Calculating Basic Solar Panel Watt Requirements and Costs

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With the current economic crisis and energy prices increasing, many people are considering the idea of installing solar photovoltaic power to supplement their home’s energy needs, and reduce their electricity bills.

But how much solar panel watt power do you need to say reduce your electricity bill by 50%? And how much will that system cost you?

To answer these questions, here is the process our friend, Mat, went through to calculate his solar watt requirements, costs, and potential power savings.

1) Calculate Daily Electricity Usage:

To do this you need your monthly electricity bill, and calculate your total kilowatt hour (kWh) usage for the month.

Mat had a monthly energy usage of 650 kW.

Then divide this number by the number of days in the month, to get your daily kWh usage.

In his case it was 31 days, so 650kWh / 31 = 21 kWh per day. Mat wanted to halve his electricity bill, so he only needed 21 / 2 = 10.5 kWh of solar power per day.

2) Calculate Total Solar Panel Watt Requirements:

Click to enlarge.

To do this, first you need to find out how many usable hours of sunlight you receive per day. For your convenience, we’ve included a world solar insolation map – where you can roughly work out your area’s sunlight hours per day. Click here to see the large version in a new window.

Mat is from California, which receives approximately 5.5 hours of usable sunlight per day over the year.

Once you have your daily sunlight hours, get your daily kWh usage and divide it by your daily sunlight hours, then multiply it by 1.25*.

In Mat’s case it was 10.5kWh / 5.5hrs x 1.25 = 2.39 kW or 2390 watts.

* The 1.25 represents a 20% loss of power in the solar panel system due wiring, batteries, inverters, etc. This is an average estimate.

3) Calculate Total Solar Panel Cost:

The final step is to work out the cost of the solar panels. In Dec 2008, the highest retail cost for solar panels is $4.85 per watt.

So for Mat to reduce his electricity bill by 50% he would have to buy solar panels at a total retail price of $4.85 x 2390 = $11,592 ! And that’s not including the batteries, wiring, charge controller and inverter!

4) Take Tax Incentives Off Cost:

By now you are thinking that Mat would be crazy to buy solar panels to simply reduce his power bill by 50%. Well, thanks to government realizing the severity of global warming, they now offer state and federal tax breaks for households that reduce their carbon footprint.

In Mat’s case he could get a federal renewable energy tax credit of 40% (limited to $4,000) and a California tax credit of 10%. So, the retail solar panels will only end up costing him $11,592 x 50% = $5,796.

So you can see, there are many factors that go into calculating your solar panel watt requirements and costs. For Mat it would have cost him about $6,000 to reduce his power bill by 50%. But this is if he bought the solar panels. We, on the other hand sourced our solar cells at cost and made our own panels, which saved us a significant amount of money. The good news is anyone can learn to make their own solar panels and complete solar power system.

While Trudy and I have contemplated making our own step-by-step guide showing you how we did it, we feel there are already enough guides out there showing you the exact same thing. You can find out more about the top-rated guide by reading our Earth4Energy Review.

Originally posted 2008-12-10 13:07:22.

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