How Much Does It Cost To Install Solar Panels

With green living becoming more and more important, many people are starting to install home solar power to supplement their power and reduce their electric expenses.

But when you install solar power, how much do you actually have to generate to say cut your bills by 50%? How Much Does It Cost To Install Solar Panels? And what kind of costs will you be looking at?

Here is a simple 4-step formula to help you calculate your home's solar panel watt requirements and costs:

1 - What Is Your Daily Power Consumption?:

To work out how much power you use on an average daily basis, this is what you have to do: First go back and look at your past 12 months electricity bills. Then work out the average kilowatt hours (kWh) used per month. The reason we do this is because we use different amounts of power throughout the year. The calculation is month 1 + month 2 + month 3 etc... then divide that by 12. If you do not have all the statements, just use last month's bill.

Now take your average kWh per month and divide that by 30 to get your average kWh per day.

- Let's use an example: If our monthly energy usage is 800kWh, then the average daily power used is 800/30 = 26.7 kWh a day.

- So to reduce your electricity bill to half, 26.7/2 = 13.4 kWh of solar power per day is needed.

2 - Work Out Your Solar Panel Watt Requirements:

Before you can work this out, you need to find out how many usable hours of sunlight your region gets per day. A simple way to find that out is to have a look at an insolation map - there is one available on our website, where the original article was posted.

Your next step is to take the daily kilowatt hours needed and divide it by the average usable sunlight hours, then multiply that by 1.25 (this is used to take into account the inefficiencies in the solar power system from wiring, charge controllers, batteries, and inverters).

- From the previous example, if you live near California where the average daily usable hours of sunlight is 5.5 hrs, the solar wattage needed is:

13.4 kWh required / 5.5hrs of insolation x 1.25 = 3.045 kW or 3045 Watts daily.

This indicates that our home solar power system must have the minimum capacity to produce 3045 Watts of power.

3 - Calculate Solar Panel Watt Costs:

This step will help you work out the cost of the solar panels needed to make 3045 Watts of power. Nowadays in the US, the highest average cost for solar panels is $4.85 per Watt.

- Following on from our example, the solar panels will cost 3045 x 4.85 = $14,768 to only halve our monthly power costs. This excludes the cost of wiring, charge controllers, batteries, inverters, and installation fees.

4 - Take Government Rebates and Credits Into Account:

Before you think you are going to have to fork out at least $14,768 for only 3045 Watt of solar panel power, you need to consider the effect of government subsidies and incentives.

2009's Federal renewable energy tax credits came into effect from the beginning of the year and coupled with the state-side incentives in places like Connecticut, California, New York and New Jersey, the cost of the solar power system will be much less.

- Using the same example: For a Californian to buy the solar panels, they would receive a state tax rebate of 20% of the cost and a federal tax subsidy of 40% of the remainder. So, the investment in the solar panels would only be:

$14,768 - $14,768 x (20%) - $14,768 x (1 - 20%) x 40% = $7,089.

A word of warning: The formula outlined here will give a rough estimate of what you can expect to pay for your solar panel watt needs. Obviously, the costs will differ with regard to special offers, the state you reside in and the contractor you use to install the system.

However, from the example, you can see that for Californian to reduce their power bill by half, they would have to buy $14,768 worth of solar panels, costing them $7089 after rebates. A cheaper option would be to learn to source affordable and even free solar cells and build your own solar panels. This can be done by following a relatively inexpensive step-by-step solar power manual, such as Earth4Energy.