One of the things that puzzles a lot of people when considering going solar is the cost involved and just how it’s calculated. Let’s see if we can’t solve that particular puzzle here.

The reluctance of people to invest what can be, after all, a sizable sum of money in a new solar electric system without knowing just where their money’s going is perfectly understandable. After all, the total cost of an average sized solar energy system can be in the range of $20-30,000 before rebates, and that is a pretty hefty investment.

What should be remembered though is that this is an investment in the next 20-30 years’ worth of electricity, and does not take into account that a new system will generally have paid for itself within 5-10 years. It’s also an investment in the future of our planet and the reduction of carbon emissions from fossil fuels.

What’s An “Average Size” System?

For the purposes of this discussion, an average size system for a household of 3 or 4 people in a dwelling of 2-3,000 square feet is about 3 kilowatts. A 3 kilowatts system can supply up to 3,000 watts per day, which should be more than enough to power the electrical components and appliances of most average sized homes like ours.

Cost Breakdown By Percentage

We can calculate the cost breakdown of a new solar electric system pretty confidently based on the many installations performed over many years by the solar industry. As stated above, the cost for a 3kw system is around $20-30,000 depending on the components chosen and their functions.

So, the breakdown of components and their cost as a percentage of the total looks like this:

- PV panels (currently costing around $4-7 per watt) = 60%

- panel mounts, wiring, miscellaneous electrical items, etc. = 15%

- inverter = 10%

- installation = 15%

Let’s Look At Each Item

Solar panels are generally the most costly part of a new system due to the complexity of the equipment and the materials involved in their manufacture. The cost of panels has come down dramatically in recent years and will continue to do so as the technology improves, and a 200 watt panel costs around $1,000 each, which means we’d need 15 of these panels at a cost of $15,000.

The cost of the mounts, wiring, etc., will vary depending on the type and angle of the roof, and whether or not the system can be mounted on the roof or has to be mounted on the ground. The costs should be $2-5,000, or about 15% of the total cost.

An inverter is a complex piece of equipment and comes with a variety of features, which can increase the cost, but, for the purposes of our example, the cost will run $2-3,500, or 10% of the total.

Installation costs can vary quite dramatically, so we’d want to get several quotes from as many reliable contractors as we can. But, as a general rule, you should expect to pay around 15% of the total cost of the system, which, in this case, would be $3-4,500. At the same time, this is not an item we want to skimp on, because this is a major investment that will last at least the next 30 years, so we should spend carefully but wisely.

Going solar is a major, and, potentially, life-, economic- and planet-changing decision, and the more facts you can get, the more confidently you can move forward with your decision to go solar. Hopefully, you’ll now be more aware of the costs involved and what you can and should expect to pay for the system as a whole and the individual parts that go into the installation of such a system.

Grab your FREE report, and get much more information on going solar by clicking on the only solar power resource you’ll need. Ray Boreham suggests you’ll find a wealth of information and tips on solar and renewable energy at http://www.all-you-need-is-solar.com/