Tag Archives: PV

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.