Article Author: Meghan Harmon, Director of Marketing & Media
You’ll hear the same thing from every company you call with this question, “it depends.” This isn’t just a ploy to get your personal information and bombard you with sales calls. The final price of a solar system really does depend on a number of factors. The system’s size and orientation, equipment options, configuration, labor costs, and local permitting costs all come into play. The size of the solar system being the most important factor, which determined by your family’s individual needs.
What Determines The Cost
When you receive a solar quote, it will be given to you based on a DC measurement. A simple way to break down the cost of solar is to calculate a price per DC watt. This is used frequently with solar companies in the industry when quoting systems. It’s a simple formula: the wattage of the panel multiplied by the number of panels in the system. For example, if you take a system with 25 200-watt panels, your system size is 5,000 watts.
The Central Valley of California has competitive solar market, and prices vary drastically from company to company. In the year 2017, solar companies are quoting people anywhere between $2.50 to $4.00 per DC watt for a solar system. Given that the size of an average residential solar installation is 5.0 kw, it would cost someone $12,500 to $20,000 to have solar installed on their home this year. This is without the federal tax incentive, which can lower the cost another 30% if you are eligible.
The Solar Energy Industries Association states, “The Solar Investment Tax Credit (ITC) provides industry stability and growth since its initial passage in 2006”(seia.org). Starting January of 2020, this credit begins to decrease (26% in 2020, and 22% in 2021) before it is projected to disappear all together in 2022 for residential solar. This 30% credit is only applicable if you are able to recover funds from a tax credit. Please consult your tax professional for verification. This can have a significant impact on lowering the price of a system for qualified homeowners. This may push many residents to go solar in the next few years before the policy comes to an end.
Usage & Energy Bills
The most important piece of information a sales consultant will need when pricing a system for you will be your energy usage in kilowatts. Many times this information is given to the consultant over the phone or at the time of consultation, along with your past 12 months of utility bills. From there, the consultant can design a system of appropriate size to offset your usage.
It’s simple: produce the power you need as inexpensively as possible, without sacrificing quality of equipment or workmanship. Some of our clients come to us knowing exactly what they want when it comes to equipment selection. However, the majority people are only beginning the research process.
Fortunately, our team of consultants are qualified to select the best panels and equipment based on your energy needs and financial situation. We also make it our primary focus to do honest business with our customers. This means not over promising and under delivering. You may have heard “not all solar panels are created equal”. This doesn’t mean you have to spend and arm and a leg to get a highly-efficient, great looking solar system installed. If you need help getting started on your research, visit our blog article What Solar Panels Do I Buy? at → http://bit.ly/2rxF9pA.
Roof Space & System Orientation
The second most important thing you can provide your sales consultant with is your home address. This can be is used to view your roof online and map out possible locations for the solar system. If you schedule an in-home consultation, your salesperson can better view your home’s roof condition and layout.
Using fewer panels to produce the power you need results in a smaller and less expensive system. South facing arrays are best for solar, since that is where panels absorb the most sunlight hours. If you do not have sufficient space on your roof for the size of system you need, there are other affordable solutions available.
A payback period is how much time it takes to “break even” on the investment you’ve made. According to experts, “The average payback period for a residential solar electric system is between 6-9 years. This depends on the cost of the system and the utility bill savings” (energycenter.org). The good news is, the price of solar has dropped 10% in the last year alone. At the same time, the price of energy usage seems to be steadily increasing. This gives valley residents a real reason to invest in renewable energy. If you’re interested in how to get the process started, we’d love to provide you with some free information and a quote for owning your own solar system.