Residential solar systems in Pennsylvania have a lifetime cost of about 5 cents per kilowatt-hour compared to about 12 cents per kilowatt-hour on average that residential customers pay for electricity from the grid.
Don't believe it?
Take a look at these numbers. Assume that the cost of a kilowatt of residential solar is $5.50 per watt installed or $5,500 per kilowatt. Assume that the federal tax credit of 30% is applied, reducing the customer cost to $3.85 per watt or $3,850 per watt. Assume that the kilowatt generates 1,100 kilowatt-hours per year or 27,500 over the life of the system.
After the federal tax credit is applied the cost per kilowatt-hour over the life of the system is about 14 cents or a bit more than today's 12 cents grid power. What will grid power cost 5 years or 10 years from now? The probability is high that the cost will be more than today's on average 12 cents. And so investing in solar could make sense if the analysis stops here.
But most importantly the solar cost to the consumer is not 14 cents, because that assumes the solar installation creates no new value for the home. Zero is a false assumption.
In fact installing solar increases the value of an existing home by about $5 per watt according to the new and important Lawrence Berkeley National Laboratory study of solar's impact on home values.
If one is cautious about the increased value of a home after solar is installed and assumes just 50% of the LBL study number or $2.50 per watt, then the per watt cost of solar in Pennsylvania declines from $3.85 per watt after the federal tax credit to $1.35 per watt.
With just the federal tax credit and 50% of the LBL home value increase, solar in Pennsylvania costs about 5 cents per kilowatt-hour or 60% less than the average residential grid rate.
Residential solar for an existing home is a very attractive investment.