Let's start with material cost. Except for the photovoltaic panels, the cost of other components - such as inverters, batteries and other hardware are almost constant and you can find them at a great deals, which leaves us to the photovoltaic (PV) panels. The cost of commercial photovoltaic panels are based on dollars per watts. The prices for panels have been falling continuously over the years, more so in the last one year or so. You can now find panels with costs in the range of $2-$4 per watt depending upon the company that manufactures them.  Just for illustration, prices of photovoltaic cells were $150 per watt in 1970 and about $10 per watt in 1998. Thanks to the engineering advancement in solar power technology, governmental incentives for renewable energy, mass production by solar power company, and the rising demand for alternative sources of energy, the prices for solar panel are falling continuously to bring the the overall solar power cost.

Lets do some numbers with a simple example. [For simple illustration, we are making few assumptions and  will add them as a percentage factor. Careful consideration has to be made to arrive more accurate figures].

Step1: Pick up you electricity bill for the last 12 months. Add all the kwh of electricity you have consumed and divide by 12 to get an average monthly kwh requirement. This is the average amount of energy you consumed in 30 days (for sake of simplicity). Lets say it comes out to 1200 kwh or 1,200,000 watt hour.

Step 2: Convert the monthly consumption to daily consumption, which will be 40 kwh or 40,000 watt hour. This is the amount of electricity you need to produce per day from sunlight. You can only produce electricity during daytime, so you need to produce all of during daytime ( peak time of sunlight) , then either store energy during daytime or give it to grid so you can take it back during night time.

Step 3: Find out the average duration of sunlight per day. Lets take this a 5 hours.  [Point to be noted - days are pretty smaller in winter months than compared to summer months].

Step 4: Divide the amount of electricity needed per day (Step 2) to number of hours of sunlight (step 3), which in this case is 8kW or 8,000 watts.

Step 5: Look for panel specification and find out the wattage. Lets say you can find a panel with 400W power output. What this mean is that on a bright sunny day, the panel will produce maximum of 400 watts of power in 1 hour.   

Step 6: The final step is to divide the hourly output  by panel specification wattage, which will give you an approximate number of panels required. In the above case, it will be 8000 divided by 400 equals to 20 panels.

Most of the commercial panels for home solar power plant are made from crystalline cells and have higher efficiency output, but higher cost too. You may choose to make your own low cost panels from amorphous cells, which is very cheap comparatively.   Decision to buy solar panels from maket or building them yourself is entirely your personal choice, depending on how much you want to save. There are some very good guides available on how to make your own solar panels using solar cells.

You will now need to capture the cost of other items and  accessories like inverters, solar charger, charge controller, battery backup, conductor wires etc. You can find the prices of these items at our solar store.

Before you finalize your cost, there is one other consideration - whether you will  live off grid or grid tied or grid tied with battery backup. Your choice will depend if you have Utility power lines in close vicinity to your premises. If you live in remote location, then you really have no choice but to be off grid. You would need a good battery stack as well as secondary source of power such as a electric generator for those days when sunlight is not enough to provide enough power. The grid tied system has become more popular recently, where in, you divert extra power produced to the utility company during day time and consume power from grid during night time.  You will install net meter to keep track of power given to Utility company and power taken from them.

With solar power, most of your cost is an upfront cost with no monthly electricity bills, as compared to utility company provided electricity, for which you have to pay bill month after month, for as long as you buy electricity from them.  The good strategy, then, is to reduce your upfront cost to as minimum as much as possible, which can be achieved, if you would like to wear your handyman hat and built panels yourself. There are some good guide available, which comes with videos and detail instruction on building your own solar panels. A $50 investment can go a long way in helping you save thousands of dollar in a long run. Another thing that can bring down your cost are the tax incentives and rebates from the government.

Hope that is enough to get you excited or at least start thinking towards being energy self-sufficient.

Each home has a unique power requirement. If you can calculate what you would need and how much you need , you can come pretty close to an estimate on how much money you need to spend. The good news is that all this investment can pay for itself in few years and then you can enjoy free electricity for life.