How to Cut the Cost of a Solar Installation in Half

The following is a guest post from Craigslist Money Maker. 

I just recently finished up the most ambitious and daring home-improvement project of my life – a solar installation that will zero out my electric bill.  

I’m not an electrician. Far from it, in fact. To give you an idea of my electrical prowess, I once spent two entire weekends trying to rewire a three-way light switch. While I own a multi-meter, I have no idea how to use it. In fact, I just recently learned what it was called. 

So why did an electrical half-wit such as myself decide to take on a project of this magnitude? Simple. It saved me a boatload of Benjamins. By skipping the professional installer and doing the job myself, I saved about half of what I otherwise would have spent on a solar installation.   

Was it hard? Yes. Was there a heavy learning curve? Double yes. But with a little help from my friends and a lot of help from YouTube, I was able to figure it out.    

Average household electrical costs:

A solar system is the sum of all parts needed to produce energy from the sun, and each solar system is different because each home is different. Some homes have a perfectly pitched south-facing roof, ideal for solar power, and others do not. Some homes are sturdy and well insulated, while others have inferior craftsmanship.

Additionally, energy needs vary from home to home.

Some people (me in my college days) keep their windows open and heat their living space by propping the door to their electric oven. Others (me in the present day) only use the AC when company comes over or when crayons start to melt.

Because each home and the energy consumption of those living in each home is unique, the size and costs of a solar system for each home are likewise going to be unique.  

A typical family

The average home in the U.S. consumes 911 kilowatt hours per month at a cost of $114 or $1368 per year.   

So what is a kilowatt hour (kWh)? A kilowatt hour is simply the ability to run one kilowatt (1000 watts) of power for 1 hour. Say, for instance, you have ten 100 watt light bulbs. If you leave these lights on for 1 hour, you’ll burn through 1kWh of electricity.

If the average household is consuming 911 kWh of energy each day, this means they will likely need a 7.5kW (7,500W) solar system to zero out their electric consumption.

How to calculate the size of a solar system

So how did I figure that the average home needs a 7.5kW system to zero out their electric bill? Well, I made some estimations.

Let’s go back to the average home’s energy consumption. If the typical household uses 911kWh/mo, this means that they are using 10,932kWh/yr (911kWh per month * 12 months = 10,932kWh/year).  This equals roughly 30kWh/day (10,932kWh per year / 365 days in a year = 29.95kWh/day).  

Assuming the average home in the U.S. gets the rough equivalent 4 hours of direct sunlight each day (keep in mind that sunlight is much less direct in winter than in summer), then it would take one day for one, 250 watt solar panel to produce 1kWh of power each day (250kW * 4 hours sunlight = 1000Wh or 1kWh).  

If the typical US family uses 30kWh of electricity per day, this means they need at least thirty 250W solar panels to zero out their electric bill. Thirty 250W panels puts the typical family’s solar system size at 7,500W or 7.5kW (30 panels * 250W per panel = 7,500W or 7.5kW).  

Average cost of professional installation

Okay, the heavy math is done. So let’s do some lighter math to try to find out how much a professional solar installation would cost the average family.

The average cost of a professional solar installation for the average family is about $3/watt. This means a solar installation for the average U.S. home will cost right around $22,500 (7,500 watts * $3/watt = $22,500).  

Roughly half of that cost can be contributed to labor and overhead. This means the average homeowner can save over $11,000 by doing the solar installation himself.

My solar project

A little bit about my home

My home was erected in 1979. It has 4 bedrooms and is just under 1900 sq. ft. My home is not nearly as energy efficient as a new home, but my wife and I are good about keeping our electric bill in check. For instance, we didn’t use the AC at all last summer. (Yes, we are cheap.) Our average electrical consumption is right around 650-kilowatt hours (kWh) per month, which averages out to about 21.4kWh of electricity each day.  

Quotes

When we decided to go solar, we sought out a few bids from different solar installers to see how the costs compared. The first bid was from a big national installer (hereafter, BNI). The second was from a local installer (hereafter, LI).

BNI

BNI took a look at our power consumption and said that a 4.8 kilowatt (kW) system would cover 97% of our energy needs. They offered this system for $21,000 or $4.67 per watt.  

That’s no small chunk of change, but BNI had a few things going for it. It offered 25 year financing on the system and allowed free use of the system for the first year. These were pretty attractive options for us because it allowed us to get a solar system in place with no immediate out of pocket expenses and would also give us time to recoup our 30% tax credit.  

LI

The second installer, LI, looked at our power consumption and proposed a 5.1KW system that would offset our energy consumption by 99%. They quoted us a price of $14,800, or $2.79 per watt. A bargain compared to BNI’s $4.67 per watt. And with .3kW more power to boot.

In the end, the cost difference was too much to overlook and we decided to go with LI.  

Battery ready system

Right around this time, my wife and I decided to put in a more battery ready system instead of a simpler grid tied system. A battery ready system would be more expensive but would allow us to utilize battery backup power in the future.  

LI’s quote for a battery ready system was just shy of $18,000, or $3.40 per watt.

Self-Install costs

At this point, I started to get curious as to what the cost would be if I did the install myself. LI’s bid documents outlined all the solar components LI planned on using for the job. I did some research and discovered that if I ordered all the parts online, pulled the permits, and did the work myself, I could put in a similar system for around $8,500.  

Actual cost‍‍ and Time Invested

I ended up going with the larger system (6.615kW) because I found a killer deal on a pallet of 245W solar panels (eBay) and I knew I could fit 3 rows of 9 panels nicely above my garage (3 rows * 9 panels/row * 245W = 6615W or 6.615kW).  

I’ve just finished my system and the actual cost came in a bit over budget (surprise, surprise), but still at about half the price of what I would have had to pay to have someone install it for me.

As I mentioned, I installed a 6.615kW solar system for my home. This system will more than zero out my family’s energy bill. This system should have cost me around $19,845 (6615 watts * $3 per watt = $19,845). But the final cost came in at $10,300, or roughly $1.56 per watt ($10,300 / 6615 watts = $1.56 per watt). The system would have been $1,500 less, but the battery ready system was a bit more expensive than a simpler grid-tied system.

This list is the detailed outline of my expenses. It also lists the online stores where I bought the materials.  

I didn’t track my time closely on this project, but I would guess that I have put about 40 hours into it. I also got quite a bit of help from friends and family.

Conclusion

This project, although not easy, was actually less painful than I thought it was going to be. I had a few setbacks, but they were relatively small. And even though the project was not exactly easy, the payoff–a $10,000 deduction in my solar installation bill–is more than worth the trouble. And if this guy can do it, anyone can.  

If you’re interested in more details on my solar project, including some of the mistakes I made and some more detailed how-to information, including photos, you can visit my blog, Craigslist Money Maker.  Below are the specific links to the solar articles.  

DIY Solar 1: All Aboard the Solar Express

DIY Solar 2: Packages Arriving

DIY Solar 3: Racking and Soladeck Installation

DIY Solar 4: Solar Panels

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Greg HovdeNice joy Recent comment authors

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Greg Hovde

One huge caveat you failed to mention is that most panel manufacturer’s void their warranty if the system is not installed by real electrical contractor. Big issue especially with inverters

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Nice joy

“911 kWh of energy each day” Did you mean to say each month.