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How Much Does Solar Cost?

Solar Contractors Escondido CAThe reason it is difficult to get a straight answer on the cost of solar is that there are quite a number of variables that affect the cost of a solar system, and there are two units of measure that both sound very similar. So a little background and education is necessary in order to be able to compare apples to apples and know that you’re getting a good deal.

Two Units of Measure.

Everything you buy has a price per some unit. Eggs are typically $$ per dozen, milk $$ per gallon, gold $$ per ounce, and so on. With solar systems you can either look at the cost of the electricity that the solar system produces or the cost of the solar system itself. Cost of electricity is measured in $$ per kilowatt hour (kW-hr) and the cost of the solar system is measured in $$ per Watt or $$ per thousand Watts which is a kilowatt. So a 5000 Watt solar system or 5 kilowatts (kW) solar system is about 16 to 20 solar panels. You can probably see why it is easy to get confused.

OK, So How Much Does Solar Cost?

First unit of measure: cost of electricity in $$ per kW-hr

In California the average cost of electricity per kW-hr from the utility is $0.24/kW-hr.

Average cost of electricity from solar is $0.07/kW-hr or about $0.10/kW-hr factoring in the cost of interest on a zero money down solar loan. No, that’s not a misprint, solar cost about 1/3 of the cost of utility power. Maybe it’s time to go solar, huh?

Second unit of measure: solar system cost in $$ per Watt

Economies of scale have a strong effect on the cost of a solar system per watt. As the system size goes up the cost per Watt goes down. System sizes on a residence typically range from 2 kW to 20 kW and pricing ranges from about $4.20/Watt down to as low as $2.85 per Watt before any tax incentives or rebates.

Let’s take a look at an average system size as an example. A 6000 Watt or 6 kW solar system is typically 20 to 24 solar panels. If you bought a premium quality system with microinverters from Solar Symphony you might pay $3.40/Watt. Again there are a lot of variable that affect pricing. So 6000 x $3.40 = $20,400. That’s the gross cost of the system before any tax incentives or rebates. The net cost of the system in this example would be $20,400 x 0.7 = $14,280. If you financed that $14,280 for 15 years you’d see payment of around $128 which is a good deal less than the average utility bill in California. That’s the savings from solar that everyone is so excited about. Once the system is paid for you can enjoy free solar power. In this example 10 years of free power!

If you get a quote from a solar company that doesn’t list price per watt, you can calculate it by taking the gross system price (before any tax incentive or rebates) and divide by the nominal system size. $30,000 / 10 kW = $3.00/Watt. To calculate the nominal system size just take the name plate rating of the solar panels x the number of panels. If the solar panels are 265 Watt nominal x 26 panels = 6890 Watt nominal system size or 6.89 kW. By reducing all of your solar quotes into $$ per Watt you can compare pricing and make sure that you’re getting a good deal.

As you analyze pricing don’t forget to factor in quality and customer service. Solar Symphony delivers all three: the highest quality equipment and installations, great customer service, and an unbeatable price.