How to Calculate Solar Panel Watt Costs
With our current economic melt down and energy prices fluctuating daily, many of us are thinking of installing solar panel power to contribute to our homes' energy needs, and reduce our power bills.
But how much solar panel watt power do we need to say halve our power bills? And how much will that power cost us to install?
Here is a four step process that you can follow to answer these two vital questions:
1 - Calculate Daily Power Used:
To do this, get your last 12 monthly power bills and calculate your average kilowatt hour (kWh) usage per month. The reason we use 12 is because our power consumption fluctuates with the seasons. But if you do not have all your power bills, then simply use last month's one.
Then divide your monthly usage by 30 (the average number of days in a month, to get your daily power used.
- So for example: If you have a monthly power consumption of 800 kWh, then your daily amount is 800/30= 26.7 kWh per day.
- Now if you want to only halve your power bill then you need to produce 26.7 / 2 = 13.4 kWh of solar panel watt power per day.
2 - Calculate Total Solar Panel Watt Needs:
To do this, you first need to determine how many usable hours of sunlight your area receives per day. This is where a solar insolation map comes in handy - you can view one from our original article on our website.
Once you know your daily sunlight hours, go back to your daily kilowatt hours needed and divide it by the daily sunlight hours, then multiply it by a factor of 1.25 (takes into account energy losses from the solar panel watt wiring, battery , and inverter)
- Continuing from our example: Our solar panel watt needs equal:
13.4 kWh / 5.5hrs x 1.25 = 3.045 kW or 3045 Watts per day.
This means we need solar panels with the capacity to produce at least 3045 Watts of power.
3 - Calculate Solar Panel Watt Costs:
This step will help you work out the cost of the solar panels needed to make 3045 Watts of power. At the moment the highest average cost for solar panels in the US is $4.85 per Watt.
- In our example: It will cost us at the most 3045 x 4.85 = $14,768 to install solar panels to halve our power bill. And that's before wiring, charge controllers, batteries, inverters, and electrician costs.
4 - Offset Tax Credits And Rebates:
Before we jump the gun and think it will cost us at least $14,768 for 3045 Watts of solar panel watt power, we need to take tax incentives and rebates in account.
With the new renewable energy tax credits going into effect from January 1, 2009, and state-side rebates from states such as New York, Connecticut, New Jersey or California, our solar installation costs will be much lower than expected.
- Let's use our example: If we were from California we would receive tax rebates of about 20% of the cost, and a federal tax credit of 40% on the remainder. So after rebates and credits, our solar panels would cost us:
$14,768 - $14,768 x (20%) - $14,768 x (1 - 20%) x 40% => $7,089.
Since there are many factors that go into calculating your solar panel watt costs, please only use our steps as a rough estimate. Some things were impossible for us to take into account, such as special offers by solar installation companies, where they offer you discounts on the full installation (including charge controller, inverter, battery, grid-tie electrician costs, etc).
Anyway, from what you can see it would cost us around $7,089 to buy enough solar panels to halve our power bill. We, instead, either get our solar cells at cost or source them for free, and wire up our own solar panels, which obviously saved us a lot of money. The good news is, anyone can learn to find cheap solar cells and make their own solar panel watt power.
Tim McDonald and his wife have been living off the grid since June 2008. If you want to learn to make your own solar panel power and save thousands on your electricity bills, then be sure to Try Earth4Energy For FREE, before you go out and start any renewable energy project.