Economics of Solar PV for a Homeowner: Doing the Math

When I tell people I installed a solar photovoltaic system, I am quickly asked, “Is it economical?” A year ago, the answer might have been no, but there are a number of monetary incentives that have reduced the cost so that your final cost is greatly reduced. These rebates/tax credits/Renewable Energy Credits vary from locality and utility company. Some only apply if you are connected to the grid.

I live in a six-year-old 2000 sq. ft. single story house in St Louis, MO. It was designed with conservation and universal accessibility in mind. As a result, my utility bills are extremely low. Before the solar install, we consumed between 2,950 – 3,175 kWh annually with a total annual electric bill, less than $300 for the year. We have and use air conditioning. Natural gas bill is about $600 for the year.

I had a 2.1 kW photovoltaic system installed for ~$6/watt for a total cost of $12,350 inclusive.

AmerenUE provided a $4,230 rebate ($2/watt).

The Federal Investment Tax Credit (ITC) of 30% is $3,705.

SREC’s (Solar Renewable Energy Credits) upfront (one time) payment from AmerenUE for 10 year’s SERC’s is $2,700.

Final Installation Cost

$12,350 – $4,230 – $3,705 – $2,700 = $1,715

The life expectancy of the solar panels is 20+ years. The inverters will probably need replacing around 15 years.

If we look at the installation cost spread out over 15 years (I did not take out any loans), it comes out to $115/year!

Read on – Download a .pdf copy of the complete article – Click Here

Jim Jordan currently serves on the board of directors for Show Me Solar as Director for Educational Outreach.  Jim’s home is universally accessible, energy efficient and in June 2010 he added a size appropriate solar electric system.  Jim shares his sustainable lifestyle by hosting solar workshops and tours at his residence in Maplewood.