While countries like Germany and France have led the way for solar, some worry that solar advancement comes at too steep a price. Estimates from the US Energy Administration have even predicted that the cost per megawatt hour for solar would be as high as $211, compared to just $63 for an advanced combined-cycle power plant fueled by natural gas.
The question for homeowners considering solar, is how do these costs play out in real time?
To answer that question, let’s consider a typical 5.2 kilowatt photovoltaic (PV) solar system. Figuring on a conservative basis, at 5.5 hours of sunlight per day, this system will generate 28.6 kilowatts per day. However, because a PV system is a direct current system, it will need to be converted into an alternating current. Most PV systems convert at about 87 percent, meaning that this system will create around 25 kilowatts per day. Over the course of the year, that is 164, 843 kilowatts, and over 10 years, 1,648, 432 kilowatts.
The average cost of a 5.2 kilowatt PV system is just under $20,000 before the Federal Tax Credit, which is 30 percent. Assuming you can use the tax credit, which most homeowners can, the real cost of the system is right around $13,000.
Ok, now let’s consider what you spend on utilities. If we take an average bill of around $180 per month, your yearly utility cost is $2,160, and for ten years, $21,600, and for thirty years, $64,800. And remember, that figure does not take rate increases into account, which, for most utility companies are around 6 percent every 3-5 years.
Now, let’s figure that that solar system saves you 50 percent on your utility bill, which again, is a very conservative figure. At a savings of $1080 per year, the system will pay for itself after 12-13 years. And after thirty years, the system will generate a profit just under $20,000.
So how much will solar cost you? Well, unlike utility companies, solar energy is not subject to rate increases. Instead, the price per watt for solar decreases the longer you have and use the system. The only question you have to ask is how much do you want to save?
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