When looking at the system price from a couple of different installers, it can be hard to figure out if System A, System B and System C are really apples-to-apples. Different panels, different inverters and even different panel placement can mean a HUGE difference in payback time and value for your buck. Here are three measurements you can use to compare systems and nail down where the value for the money is.
COST PER WATT:
In Las Vegas, the average COST PER WATT for solar is between $2.70 – $3.15 a watt. If you see a price outside this range, you should be asking lots of questions. Companies selling far below average might not have the financial strength to be here to take care of you. Companies selling above the average may be hiding financing fees or subcontracting costs in the price.
Figuring out cost per watt is easy. It’s like comparing the unit price when you shop.
Cost of system/how many watts are in the system = Cost Per Watt
Here’s an example: $35,989/ 12.21 kw or 12,200 watts = $2.94 per watt
TIP: Make sure you compare the same cost per watt. Don’t figure company A’s cost before the rebate+tax credit is applied and then compare it to Company B’s cost AFTER the rebate and tax credit.
KWH PER YEAR:
How much power are you getting out of that equipment? Compare the annual output of the systems you are looking at and ask the solar company how they got to those numbers. Some companies have been known to overstate their production. If you want to check them yourself, head on over to PVwatts. Now that you know how much power it’s going to produce, how much of the power you use now is being replaced with clean solar? This is what the offset % listed on some proposals means. Obviously, since solar costs less than getting power from traditional sources and it NEVER goes up in price, more solar is better. A system that delivers 75% of your needs is not as good of a value as a system that delivers 101% of your needs.
Looking at these data points side by side gives you the info to answer the big question with solar: How long until you see a return on your investment?
In Las Vegas, payback time starts at as little as 8 years for a system purchased outright. Since power rates from NV Energy can go up or down, we’ll use today’s per kwh price to estimate payback time.
Cost of system/annual cost of power produced by the system = Payback time in years
Here’s an example:
This system makes 16,849 kwh annually. Right now, NV Energy charges roughly 12 cents a kwh, so the value of that power is $2,021. The system you are evaluating costs $17,675 after the rebate and tax credit is applied.
$17,675/$2,021 = 8.74 year payback
This system makes 12,496 kwh annually. At 12 cents a kwh, the value of that power is $1,499.52. The system you are evaluating costs $21,203 after the rebate and tax credit is applied.
$21,203/$1,499.52 = 14 year payback
Clearly, System A is the better value in this example.