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The Cost Of Solar Energy

Considering Solar Power For Your Elerctricity Needs? Learn How To Calculate The Cost Of Solar Energy.

cost of solar energy calculation

The high cost of solar energy is often brought up as a major obstacle for regular households to go solar. And for sure, investing in a full photovoltaic and thermal solar powered home will not be cheap.

But that doesn't mean it isn't worth it!

Also, there are very many possibilities to increase the usage of solar power without going the whole way. And in either case, making sure you do everything you can to save energy will be a good start!

If you are interested in investing in solar electricity for your home, a few simple steps will help you roughly calculate the cost of solar energy for your particular situation.

So go get your calculator and your latest electricity bill and get started!

Calculating The Cost Of Solar Energy

Step 1

Check your latest electricity bill for your average power consumption in kilowatt hours. (kWh/day). On many bills, your monthly consumption rather than your daily will be specified. Simply divide your monthly consumption with the number of days of that month to get your daily consumption.

You might want to do this for a few months, or even for a full year back in time, to get an average that is more stable over time. For comparison, the average American home uses about 25 kWh of electricity per day. So if you end up with a figure very far from this, go back and check your calculations!

Step 2

Find a Solar Map for your country and determine the number of hours per day that the sun is shining on your house. For example, if you are living in California, you have about 5 hours of sunshine per day on average for a whole year. It does vary within California, however. In South California it is 5.5 hours and in North California, it is closer to 4.5 hours.

Below you'll find sample solar maps for the US and Europe, just to show what they usually look like. But you should of course make sure you have more detailed maps to estimate the hours of sunshine where you live.

solar map europe
solar map USA

Step 3

Decide for yourself how much of your total electricity bill you want your solar array to cover. Is it 50%, 70% or 100%? Here you can of course play around with the figures and see where you end up.

Something to remember is that there will be efficiency losses in your system, due to for example wiring, irradiation, dust, shadow, wind and more. Hence you have to calculate with less than a 100% electricity production. A common factor to use is 75%.

The formula is:

solar array estimation in kW

Step 4

Now you are ready to calculate your array size in kW. Using the above formula for our example:

solar array calculation

The calculations give that you need a 5.45 kW array to power your home 75% with solar energy. If you instead had aimed for 50%, the required array would have been 3.6kW.

Step 5

When knowing the size of the solar array to be used in kW, the cost of the solar array can be estimated approximately. The average installation cost varies a lot depending on location amongst others. A rough rule of thumb, however, is that a photovoltaic system will cost between $8 and $10 per Watt. So per kilowatt the cost is $8,000-$10,000. This means that the cost of our sample system is between $43,600 and $54,500 depending on if this would be a low or high installation cost location.

So the formula is:

estimated cost of solar energy installation

And using the figures from our example: 5.45kW x 1,000w/kW x $8/watt = $43,636

Step 6

Now you have a very rough cost estimation before any grants or tax rebates. Next step is therefore to read up on what kinds of grants are available for you. In many countries government rebates and credits may reduce your total costs with as much as 30%.

For people living in the US, the DSIRE database is an excellent place to start.

Step 7

Once you know the rebates available and you have a rough cost estimate for using solar power for your home's electricity needs, it is time to decide whether to contact a solar contractor to discuss your needs and budget in more detail. If you feel that the costs are too steep for you, there is still plenty of possibilities to use solar energy at home for bigger or smaller applications.

For example, check our section presenting various solar products for home use for inspiration.

More About Solar Grants And Costs


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