| Residential Photovoltaic
Costs, Paybacks and Maintenance |
Talking about Costs
Solar electricity is expensive. It is for this
single reason that solar industry experts advise
homeowners to reduce their energy “footprint”
in order to get maximum performance from the solar
system. When solar manufacturers and installers
talk about costs, they speak in terms of dollars
per watt ($/W).
Bigger systems cost fewer dollars per
watt but always cost more in absolute terms. Conclusion:
installing a larger system is pricey up front,
but is almost always more cost-effective.
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How much will my system cost up front?
Residential PV systems typically are installed at around
$8-11 per watt. The larger the system, the closer your
system will be on the lower end, $8 per Watt.
Using this rough measure of installed costs, we can
come up with a total installed cost range. Remember purchasing
a smaller system will increase the per Watt cost, and
purchasing a larger system will decrease the per Watt
cost. Therefore…
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For a 0.5kW PV system, you will probably
see installed costs around $11 per watt. That’s 500
watts X $11/watt = $5,500
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For a 2kW PV system, installed costs should be around $9
per watt. That’s 2,000 watts X $9/watt = $18,000 |
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For a 3kW PV system, installed costs could drop to $7.50
per watt, or, 3,000 watts X $7.50/watt = $ 22,500 |
| This gives us a range of $5,500 to $22,500
installed for a residential PV system. |
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Maintenance
Maintenance is not really an issue for grid connected
PV systems that do not incorporate batteries. A good
installer will not typically need to return to do maintenance
on this type of system. However, systems that incorporate
batteries do require regular maintenance on the battery
banks. The added cost of the batteries and maintenance
should be factored into your decision about what type
of PV system best suits your needs and lifestyle.
Federal and State Incentives
PV costs can be cut remarkably by government tax credits,
incentives and special financing plans
As part of the Energy Policy Act of 2005, the U.S. government offers a 30% tax credit for qualified PV systems expenditures. The maximum residential tax credit is $2,000. This incentive applies to equipment placed in service between January 1, 2006 and December 31, 2007.
To learn more, read Tax Incentive Opportunities for Solar and Energy Efficiency on the Southface factsheet page.
The North Carolina Solar Center has put together a website
called DSIRE, or Database for State Incentives for Renewable
Energy. Refer to this website for a comprehensive list
of incentives in your state, and check with your utility
provider for additional incentives.
www.dsireusa.org
Here are a few highlights about solar incentives, provided
by DSIRE:
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Georgia mandates net metering, an arrangement which guarantees
that a homeowner’s excess solar energy is sold back
to the power company when solar electricity production exceeds
home demand. The buyback rate depends on the utility |
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Tennessee Valley Authority (TVA) has launched Green Power
Switch, a program that pays TVA-connected homeowners 15 cents
for every kilowatt-hour of solar energy they generate |
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North Carolina provides a tax credit for 35 percent of
the total cost of a homeowner’s PV system |
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Mainstay
Energy’s Rewards Program will pay any homeowner
with a PV installation a few cents per kilowatt-hour generated,
but they will not pay on top of any other buyback incentive
programs |
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Currently there are federal incentives for homeowners
and businesses to install PV and solar thermal systems. |
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Various utilities provide solar electricity buyback programs |
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Paybacks
Most people want to know if their PV system will pay
for itself through lower electric utility bills. In the
Southeast, without taking advantage of any incentives,
this will likely take a few decades.
Electricity in the Southeast can be as cheap as 3 cents
per kilowatt hour, so the amount of money offset by producing
your own electricity is very small. If grid electricity
cost more, for instance, 20 cents per kilowatt hour,
then payback periods would be shorter.
Using incentives such as the North Carolina 35% tax
credit and the TVA Green Power Partners program can dramatically
reduce costs to the point where payback time becomes
reasonable.
Considering current market conditions, it’s probably
best to think about solar energy as both protection from
rising energy costs and commitment to environmental responsibility,
as opposed to a purely financial investment.
By owning a solar array and generating clean electricity,
you become part of the energy vanguard. You take a giant
step towards independence from the price volatility and
negative externalities of fossil fuels. Now that’s
more than you can say about remodeling the bathroom.
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| Links |
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Photovoltaic manufacturers |
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Photovoltaic installers |
