Economics For The DIY Grid-Tie PV System

Curious dinosaur approaches mysterious new renewable energy project.



Back to the PV System page...


This page covers the costs and energy savings for the grid-tie PV system we put in, and compares PV to other potential renewable energy projects.



Cost of System

The table just below shows the cost of the system.  Basically we bought a "kit" offered by, and then added a few things that were needed but not included in the kit.  There were some costs associated with building the ground mounts, and renting a trench digger.  The only new tool I had to buy for the project was a smaller torque wrench -- it seems like a project of this size should allow one to justify the purchase of more new tool  -- bummer!
The table also shows the rebates we expect to get from the federal government and from Montana state.
We supplied all of the labor,
Item Cost Cost per watt
WholeSale 2150 watt Solar kit $8999  
       10 REC 215 watt PV panels    
       10 190 watt Enphase micro inverters    
       PV mount rails and hardware    
       Weeb Washers    
Addons to kit    
     Enphase EMU reporting unit $345  
     Disconnect Switch $65  
     Placards $0  
     Shipping $0  
Wire -- array to house $106  
Wire -- ground and other $25  
Conduit $30  
Array Junction Box $20  
Circuit breaker $9  
Wire nuts, lugs, wire ties 30  
Trencher rental $54  
Mount Lumber $96  
Mount Hardware (plates, bolts, U ftgs) $50  
Concrete $130  
Labor $0  
Total $9959 $4.63 per STC watt
Federal 30% $-2988  
Montana $500 $-500  
Grand Total after rebates $6471 $3.01 per STC watt  after rebates


The Wholesale Solar kit included most of what was needed.  The exceptions being the Enphase EMU reporting unit and the AC disconnect switch, which were added on to the order.  Shipping was free.


The kit approach (I think) turned out to be a good way to go. 


I think that we could have done somewhat better on total cost by looking very hard for bargains, doing a roof mount system, and (possibly) with a single inverter system.  But, we are all around pleased with the system and feel it was worthwhile to spend a few more bucks in some areas.


If you use the more or less standard rule of thumb of $8 per watt for professionally installed system, the system would have cost $17,200 before rebates, for a Do-It-Yourself  saving of $7,200.  I'm not sure that I quite believe this, as system prices have been coming down,  and the $8 per installed watt for grid-tie systems might be high.  If you are thinking about doing your own system, and the main incentive is to save money,  I would definitely look around for the best you can do with your own install, and also get some estimates from local installers just to make sure there is really a saving in your situation.


  2011 update on cost and savings for installing a PV system yourself...
Prices and have dropped some, and DIY savings are still large.


Projected Saving in Energy

According to PVWatts, the system should save us about 3000 KWH a year.  For us, at about 8 cents per KWH, this will save us about $250 a year. 


PV Watts run for our system -- using Billings, MT

Station Identification
City: Billings
State: Montana  
Latitude: 45.80 N
Longitude:     108.53 W
Elevation: 1088 m
PV System Specifications
DC Rating: 2.2 kW
DC to AC Derate Factor: 0.820
AC Rating: 1.8 kW
Array Type: Fixed Tilt  
Array Tilt: 45.0
Array Azimuth: 180.0
Energy Specifications
Cost of Electricity:     7.9 /kWh

Solar Radiation
AC Energy
Energy Value
3.23      187    14.77   
4.16      213    16.83   
5.21      287    22.67   
5.29      269    21.25   
5.79      297    23.46   
6.02      286    22.59   
6.60      318    25.12   
6.33      308    24.33   
5.88      285    22.52   
10  4.77      253    19.99   
11  3.61      197    15.56   
12  3.02      174    13.75   
Year  5.00      3073    242.77   


Note that the DC to AC Derate Factor was increased from the default of 0.77 to 0.82 based on this paper from Enphase.


