Alternative Eenergy Today

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 when you install solar power, how much do you actually have to generate to say cut your bills by 50%? And what kind of costs will you be looking at?

Here is a four step process that you can follow to answer these two vital questions:

1 – How Much Power Do You Use Per Day?:

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. The calculation would be to add up the power used over the past 12 months and divide it by 12. 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.

- Let’s use an example: If our monthly energy usage is 800kWh, then the average daily power used is: 800/30 = 26.7 kWh a day.

- So to reduce your electricity bill to half, 26.7/2 = 13.4 kWh of solar power per day is needed.

2 – Calculate Total Solar Panel Watt Needs:

To work this out you are first going to look at an insolation map to see the average usable hours of sunlight your area receives each day. A map is available on our website.

Your next step is to take the daily kilowatt hours needed and divide it by the average usable sunlight hours, then multiply that by 1.25 (this is used to take into account the inefficiencies in the solar power system from wiring, charge controllers, batteries, and inverters).

- From the previous example, if you live near California where the average daily usable hours of sunlight is 5.5 hrs, the solar wattage needed is:

13.4 kWh needed / 5.5hrs of sunlight x 1.25 = 3.045 kW or 3045 Watts a day.

This indicates that our home solar power system must have the minimum capacity to produce 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 – Take Government Rebates and Credits Into Account:

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.

- Using the same example: For a Californian to buy the solar panels, they would receive a state tax rebate of 20% of the cost, and a federal tax subsidy of 40% of the remainder. So, the investment in the solar panels would only be:

$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).

However, from the example, you can see that for Californian to reduce their power bill by half, they would have to buy $14,768 worth of solar panels, costing them $7089 after rebates. A cheaper option would be to learn to source affordable and even free solar cells, and build your own solar panels. This can be done by following a relatively inexpensive step-by-step solar power manual, such as Earth4Energy.

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