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Photovoltaic Economics
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How much does a PV system cost?
The cost of a PV system depends on the system's size and the types of components. The table below lists average equipment prices for grid-connected PV systems in the US (Source: California Energy Commission's Buying a Photovoltaic Solar Electric System, A Consumer Guide).
Grid-connected systems (batteries excluded)
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< 1 kW |
1-5 kW |
> 5 kW |
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$/Watt
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$9/Watt
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$6.50 - $10/Watt
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$6 - $8/Watt
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Total
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$900 - $1,000
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$13,000 - $50,000
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$30,000 - $40,000
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These prices are estimates only. The actual cost of a PV system will depend on whether the PV system is integrated into the roof-top material or mounted on top of an existing roof, the system configuration (i.e. standardized systems offered by some PV retailers generally cost less), equipment options, installation costs, and the PV manufacturer.
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Is a PV system cost-effective?
PV systems can be a cost-effective alternative for remote and grid-independent applications. However, compared to utility-generated power, costs are relatively high. For example, the simple cost savings value of a PV system can be calculated as follows:
EXAMPLE:
Let's consider the same PV system described in How much electricity can a Solar Electric system produce? Using an average SVP system cost of $7 per watt (or $7,000 per kW) the simple payback for this system is calculated as follows:
=($7,000/kW x 2 kW) / ($223) = 63 years
Grid-connected systems, however, have value beyond cost savings and environmental concerns.
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Can customers get credit for producing their own electricity?
Yes. The energy that is produced by a PV system will first serve a home's electrical load. However, if the PV system produces more electricity than the home needs at any given time, SVP credits the excess electricity to the customer at the same price they would pay for electricity from SVPin effect turning the electrical meter backwards. This is called "Net Metering," and the credit will appear on the monthly utility bill from SVP with an annual "true-up." Any credit is zeroed out at the end of the 12-month period. Should the home need more energy than the PV system is producing at any given time, the customer can be assured that SVP will provide the electricity that the home needs.
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Will a PV system increase property taxes?
No. PV systems installed before 2006 will not be subject to property taxes (California Revenue and Taxation Code, Section 73).
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Will a PV system require additional insurance?
If you are installing a grid-connected PV system, you must complete an interconnection agreement with SVP. As part of this agreement, homeowners must provide proof of insurance coverage for their system. However, most standard homeowner insurance policies provide adequate insurance protection and meet the minimum requirements stated in SVP's interconnection agreement.
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