The Numbers Behind Solar Panel Prices

You are considering a conversion to solar power in your home. Naturally, most people considering this project want to know “How Much?” Consumers often make the mistake of thinking the expense is related to their home’s size, but that is probably the least significant factor in determining solar panel prices. Sure, homes with higher square footage have more roof space and will often consume more energy, but those generalities aside, the size of the home is a secondary factor at most.

More important is your geographic location, the amount of direct sunlight you receive on your southern exposure, how much electricity you use and how much of that electricty you plan to replace with solar energy. The combination of these factors will determine the number of panels needed and therefore impact the price.

In addition, there are different kinds of panels with different ratings (i.e. they are {capable of producing|able to produce} more or less {power|energy|electricity} per panel). It quickly becomes clear that individual solar panel prices are somewhat meaningless without first knowing how many panels you need.

We prefer the do it yourself method to get the best Solar Panel prices.

With that having been said, figure on approximately $9 per watt for new, professionally installed solar panels. Identify the number of watts you will need as follows. Start by finding the total killowatt hours on your monthly electric bill and divide by 30 to get the daily kilowatts. Next, estimate how many hours each day that your location receives direct sunlight - this will only be an estimate because you naturally get more sunlight during some parts of the year and less in others.

Divide your daily kilowatts by the daily hours of direct sunlight to determine the amount of power you will need to “collect” during those [hours of direct sunlight. Finish by multiplying the result by 1,000 in order to convert the kilowatts back to watts.

The following example illustrates the process: If you use 1,000 KWH per month, divided by 30, you use 33.33 KWHs per day. If you get 5 hours of direct sunlight per day, you need to collect 6.66 Kilowatts per direct sunlight hour throughout the day (33.33 daily kilowatts divided by 5 hours = 6.66 kilowatts needed per hour).  Multiply the resulting 6.66 by 1.2 to properly size your system and to account for fluctuations in direct sunlight and you get 7.99 Kilowatts needed each day while the sun is shining (6.66 * 1.2). Finally, multiply this result by 1,000 to convert back to watts and you get 7,990 watts per day. So replacing 1,000 KWHs per month of electricity will require that you can generate 7,990 watts during peak hours. At $9 per watt, it will cost approximately $72,000. Now here’s the catch. Though you are creating enough energy during the peak sunlight hours to meet all your energy needs for the full day, you will still need a way to power your home when the sunlight is gone. You can do this in one of two ways. Keep in mind that although you are producing 7.99 kilowatts per hour during the peak hours, you are consuming only about 1.4 kilowatts per hour throughout the day.

First, extra energy can be stored in batteries for use when needed. Adding batteries to your system will add about 25% to your total system cost. You also have the option of selling back to the power company any excess power you generate during those peak hours. You would then switch over to public electricity for the rest of the day. Selling back the excess power will partially or fully offset the electric expense during the non-peak hours. Either way, you can see that solar panel prices are only a portion of the total cost for solar powering your home.

Don’t let this planning step discourage you. It is always confusing at first, but honestly, it becomes clear once you read through it a few times. On our site we specialize in do it yourself solar and wind power, where you can save thousands of the cost. We have many articles related to solar panel prices, homemade solar planning, construction and installation.