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How Much Does Solar Cost? Part 1

HOW MUCH WILL IT COST TO INSTALL SOLAR ELECTRIC (PV) IF MY GOAL IS TO ELIMINATE MY ELECTRIC BILL (“NET ZERO”)?

If your goal is to eliminate your electric bill then the next several questions to be answered are: what was your last 12 months of kWh (kilowatt-hours) usage? Was that a typical year or were there things that caused your electric usage to differ from your normal/current usage? Do you have enough shade free roof space with southern exposure? If your roof is not well suited then do you have shade free space on your property for a ground mount system?

When calculating your last 12 months of kWh’s used, you can either: 1) pull out your utilities bills for the last 12 months and look for the total kWh’s consumed per month and then add up the last 12 months; or 2) simply call your utility company, give them your account number and they will give you the month by month breakdown for the past year. It is important to note that for a grid-tied solar system, neither the peak monthly usage nor the average monthly usage are nearly as important as the total annual usage.

After you have determined the past 12 months kWh usage, the next question to be answered is was that a typical year of electric consumption or will there be any change in your electric usage in the future? Maybe you were out of town a lot more than usual, in which case you used less electricity than normal. Maybe you’re planning to build an addition on your home or build a workshop. Or maybe there will be more or less people living in your home going forward. If any of these things are the case then we can adjust the size of your solar array to ensure you achieve your “net zero” goal.

The next thing you’ll want to ask yourself is do you have good shade-free southern exposure on your roof? If not, do you have shade-free space on your property for a ground mounted solar array? Another thing to consider is the tilt and orientation of your roof, as these two things can dramatically impact how much power (electricity) your system will produce. With a ground mount array, we can build the solar array to be 100% optimal. Don’t worry too much initially about the location… we have shading analysis tools and can ultimately help determine the best location for your solar array. The main things to consider here are your location preferences and options; but remember – shade is the enemy!

Once the above questions are addressed then we can determine what size your solar system needs to be in order to eliminate your electric bill. As a very broad based rule of thumb, each kW of solar panels installed in Colorado will generate around 1,300 – 1,600 kWh’s annually, depending on the tilt and orientation of the solar panels (this is a topic which will be discussed in future blog posts).

There are many variables in determining the cost of installing solar on your home or business. But one of the most important things to understand is that solar pricing is not linear. Generally speaking, the larger the system is the lower the cost (per watt) will be. A 10kW (10,000 watts) solar system will cost a lot less per watt than a 4kW (4,000 watts) system. Of course, the total cost of a 10kW system will be higher than a 4kW system but the larger the system is the lower the cost per watt and the greater the return on investment.

Many solar installers will tell you that a ground mounted solar array will cost a lot more than a roof mounted array. This is not necessarily the case! With a roof mounted array we are limited by the tilt and orientation of your roof, which in most cases is less than optimal. Therefore, in order to produce the same amount of electricity, a roof mounted solar array must be larger than that of a ground mounted array, which can be built to be 100% optimally oriented. Let’s say the tilt and orientation of your roof are such that you’ll only achieve 90% of the optimal power production. If that were the case (very common) then a roof mounted solar array would need to be approximately 10% larger than a ground mount array in order to achieve the same power production. In this situation, a ground mounted solar array would be less expensive than a roof mounted array.

There are many other variables that impact the cost of installing solar, which we evaluate during our site analysis (ie – breaker panel and electric service, roof structure and material, rafter/truss system, meter location, point of grid interconnection, conduit runs, etc.). However, getting to the heart of the question, the total turn-key cost of having solar installed on your home or business will typically be between $3.50/watt, for larger solar PV systems, and upwards of $6.50/watt for smaller systems. In addition, everyone who installs solar on their home or business is eligible for a 30% federal tax credit (this is not a tax deduction; it is a tax credit… a dollar for dollar reduction in the taxes you pay to Uncle Sam), thereby reducing your installed cost by 30%. Also, many utilities offer rebates and/or REC (Renewable Energy Credit) payments based on the size of the solar system and the amount of power it produces. These utility rebates can also drastically reduce the cost of installing solar. Please call us at 970.482.SOLAR (7652) if you want to find out what rebates your specific utility offers.

Please stay tuned next Thursday for Part 2: “Putting it all Together”!  Here we will use an example addressing everything we’ve discussed in this post.   In the meantime, please check out our website at www.altewindandsolar.com and our Facebook page at http://www.facebook.com/pages/Alt-E-Wind-Solar-Ltd/196202797091314 or give us a call at 970.482.SOLAR (7652).

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How Much Does Solar Cost?

HOW MUCH WILL IT COST TO INSTALL SOLAR ELECTRIC (PV) ON MY HOME OR BUSINESS?

The answer to this question is not as simple as is seems. There are many variables starting with your goals and desires. The first question to ask yourself is what kind of solar photovoltaic (PV) system do you want? There are three primary types of solar PV systems (the kind that generate electricity).

The first type of solar PV is what we call a grid-tie or grid-connected system. This is by far the most common and least expensive. Your solar system is connected directly to the grid so your meter actually turns backward when your system is producing more power than you are consuming and turns forward when you are using more electricity than the system is producing. At the end of the month the utility company only bills you for the “net” amount of electricity used. If your system produced more electricity than you used during the month then you can elect to have the utility pay you for that excess power or have it collect in your “solar bank” to be used at a later date. This type of system is pretty much maintenance free (solar panels have a 25 year warranty) and there is no need for batteries since the grid provides power to your home or business when the sun isn’t shining.

The second type of solar PV is an off-grid system. This type of system is used primarily for homes where grid power is not available or in situations where you simply don’t want the utility to provide your power. These types of systems require a battery bank and can get pretty expensive depending on your electric loads (how much power you will need). Basically the batteries provide all your power and the solar panels keep your batteries charged. Therefore the more power you use the larger the battery bank (and solar array) will need to be. These systems can get pretty expensive over time because the batteries need to be replaced about every 6-8 years, if properly maintained.

The third type of solar PV is a hybrid system. This is usually a grid-tie system with a battery backup and is used by those who are concerned with power outages or grid failure. These are by far the most expensive since we are creating a “smart” system to determine where the power is coming from (solar, grid, batteries, generator, wind turbine, etc.) and where it is going to (your electric loads, to charge the batteries, or fed back into the grid). These types of systems have several additional components and unique requirements that are not necessary with the other types of solar PV systems. The primary advantage to these types of systems is that you are able to have power even if the grid goes down. However, the primary disadvantage is the upfront cost and maintenance expense.

Since 95% of all solar PV systems being installed today are grid-tied, we will begin by first answering the “what does it cost” question for this type of system. We typically take one of three different approaches to designing a grid-tie system depending on what your goals and objectives are:

  1. The first approach is to design a system to eliminate your electric bill;
  2. The second approach is to design a system to maximize your roof space;
  3. And the third approach is to design as large of a solar system as we can within your budget.

We will discuss each of these three approaches in our next three blog posts… so stay tuned!! In the meantime, please check out our website at www.altewindandsolar.com and our Facebook page at http://www.facebook.com/pages/Alt-E-Wind-Solar-Ltd/196202797091314 or give us a call at 970.482.SOLAR (7652).

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