Courtesy of DOE/NREL

Part 6 – Cost Comparison – Fossil Fuel Generated Electricity VS Solar (PV) Generated Electricity

In the last segment, I calculated an approximate cost for a solar electric system sized to provide the same amount of electricity I now use in my home. In this segment (Part 6), and the last of this series, I spread the cost over the estimated life of the system (30 years), and compare it to the amount I’m currently paying for my electricity (fossil fuel generated). Hopefully this will provide a real-world cost comparison between fossil fuel generated electricity and PV solar generated electricity.

In segment one of this series I determined my total electricity use for the previous year and the cost of that electricity. The electric power use for the year was 8455 kWh at the cost of $1701.12. This is an average monthly use of 704.59 kWh of electricity at a cost of $141.76 per month. In the last segment I determined the cost of the solar electric system and after subtracting the Federal tax credit and State rebate, my cost was determined to be approximately $23,171 ($41,822 – $18,651 = $23,171).

At $23,171 for the system, divided by $1701.12 (cost of my home electricity for previous year), the payback works out to be just under 14 years (excluding the interest you may have to pay on the initial capital cost). This means that the remaining 16 years in the 30-year life of the system would pay out an additional $27,000 for the homeowner.

Although I didn’t take into account the amount of interest on the initial capital cost, that amount would probably be more than offset by the rise in energy cost over the next thirty years. With the proper care and maintenance you could have your own electrical generator in the home for at least the next 30 years. As for required maintenance, you should try to clean the panels at least two times a year, at the end of the rainy season and towards the end of summer because a 10-15% decrease in solar output can be noted when panels are dirty.

The energy cost and consumption for this analysis comes from one years worth of electric bills provided by an average homeowner. The conclusion of this analysis is that the PV solar system would pay for itself in just under 14 years and then provide, basically free power for the remaining life of the system. The payback of 14 years is a long time, but when considered over the life of the system, the remaining 16 years provide an excellent return on the investment.