# How to Evaluate Solar Systems

To make an informed decision about which photovoltaic (PV) system provides the best value for your home, it’s important to understand the concepts of cost per watt ($/w) and cost per kilowatt hour ($/kwh).

Cost per watt is a measure of the cost of the PV system compared to the amount of power (watts) its solar modules can generate on a perfectly sunny day. A 5kW (5,000 watt) photovoltaic system that costs $25,000 has a cost per watt of $5 ($25,000 divided by 5,000).

Cost per kilowatt hour is a measure of the cost of a photovoltaic system compared to the amount of energy (kWh) it will produce over the course of a year. A kilowatt hour, or kWh, is the measurement HECO uses to calculate electric bills. For example, a PV system that generates 8,000 kWh annually and costs $24,000 has a cost per watt of $3 ($24,000 divided by 8,000).

In general, cost per watt and cost per kilowatt hour are good ways to compare proposals from solar companies. Cost per watt is a representation of the cost of the photovoltaic system compared to the system size. Cost per kilowatt hour is a representation of the cost of the photovoltaic system compared to the annual savings in energy cost.

**Efficiency versus cost per kilowatt hour**

Some solar panels produce more power than other solar panels, even though they are nearly the same size. Solar panels that produce more power are described as being more efficient or having a higher energy density.

This simply means that the solar panels produce more power per square foot or area.

It is important to note that higher solar panel output (or efficiency) does not mean the solar panel is higher quality. Beware of companies that try to sell higher output PV panels as better quality. There is no correlation between the quality of a solar panel and its power output. Higher power output merely means the solar panel generates more watts (electricity) per square foot. More efficient solar panels generate more electricity in a smaller amount of space but this increased efficiency comes at a much higher price.

For example, Island Pacific Energy offers a custom 5kW photovoltaic system with solar panels rated at 250 watts for about $23,000. Other solar companies sell 5kW solar systems using high efficiency solar panels rated for 324 watts for $30,000.

Both systems produce the same amount of power (5,000 watts) and both system produce the same amount of energy (7,930 kWh). However, the cost per watt for the Island Pacific Energy system is only $4.59/w as compared to $6/w for the other companies’ system. Additionally, the cost per kilowatt hour of the Island Pacific Energy system is only $2.89/kWh as compared to $3.78/kWh for the other company’s system.

As you can see, even though the other solar companies’ solar panel is more efficient, the Island Pacific Energy system is a better value since the cost per watt and cost per kilowatt hour is far lower.

For a complete understanding of the value of PV systems, call Island Pacific Energy at 377-4570 or email info@islandpacificenergy.com.

**ISLAND PACIFIC ENERGY **

contact // 377-4570

email // info@islandpacificenergy.com