Home Solar Panels

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Colorado State University has announced that it has found a method of creating one dollar per watt solar panels that should come to market the end of 2008. Below is the calculations to figure out if installing these new solar panels are cost efficient.

Calculations

Currently it cost $1.00 per SolarWatt for the solar panels (not including the other equipment). One SolarWatt on a solar panel produces 0.005 \frac{kWh}{day}. Then $1.00 per 0.005 \frac{kWh}{day}, which equals $200 per \frac{kWh}{day}

On average our household use 11 \frac{kWh}{day}. To supply our electricity from solar panels it would cost \left ( \frac{$200}{\frac{kWh}{day}} \right ) \left (11 \frac{kWh}{day} \right ) = $2,200.

The U.S Federal government gives tax credits of 30% on solar array purchases for homes. Therefore $2,200 * 0.30 \, = $600 off the price would be: 

  \begin{matrix} \underbrace{$2,200}  &  - & \underbrace{$600} \\ 
       initial \, cost  &  & Federal\, tax \, credits\, \end{matrix}
    = $1,600 solar panel cost


Comparing the cost of electricity from the public grid to solar electricity, it would take 3 year to pay back the initial investment.

Our household uses \left ( 11 \frac{kWh}{day} \right ) \left ( \frac{364 days}{1 year} \right ) = 4004 \frac{kWh}{year}. Currently it cost $0.13 per kWh in California. Therefore it cost ($0.13) \left ( 4004 \frac{kWh}{year} \right ) = $520.52 per year. Taking the inital investment of the solar panels by the the yearly cost of electricity from the grid gives how many years it takes to repay the solar panels 

  \frac{$1,600 \, solar \, equipment \, cost }{$520.52 \, yearly \, eclectic \, bill}  = 3 years and 25 days return on investment

After these 3 years your electricity will be payed for for the life of the home or solar panels. Solar panels are said to last around 30 years. Lets say you live in the home for 15 years. 

 $520.52 yearly electric bill *  15 years - $1,600 solar panels cost = $6,207.80 in savings

Then after 15 years you will save $6,207.80 on electricity. That is if the cost of electricity stays the same. And don't forget the environmental benefits of renewable clean natural energy.

Federal Tax Credit

The Federal tax credit gives you 30% cash back on the solar array purchase with a $2,000 cap for homes (no cap for Businesses so talk to your work!).

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