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You are considering a conversion to solar electricity in your home. Immediately you wonder “How much is this going to cost?” Consumers often make the mistake of thinking the cost is related to their home’s size, but that is probably the least significant factor in determining solar panel prices. Granted, a bigger house will sometimes use more energy and have more roof space, but those generalities aside, the home’s size is a minor consideration.

More important is the amount of direct sunlight you receive on your southern exposure (i.e. geographic location), the amount of power you consume and the amount of that consumption you plan to replace with solar power. The combination of these factors will determine the number of panels needed and therefore impact the price. Also, different panels have different efficiency ratings. Efficiency rating describes the amount of power the panels can generate per square inch. It quickly becomes clear that you must first know how many panels you need before individual solar panel prices are a concern.

With that having been said, you can estimate solar panel prices at around $9 per watt. Do the following calculations to determine how many total watts you need.

1) First, take the Kilowatt hours (KWH) from your monthly electric bill and divide by 30 to get your kilowatt hours per day.

2) Next, estimate how many hours each day that your location receives direct sunlight – this will only be an estimate because you’ll usually get more sunlight in the summer and less in the winter.

3) To get the amount of power you will need to generate during the direct sunlight hours, divide the daily kilowatts by the daily direct sunlight hours estimate.

4) Finish by multiplying the result by 1,000 to convert the kilowatts back to watts.

As an example: 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 during each hour that 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.

Remember that although you are generating enough power 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 after the sun goes down. You can do this in one of two ways.

Extra energy can be stored in batteries for use when needed. Plan on an additional 25% cost for batteries if you go this route. The other option is to sell the excess power back to the electric company during the hours that you are producing more than you consume.

Then during the dark hours you would run on public electricity. 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. If this seems confusing, read through it a couple times and it will start to make sense.

We prefer the do it yourself method to get the very lowest cost for solar power. You can save thousands of dollars on  solar panel prices, batteries, and all the other components needed, so give serious consideration to building your own system.

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