Pricing a Renewable Energy System

One of the first questions that people have when contemplating whether or not to take the plunge and convert their home to renewable energy is "how much will it cost?". This is difficult to answer directly because there are a lot of factors to consider. Some of them are:

  • How large of system do you need to meet your daily energy needs?
  • What type of renewable energy power source do you plan to use?
  • Are you going to buy the top of the line components?
  • How large of battery bank do you intend to use?
  • What voltage of system are you thinking about setting up?
  • Are you going to be tied to the grid and sell your excess electricity back to the power company?

You can see why it can be a bit difficult to give a generic estimate as to how much it will cost. The variables are too great to guess at. That doesn't mean it can't be calculated before you decide to take the plunge.

The first thing that one needs to figure out is what their daily energy requirements actually are. The easiest way to do this is to analyze the last years power bills. The bill will include the number of kilowatt hours that you used for the month. A kilowatt hour is 1000 watts of electricity being used for one hour. If you ran 10, 100 watt light bulbs for an hour straight, you will have used 1 kilowatt hour of electricity.

The next thing you need to do is calculate how many solar panels it will take to generate enough energy to get you through a typical day for your area. It will take fewer solar panels to supply your energy needs if you live in Arizona and your rooftop faces directly South than if you live in a forest in Oregon. The reason for this is very simple. In the Arizona scenario, the sun is more likely to shine directly on the solar panels for more hours during the day.

Next you need to calculate the retail cost of the solar panels. If you need 20 and they cost $800 each, your cost would be $16,000.

Next you need to decide how what charge controller you will use and find out what it will cost you.

Next you should decide how large of battery bank you will need. A general rule of thumb is to size the battery bank large enough for four or five days worth of power in the event that a storm rolls through your area and clouds up the sky.

Now you need to know what power inverter you plan to use and price it with your favorite renewable energy supplier.

Don't forget that you'll need wire, fuses, meters, and connectors to complete the system. Figure out what you'll need and multiply that cost by the per foot cost that your supplier will charge you.

In many areas of the country, the building codes will require that a licensed contractor install your components. Get several bids from local contractors and choose the lowest bid from one with a good reputation. You don't want to hire Bubba The Builder if he has a bad reputation just to save a couple of bucks.

Now add up all your costs and you'll have a rough idea of what your initial investment will be. If this seems like a daunting task, there are companies that will do all the work for you. You might pay a bit more for their services but you'll save yourself a lot of the headache of planning the system as well.

After you buy the supplies and your contractor installs the system you're ready for life without a power bill and the warm fuzzy feeling of knowing that you're helping to make the world a better place to live. One might ask how long it will be before you recoup the cost of installing the system. Keep in mind that it will generally be several years before the you break even.

One thing to keep in mind that many areas will offer you a sizable break on your taxes if you install a renewable energy system on your home. Figure out what that will be for you and subtract that number from your initial investment. Now calculate what your monthly power bill was running you, and divide that number by the remainder of what you have invested in the account. That will tell you how many months before the system pays for itself. Divide that number by 12 and you'll know how many years that it will take to break even.

Choosing to install a renewable energy system requires you to have a "pay it forward" way of thinking. Sure you'll eventually recoup your money but the main thing to consider is that you're doing your part to make the world a better place for your children and their children. How can you put a price on that?

Saving on your power bill is nice but saving the planet is priceless.

Renewable Energy Poll

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Renewable Energy Video

Here's a good video about installing solar panels on a roof that you might enjoy watching.

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What did your renewable energy system cost you? 2 comments

quiethorse 7 years ago

I think it's too expensive to get into this.


NickSimpson profile image

NickSimpson 6 years ago from Jacksonville, Illinois

There are more and more government kickbacks to assist with the cost of going green. I hope there are more government programs coming in the future, many people do not see the importance of this technology now, but they sure will when it's to late. I think that if we have to use US government dollars to bribe Americans to make the right choice, then so be it.

Awesome hub by the way!

-Nick

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