, here is the standard information needed to work through an estimate:
3) total space available
4) direction the panels would face and angle
5) cost of electricity from your utility
Lets assume the following information for a sample cost-out:
1) $40,000 or less
2) Chicago, IL
3) 600 square feet of roof
4) South facing at 30 degree angle
5) ComEd rate of $0.14/kwh (the local utility company)
Now we apply additional solar information towards the specific evaluation:
1) $40,000 or less
2) Chicago, IL provides approximately 3.5 hours of quality sun each day, or 106 hours of solar hours each month
3) 600 ft of roof could fit approximately 33, 175 watt solar panels (18 sf per panel); 33 panels x 175 watts = 5.775 kilowatt system
4) South facing locations at approximately 30 degrees typically produces the best results, specifically in shade free locations
5) 5.775 kilowatt system produces this amount of electricity each hour of quality sun; 5.775kw x 106 hours per month = 612 kwh each month; 612 kwh x $0.14/kwh from ComEd = $85 in electric savings each month
The average cost of a grid-tie system including all products, installation and processing fees is around $7/watt. In the sample evaluation, $7/watt x 5,775 watt system = $40,425. In Illinois, the current state rebate is 30% of the cost of the solar kit. This results in a $12,127 refund. Federal incentives currently provide 30% tax credits for the cost of the solar kit, or another $12,127 in a one time tax credit. The net cost after federal and state incentives is $16,175. Keep in mind that municipalities and utility companies may also provide added incentives and discounts. It is important to work with a solar professional and an accountant to properly understand and process these financial details.
In the case of this sample evaluation, the solar system costs $16,175 and produces approximately $1,020 in savings per year. This results in a payback period of 15-16 years. However, this does not take into account the increased value of the residence, the likelihood of increased energy costs, or the environmental benefit and goodwill. Considering solar panels have a 25 year guarantee and are virtually trouble free once installed, the current benefits seem to outweigh the costs.
Call PVPower.com for advice or a quote today at 866 274 0624 or Chat Live with one of our Solar Specialists, just click the “Live Chat” icon to the right.
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