When people hear I'm involved in the solar industry, they always ask whether they should put solar panels on their house. I don't actually know the answer to that -- I deal with the manufacturing side of things, which is far removed from what retail customers actually see. But a friend of a friend recently installed panels, so I jumped at the chance to find out more.
This particular installation used SolarBlend roofing, with panels by SunTech and installation by Eagle Roofing. It cost about $22,000 for a 4 KW installation. That's about $5.50 per watt, installed, before a 30% federal tax rebate. That's pretty good, and a substantial improvement from just a few years ago.
For the homeowner, though, the key question is how much electricity the array will generate, and how quickly the energy savings will pay back the cost. That's a hard one, because it depends on the climate. It's easy to see that western Washington gets less sunshine than southern Nevada, but even driving a few miles within western Washington will put you in a different microclimate. Fortunately, there's a very helpful resource, Gaisma, which merges astronomical and weather data to give solar insolation charts for many locations around the world. The installation I'm discussing here is located in Pahrump, NV.
Insolation is measured in kilowatt-hours per square meter, per day. That's the amount of light actually hitting a solar panel. Multiply by the area and conversion efficiency of the panel to get the amount of electricity generated:
Generated electricity = Insolation x Area x Conversion Efficiency
Suntech's Just Roof panels claim to produce 125 peak watts per square meter at 1000 Watts/square meter irradiance. So a 4KW installation will include 32 square meters of panels, and the panels are about 12.5% efficient. Plugging all of that into a spreadsheet, we get about 7150 kilowatt-hours per year from this installation. (Probably a bit less in practice, as panels are less efficient in hot weather.) That's probably more than an average household needs, especially if people aren't home during the sunniest part of the day. Which is why net metering -- the ability to sell power back to the grid -- is so important for residential solar installations. Let's assume that all the electricity generated by this array is either used on site or sold back to the grid.
The next step is to figure out how much the electricity is worth. That's difficult because many companies use tiered pricing: the more electricity you use, the more each incremental kilowatt costs. There is a push to implement time-sensitive pricing as well, reducing the cost for electricity use during off-peak hours. All of this is discussed in more detail here. For purposes of this discussion, I'm going to say the electricity generated is worth $0.15 per kilowatt-hour, for a total of $1072 per year, but that's just a back-of-the envelope calculation.
Without the 30% federal rebate, payback time for a $22,000 roof that generates $1072 worth of electricity per year is 20 years. With it, it's 14 years. The warranted panel life is 25 years. (This assumes that all of the $22,000 is for the array. Subtract any costs that would also be incurred by a conventional roof.)
For the sake of simplicity, I'm ignoring both the cost of money for the installation and the likely inflation in electricity costs over its useful life. I'm also ignoring any value that the installation adds to the overall value of the home. If we assume that electricity costs are going to go up over the next 20 years, then the combination of these effects should make a solar array more attractive, reducing the actual payback time.
Just for grins, I ran the same calculation for an installation in Bothell, WA. The relative lack of sun cuts the expected electricity generation to about 4850 kilowatt-hours per year. That's $727 per year at the same $0.15/kilowatt-hour rate.
Disclaimer: These values are estimates, and may not be applicable to any specific installation. If you are considering a solar roof, ask your installer to supply accurate cost and efficiency metrics.
Update: Michael Bluejay, author of the article on electricity costs linked above, emailed a link to the solar installation calculator on his site.