5.4 kW grid-tied

Cost of PhotoVoltaic (PV) Systems

Because of the previous high cost of photovoltaic (PV) panels, their use has been limited to rather specialized and unique purposes. PV panels have and continue to be used to power satellites, and remote sensing facilities on earth where traditional energy sources such as electricity provided by power plants was unavailable.

In the 1970s those PV panels that were used to power satellites cost close to eighty dollars per watt. By the turn of the century the cost of panels was down to the vicinity 8 dollars a watt. And the price continues to drop.pvcost When I put in the panels to power my home in 2008 the cost was around five dollars a watt.

The current cost of PV panels is now approaching one dollar a watt for small home scale systems. This results in a system payback time of about ten years. Imagine, you pay one upfront cost for for a system, it pays itself back in about ten years, and you have free electricity for the rest of the life of the panels which is well over 25 years!

So lets talk about the nuts and bolts of a system. It consists of three components, the PV panels which produce direct current (DC) electricity, an inverter to converter the DC to Alternating Current (AC), the stuff that powers you home, and storage for when the sun isn’t shining.

If a home is already connected to the grid then storage isn’t an issue. A “grid-tie” can be used as the storage, eliminating the considerable cost of batteries. The net metering law in Arkansas allows producers to utilize a bi-directional meter. When the sun isn’t shining power is drawn from the grid, when the sun is shining the meter runs backwards, crediting the production. A system can be sized to produce as much energy as is consumed.

And it doesn’t matter how big the system is, it always pays off in ten years or less. A larger system will cost more, but produce more so the break even point is the same regardless of size.

The average home is Arkansas uses about 1000 kWhs per month and hence has an electric bill in the vicinity of 100 dollars a month. Here is an illustrative calculation for the cost of a system to totally cover the electric needs for that household. The panels for a PV system should cost about 10 grand. Add in about 2 grand for a system inverter, and another 3 grand for installation and you get a total cost of about 15,000 dollars. There is a 30 % federal tax credit, a credit not a deduction, which will then lower the cost of the system to about 10,500 dollars.

For this household the system will generate all the energy needed to offset the billed amount of electricity, saving the consumer, now a producer, 1200 dollars a year. The payback time is less than nine years. And the system will continue to produce at this rate for two or three times as long as has been paid for already.

Do you have access to the southern sky? Then your roof, or open space can be utilized to pay for your electricity, and the cost can be spread over the life of the system. In the future companies like Entergy will be mainly involved in distributing energy, rather than producing it. Production will be at home.

Power to the people.

1 thought on “Cost of PhotoVoltaic (PV) Systems

  1. Dr. Luis Contreras


    I joined the Save The Ozarks petition to intervene to stop all the SWEPCO April 3, 2013 application to the APSC. I am not in their board. My point of view is that we need 3 to 5 million dollars for lawyers. Instead, I am committed to stop SWEPCO before the July 15 public comment hearings at Eureka Springs, AR. I need your help to have an alternative solution for NWA ready by 2016 based on Distributed PV Solar power – no transmission lines. Please read below:

    Imminent Threat to the Quality of Life in NWA and the Ozarks
    Dr. Luis Contreras
    (512) 922 – 9281

    The mighty Arkansas Coal Cartel, SPP/SWEPCO/AEP/Carroll Electric Cooperative, with the help of the public officials that have chosen to remain silent, plans to destroy the quality of life in the Ozarks. If we don’t stop this criminal attack on our community by July 15, 2013 the SWEPCO out-of-state crews will burn on-site 450 Million cubic feet of biomass equivalent to 140,000 18-wheeler flat bed trailers to clear 48 miles of 50 yard right-of-way (ROW). In addition to soil erosion and water contamination on our Karst topography, the CO2 sink provided by 800 acres of trees on the ROW, that produce enough oxygen for 14,400 people to breath for one year, will be gone forever!

    The deadly smoke from 2014-2016 will put at great risk the health of our children and anyone with COPD, Asthma, Emphysema, and other respiratory health problems. We need your help. We are not going to let this happen. Please contact me with ideas.

    Japan is now the world leader in distributed Solar PV power. They learned the lesson of relying on centralized power plants. The new PV Solar panels will provide the equivalent of seven nuclear reactors. We need to follow their example and stop the Arkansas Coal Cartel from destroying the Ozarks.

    We urgently need your help. We are doing all we can but the local community does not have Three Million Dollars for the legal and unfair fight. Paying lawyers would be a waste of money since SWEPCO is determined to build this line.


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