Cost > FAQs

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How much does a photovoltaic (PV) system cost?

Figuring out how much a particular PV system will cost is a complicated process, as the overall cost depends on a number of different factors: the size and type of the installation, the particular manufacturer, and your local installer. Other factors include subsidies and other government incentives, which can significantly lower the overall price tag. Before such subsidies, for example, a typical residential PV system of 3.5 kilowatts would cost about $35,000 all told. After, however, that price could be $10,000 (or more) lower. Again, this all depends on where you live.

For a look at the incentives available nationally and in your area, check out our interactive map.


What is the break-even point for solar energy system?

There is no single answer, but many systems pay for themselves between 7 and 14 years. Much depends on the overall cost of the system, which is a product of the type and size of the installation and the incentives available in your area. Furthermore, the break-even point is influenced by the price of electricity: if your utility charges 12 cents per kilowatt-hour (all else held constant), your break-even point would come sooner than if you were only being charged five cents per kilowatt-hour. This is because in the first case you’d be saving more money in monthly electricity charges: each kilowatt-hour produced by your PV system would save you 12 cents, as opposed to five.


How can I finance the purchase of a solar PV system?

There are several different ways. More and more, companies and banks are working together to provide hassle-free loans to consumers interested in purchasing solar power systems. Many people also take advantage of what are called Energy Efficient Mortgages. In some instances, your monthly loan payment may be equal to—or even less than—what you used to pay in bills to your electrical utility.


What is the estimated energy payback period for photovoltaic (PV) systems?

“Energy payback” refers to the relationship between the amount of energy a solar panel produces and the amount of energy that went into its manufacture. On average, the time it takes for a PV system to create the same amount of energy that went into its manufacture is anywhere from two to five years. Because well-made PV systems will operate for two decades or more, they generate far more energy than the amount that goes into making them.

What is net metering? And why is it so important?

Most solar panel systems are hooked up to the municipal electricity grid, and are therefore called “grid-tied” systems. Net metering ensures that the local utility will purchase any excess electricity that you produce. PV systems create real value in this way by offsetting your monthly electricity bill. One of the first steps to take in deciding whether to get solar is to figure out what your state’s net metering policies are; 42 states participate in net metering to some degree, and the DSIRE website can tell you precisely what policies apply in your area.

What if my state doesn’t require net metering?

While all but eight states offer net metering, only a few require all state utilities to participate. If your local utility is not required to buy back excess power produced by residential solar systems, chances are, now is not the time for you to invest in PV panels. This situation is likely to change, however, for the following reasons: (1) the price of energy generated from conventional means will continue to rise, making options like solar and wind energy more attractive; (2) solar technology is getting more efficient everyday and the costs associated with manufacturing are falling; (3) the number of states that enact statewide net metering legislation is likely to grow.

NOTE: Even if your state doesn’t require net metering, solar thermal systems remain an effective and cost-efficient option.

What’s an inverter?

Photovoltaic systems create direct current (DC). In order to make use of this form of electricity it must be converted in to alternating current (AC), the type of electricity we use in North America. For a grid-tied, non-battery system (the most common type of PV installation), this is achieved by installing an inverter. High-voltage DC inverters are the least expensive to wire, and only in special circumstances would you require a low-voltage inverter (when there’s more than three panels, shade, or batteries). In general, the most cost-effective grid-tied non-battery inverters are those in the 2- to 6-kilowatt range.


What does “energy conversion efficiency” mean?

In reference to solar power, conversion efficiency refers to the percentage of sunlight that a particular system is able to convert into electricity. Silicon-based technologies average around 12 percent, although some prototype technologies are achieving conversion rates of 20 percent or more. As a point of reference, your car’s energy conversion rate is about 20 percent.

How do I choose the right size for my PV system?

The best way to figure this out is to discuss your particular needs with a photovoltaics professional and have him or her do a solar-power consultation. Click here to search for a qualified professional in your area.


How long do PV systems last?

A quality PV system will last for over 20 years. PV modules—the actual panels—generally last for over 30 years. Inverters may require replacement around year 15. Many manufacturers offer a 25-year warranty on their installations.

How much electricity does a PV system generate?

The greater the area of PV panels, the more electricity is generated. A 1.5-kilowatt system, for example, produces about 2700 kilowatt-hours a year. Over a 25-year lifespan, this comes out to be 67,500 kilowatt-hours.
 

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