This is a return of about 4% on the $6,500 we invested in the system.  When you consider that the "earnings" from this system are income tax free, and that the savings will go up as the cost of energy goes up, its really not a bad return. 


Carbon Emissions Reduction

For our part of the country, about 1.5 lbs of CO2 is emitted for each kilowatt-hour of electricity used.  So, the CO2 reduction per year is about (3073 KWH)(1.5 lbs/KWH) = 4,600 lbs of CO2. 


This is a relatively large CO2 reduction for the amount of energy saved because electric power generation is an inefficient process that makes use of a lot of high carbon fuel (coal).  So, saving or generating electricity is a high leverage way to reduce carbon emissions in the US.


For example:

1 KWH of electric energy from a coal fired power plant              2 lbs of CO2

1 KWH of electric energy from an NG power plant                      1.3 lbs of CO2

1 KWH of heat energy from NG in a 95% efficient furnace         0.5 lbs of CO2

1 KWH of heat energy from burning wood                                     0 lbs of CO2

About half of our electric power in the US comes from coal fired power plants.  These plants (because they are so high in carbon emissions) account for 80% of the CO2 emissions due to electricity generation in the US.  In spite of the rapid growth of wind and solar, the 50% has changed little over the past few years.  My personal opinion is that the only practical path to reducing these emissions from coal fired power plants significantly is for us (you and me) to use a lot less electricity.


We have been working on trying to get our carbon emissions down, and this 4,600 lbs of CO2 reduction is a worthwhile chunk -- one of the larger single contributions.  As you can see from the section below its not nearly as effective as conservation and efficiency, but its worthwhile.



This was a fun and challenging project, and even if it never saved a dime, it would be worth it.  PV is a fascinating technology, and it was a real pleasure to learn something about it and see the system take shape.


How Does PV Compare to Other Solar or Conservation Projects?

So, how does PV compare to other solar or conservation or efficiency project you could do?  Here are some examples.


Note that this is a DIY oriented site, and all of these projects assume "free" labor (your labor).



Project Our Solar
PV System
Best 8 "Half"
Full "Half"
$1K Solar
Water Heater
"Solar Shed"
Space Heating
Initial Cost $10,000 $378 $11,725 $1,000 $4,700
Energy Saving per year (KWH/yr) 3,000 KWH 10,350 KWH 59,100 KWH 3,700 KWH 8,900 KWH
CO2 reduction per year (lbs/yr) 4,500 lbs 10, 456 lbs 36,100 lbs 4,000 lbs 4,400 lbs


(1) Our new grid-tie PV system as described here...

(2) The best (most cost effective) projects from our "Half" program... these are simple conservation projects.

(3) All of the Half Program projects...  this is all 23 of the conservation and solar heating projects we did for Half.
Note: The totals for the Half program are high because they include just about everything we spend energy on, including transportation.

(4) The $1000 DIY Solar Water Heating project...

(5) Our solar space heating system...


These numbers are kind of hard to believe when you first look at them.  How can a handful of simple projects (the "Best 8") that cost less than $400 to do save 3 times as much energy as a state of the art, $10,000 PV system?  Well, it may be hard to believe, but I can tell its true.  Its also very likely that if you go find your "Best 8" projects and do them, your results will be similar. 

I'm not trying to be hard on PV -- I think its a great technology, and I love my new system, but be sure you do the other stuff too.  If you do the other stuff first, you can pay for your PV system with the dollar savings from the other projects.


I did not include rebates for any of the projects in the above comparison -- they vary a lot from place to place.  I also feel that we might be better off if rebates were based on something like the actual energy saving and/or emissions reduction accomplished.  The way it is now, the renewable technology industry (PV, wind, ...) with best lobbyist gets the biggest rebate programs -- I think this works to the detriment of other renewable technologies that may be superior from cost effective energy reduction point of view, but are not as glamorous and don't lobby so well.   Seems like we should be rewarding actual results?


Back to the PV System page...


Gary November 20, 2009