Solar System Install

Average solar panels cost as at June, 2018 in California is $3.18 per watt. This means that for the average sized 5 kW residential solar system the cost is $15,900 and $11,130 after claiming back the credit. The average monthly payment is $96 making even zero down solar systems cash flow positive from day 1.

We often get asked how much it would cost to install enough photovoltaic (PV) solar panels on a house or business building to generate one’s own electrical energy. There are web sites to help with this, and Solar Power Authority even has a free solar calculator and quote tool, but they can be confusing unless you’re a technologist — so I’ve developed some simple guidelines (below) that will help put cost in perspective.

In the USA, a rule of thumb is that the average house consumes electricity at the rate of 1 kW per hour (kWh). There are about 730 hours in each month, and the average price of a kWh of electricity is $0.10. So an average monthly bill would be around $73 for 730 kWh of electricity.

Of course, this can vary considerably if you have non-standard items such as a hot-tub, or some electrical appliances running continuously. Extended computer use, plasma screen TVs and video games consoles can also make an impact. Your usage will increase significantly in months when you run an air conditioning unit, as well. Finally, the cost of electricity varies widely across the USA, from as low as $0.07/kWh in West Virginia to as much as $0.24/kWh in Hawaii. You’ll have to adjust my guidelines accordingly, because they apply to an average home with average consumption and average electricity costs.

A conservative value to use as a solar panel’s generating capacity is 10 watts/sq. ft. This represents a panel conversion efficiency of about 12%, which is typical. This means that for every kW you generate, you need about 100 sq. ft. of solar panels. If the sun shone 24 hours a day, you could put up 100 sq. ft. of panels and have enough energy to power the average home.

But, as we all know, the sun is available only during daylight hours, and the amount available per day is highly dependent on the extent of cloud cover. Also, the length of each day is dependent on the season. Fortunately, there are resources on the web to help you figure out how many hours per day (on average) you can count on the sun to shine, based on where you live.

The averages across the USA vary from around 3 hours per day in places like Seattle, Chicago, and Pittsburgh, to 5 or 6 hours per day in states like Colorado and California, to a high of 7 hours per day in Arizona. What that means is that the size of the panel array required can vary, anywhere from 400 sq. ft. to 800 sq. ft. (i.e., 4 kW to 8 kW), depending on where you live. You’ll need more panels if you live in a location that gets less sunshine per day, and fewer if you live in a location that gets more.