It is exciting to see solar photovoltaic making a strong comeback. Gone are the clumsy installations that plagued the 1970s and welcome new, innovative applications that are integrated into designs. Around the nation and globe, municipalities, commercial projects and homeowners are tapping into this “free” energy but how much does solar really cost?

There are many variables that go into the answer. Where you live, how sunny it is and how much electricity you need are all at the top of the list. While solar can be used almost anywhere, the cost is impacted by how much sun your home receives throughout the year. Add to that whether you want to be on or off grid. Off grid has a great sound to it but on the grid systems offer flexibility with size and cost.

It can get overwhelming to figure out a solid estimate but it doesn’t have to be. If you are going completely off grid, you’ll need a system that can meet all of your electricity needs – capable of producing enough kilowatts. If you are connecting to the grid you can size to meet some, all or more than your power needs and sell kilowatts to the utility company. Either way the first step to estimating the cost of your solar array is to determine how many kilowatts you want it to produce per year.

For the sake of simplicity, let’s say you want a system to meet all of your electricity needs. You can determine this by reviewing your utility bill which will tell you how much electricity you’ve used in previous years.

On average, solar photovoltaic installations cost about $7 per watt, $9 per watt with professional installation. If your electricity needs are 8,000 kW per year you can expect to pay around $56,000 for the system or about $72,000 if you have it installed by a contractor.

There are many variables to consider when looking at overall costs. If you are opting for a grid-connected system you’ll have the opportunity to size for a smaller array that produces a portion of your electricity and purchase any extra from the utility company. This arrangement also allows you to sell any excess electricity that your solar array produces. The extra kilowatts are sent into the grid and you are credited per kilowatt, helping offset the cost of the array.

There are also state and federal incentives for homeowners who install renewable energy systems. Some states offer rebates that can reduce up to half of the initial costs of a solar photovoltaic system. Both stand alone and grid-connected systems offer an opportunity to save money even though they require an upfront investment.

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*Note: The information in this article is general advice and not meant as a substitute for personal guidance from a financial advisor, real estate professional, general contractor or legal counsel. Although the author is a licensed realtor, the advice given in this article does not constitute any client contract or agreement between the author and the user. The author is not responsible for any losses, damages or claims that may result from your decisions.