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The Price of Home Solar Energyby Lawson SchallerIt is probably safe to assume that traditional petroleum based energy and centralized electrical energy will not produce lower costs over the long term. As those costs rise, the expenses of home based or decentralized solar continues to look more and more attractive. Current electrical rates in areas of SLO County are around 11 to 13 cents per kWh for the first tier or two of pricing. The third through the fifth tier run approximately 25 to 45 cents per kWh. Clearly, monthly costs can vary greatly based on usage. Once you enter the upper tier pricing (for some at peak hours) and have lots of gadgets running, the bill goes up fast. My wife and I do not watch television, have no microwave, air conditioner, or other high power use electronics. Our older fridge is an energy hog and we are going to replace it with an energy star efficient unit. Our stove, water heater, dryer, and furnace are gas, though we rarely use the furnace or dryer. Our monthly electric bills range between $25 to 45/month. A friend - who lives in southern California with two children, two fridges, multiple televisions and computers, and an air conditioner - has electric bills that run in the hundreds of dollars. Payback on a solar system can start to look pretty good when you are forking out hundred dollar bills for electricity each month. Solar costs per kWh can also vary based on:
A local solar representative stated that an average cost, in general broad terms for home solar, is around 16 cents per kWh. A very broad price range for an average system might be from $10,000 to $20,000. No doubt the DIY (do-it yourself) folks can put together a small system for much less. According to the sales rep, payback period for the $10k to $20k system might be around six to 12 years. This can vary greatly based on size, quality of equipment, financing terms, etc. A recent article in Home Power magazine showed cost per kWh around 20 cents for a larger (500 kW) battery-less system in a sunny climate. That cost roughly doubles to 45 cents in a cloudy climate. Smaller systems (2 kW) with battery back up in a sunny climate have a cost of about 36 cents per kWh. What I found most interesting in talking with the rep is that many systems or components manufacturers will guarantee approximately 80% production after 20 or 25 years. So, it seems there are some very robust systems out there. Consider calling your local solar dealer and ask about rebates and other incentives to get a system. Some government incentives are phasing out or decreasing over time, essentially providing greater inducement to invest and install sooner rather than later. Importantly, recently signed California legislation AB 920 and SB 32 will require power companies to buy the excess energy that your solar system creates. My understanding is that prior to that legislation, any excess power went back to the grid, gratis! This legislation is one more incentive to invest in solar. |
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