Note: The information contained in this periodical weblog may be outdated. This was my personal weblog published before January 1, 2015. Since then I have been the co-owner and Principal Solar Designer at Florida Solar Design Group.

The Cost of Solar Electric Systems

You may have received emails recently promising solar electric at unbelievably low rates. Unbelievable is the key word!

Some recent announcements:

  • Solar panels for under $1 per watt!
  • 58 cents per watt for Solar Laminates!
  • PV Systems under $5,000!

These announcements are playing off the fact that most people think solar panels constitute the vast majority of the cost of a solar electric system. Some websites even report that solar panels represent about half the cost of a solar electric system. These ideas are just plain wrong.

It’s true that you can get solar laminates for 58 cents per watt in any quantity. What is a solar laminate? It’s a solar panel that is not framed. In other words, no aluminum, no glass. Does it produce electricity? Yes, it does. Unfortunately, it can’t be mounted on your roof, it is not UL listed, and it is illegal to install it to supply power to a structure. No licensed contractor would sell you this product and install it at your home.

Can you get solar electric panels for under $1 per watt? Yes, you can. Some of the cheaper brands do wholesale for right around $1 per watt today. The better brands are only slightly higher. The truth is, you can buy solar panels for pretty close to my cost. The Internet has made that possible. The problem is, the solar panel represents only 20-25% of the total cost of a legal, permitted, installed system.

Some of the other costs of a solar electric system include design, engineering, permitting, racking (mounting hardware), the inverter(s), grounding hardware, wiring and conduit, disconnecting means, utility interconnection hardware, monitoring systems, freight, and labor/overhead/profit. Reputable dealers have significant costs to consider like insurance, licensing, and office personnel to coordinate service after the sale. After all, you do want your installer to be around for the 25 year life of your system, right?

Can you really get a solar electric system for under $5,000? Sure you can! Caveat: it will be small and produce little energy and this price is after incentives and tax credits. It will make just a small dent in your monthly electric bill. You have to come up with the full purchase price up front or finance the full purchase price through same-as-cash, loans, or leases.

The bottom line is that you get what you pay for. While prices have come down significantly recently, there is no magical $1 per watt system out there. Solar electric panel costs have come down so much that they now represent a small fraction of the total cost, and any further cost reductions will result in smaller and smaller price drops. A 10% drop in solar panel prices today would result in a 2-3% drop in the overall system price.

 

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