We last looked at the cost of generating your own solar power back in July 2011. Back then, solar power from your roof was competitive with the retail price of electricity.

A couple of things have happened since then. The cost of both solar panels and inverters has plummeted, and the retail cost of electricity has generally risen.

The original article provides full details on the method and assumptions used to work out the cost of solar power in cents per kilowatt-hour (c/kWh) and discusses some other important issues. Apply the same method to today’s prices for solar power systems and this is how the numbers work out. In keeping with the earlier article, all prices quoted are before the value of renewable energy certificates (RECs) is considered:

2 KW system

Initial cost: $6,287 installed, new inverter after 20 years: $1,400 (today’s dollars)

Real finance rate 20 years 40 years
0% 13.3 c/kWh 8.9 c/kWh
2.5% 17.0 c/kWh 11.4 c/kWh
5.0% 21.3 c/kWh 14.2 c/kWh

5 KW system

Initial cost: $12,471 installed, new inverter after 20 years: $2,170 (today’s dollars)

Real finance rate 20 years 40 years
0%  10.5 c/kWh 6.8 c/kWh
2.5%  13.5 c/kWh 8.7 c/kWh
5.0%  16.9 c/kWh  10.8 c/kWh

10 KW system

Initial cost: $22,974 installed, new inverter after 20 years: $2,600 (today’s dollars)

Real finance rate 20 years 40 years
0% 9.7 c/kWh 5.9 c/kWh
2.5% 12.5 c/kWh 7.6 c/kWh
5.0% 15.6 c/kWh 9.5 c/kWh

 

It’s worth a reminder that the prices used are for quality systems from a reputable supplier. There are cheaper systems to be had, and if they have the longevity they could produce even lower power costs. Also, most buyers of solar power systems sell the RECs that can be created by installing solar power. This reduces the upfront costs, taking a further 1-3 c/kWh off the figures shown above.

So dig out your power bill and see how much you are paying for electricity. If it’s more than the above figures, check out your roof. If it soaks up a lot of sun, maybe it’s time to go solar.