[see Forum Thread
this is taken from for more]
PV Solar systems, fully installed, average around $3/watt depending on where you live. See What should you pay for a Solar Installation?
So, what do you pay for power
? The cheapest states in the U.S. are Washington/Louisana, around 9.73 cents kWh.
So, let's run through the math for the cheapest state, then you can look up your state for the costs and see.
Let's assume you live in lake Charles, Louisana and have $100/month electric bill for just the power (not taxes or other charges) over 30 days. In that case:
$100 / 0.0973 / 30 = 34 kWh/day
Using an insolation map
you can get a precise number, for Lake Charles that looks like it's about 5. So 34 kWh/d / 5 = 7kW array to zero out your bill. For Louisana the average install cost is around $3.03/watt, so a 7kW array installed would cost $21,210. If you do parts of this yourself, you can reduce the prices.
At $100/month, and not counting for inflation, that's $1200/year. So, the system would pay for itself in 17 and a half years. Since the panels would last 25 years that doesn't sound too bad. But, in 2020 the federal government has a 26% tax credit, is $15,700; so it pays for itself in 13 years. A lot of states also have incentives that can also reduce your costs.
Solar is usually cheaper then the grid and generally has a positive ROI
That is if your house uses 34 kWh/d it's generally cheaper to use solar to generate that 34 kWh/d than buy it from the grid.
Why doesn't everyone go solar?
The statement above doesn't include energy storage, so you need the grid
for non-solar hours. Some locations have "net metering", which means you can generate that 34 kWh/d during sunshine hours and run the meter backwards, then at night the meter runs forward and you end up not owing energy charges (but you'll still have a utility bid that charges for the energy distributions and such). Still, if you can get that sort of deal solar can be well worth it, but beware as some states that had it are doing away with it.
On the other hand, if you can't then solar is only good to provide the power you need during the day. Most people are at work during the day, so generally that's not a whole lot of power savings. The cost savings of solar don't yet overcome the costs of storing energy, so typically any storage system kills the cost savings.
Costs of Time
Obviously that's not the whole story. There's inflation on the cost of electricity which will make the payback period shorter. If you put the money you'd spend on solar into a CD at a fixed rate of 5% how does that compare to the cost of solar? Some states have time of use rates; some states are doing blackouts for days at a time. You have to look at it all to know if it's right for you.