How Big and Expensive Is a 20 kW Solar System?

First things first, a 20 kW solar installation is BIG!

The average home solar installation in the United States is 5.6 kW, so a 20 kW system is almost 4 times bigger!

If you’re interested in installing a 20 kW solar system, chances are this is a commercial installation or your electricity use is really high compared to the national average of about 900 kilowatt-hours per month. Maybe you live in an area that regularly sees summer temperatures over 100 degrees F and so you have to crank that air conditioning all summer to stay comfortable (AC is one of the biggest users of electricity in our homes!). Or maybe you live in a large house (read: mansion), so you have a lot of lighting and space to air condition. If this is the case, great! You are a prime candidate to go solar. The higher your electricity bill, generally the more you can save by installing a solar system.

Efficiency First!

Before you move forward, here’s an important tip to help you save bookoo bucks with your solar installation: Before installing solar, be sure to decrease your electricity use as much as possible. This is a great tip for anyone installing solar – and it should really be considered a prerequisite to solar – but homeowners installing large solar installations have the most to gain!

Lightbulbs, showerheads, sink faucets, and even insulation can be switched over to high-efficiency options, which lowers your electricity use, saves you money, and allows you to install a smaller solar installation (which obviously costs less). Think about this: replacing a single 60 watt incandescent bulb with an equivalent LED can save you around $200 over the life of the LED bulb. And that’s just one single LED! Imagine how much savings that adds up to in a big house! So before you decide a 20 kW installation is right for you, be sure to switch out those bulbs and install any other efficiency measures that reduce your electricity usage! After that, you’re ready to go solar!

How big is a 20 kW solar system?

There are many ways to look at the size of a 20 kW solar installation:

What does 20 kW actually mean?

A 20 kW solar installation can produce 20 kilowatts of electricity in a single instant in perfect conditions. If your 20 kW installation produces electricity for one hour in perfect conditions, it would produce 20 kWh (and a 5 kW solar system would produce 5 kWh in an hour). Easy, right?

How many solar panels is that?

A typical residential solar panels produces about 260 watts, so a 20 kW installation is made up of around 78 solar panels. If your solar panels are less efficient – say around 250 watts – that total goes up to 80 panels. If you use more expensive, high-efficiency solar panels like SolarWorld’s 300 watt Sun Modules, your total drops to just 67 panels!

How much space does that take on my roof?

The dimensions of most residential solar panels hover around 38” x 65” (roughly 3’x5’). With 78 panels, the total area of your solar installation is 1,372 sq feet – about half a tennis court (when playing doubles… just to clarify for all you tennis experts out there). If you don’t have that amount of open space in a single area of your roof – don’t worry! Solar panels can be installed anywhere there’s a free area, though most installers require space for at least 3 panels in each area. Microinverters – which optimize solar panels individually – are needed for this type of installation, but it’s a common strategy many homeowners with complex roofs or large installations employ.

How much does a 20 kW solar system cost?

The average cost to install a residential solar installation, according to the National Renewable Energy Lab, is $2.93 per watt. So, a 20 kilowatt installation that you pay for in cash upfront would total around $58,600!

That’s a staggering number, to be sure! However, solar homeowners are eligible to receive numerous federal, state, and local financial incentives to drive this cost down. For example, when we apply the 30% federal Residential Renewable Energy Tax Credit, that total costs drops down to $41,020, almost $20k less! Now we’re getting somewhere!

Check on your online for what additional incentives are available in your area. A great tool for this research is the federally-sponsored DSIRE (Database of State Incentives for Renewable and Efficiency), which summarizes all the different incentives available for going solar in each state, which can include anything from upfront rebates for a portion of the total cost to state sales tax exemptions and property tax exclusions. All these incentives drive your cost down even further, allowing you to save even more going solar!

$40,000 still a little too much? Solar companies know that’s a lot of money for most homeowners. That’s why many solar installers offer leases, power purchase agreements, and loans to allow you to go solar with little investment – though your savings are also going to be less than a cash purchase.

How much money can I save with a 20 kW solar system?

How much a solar installation costs is important, but the real question is how much you can save. A solar installation is big money, but if you can save even bigger money over the life of the installation, then it’s all worth it, right? Well, installing a 20 kW system means big savings! Read on to see how.

To calculate the financial savings of a 20 kW solar system, we need to compare your total solar installation cost to your total cost of continuing to purchase electricity from the utility. Most in the solar industry usually assume a solar installation to last between 20 and 30 years, so we’ll split the difference and use 25 years in our calculations.

1. As we saw, your total installation cost for a 20 kW solar system is $41,020 after the 30% federal tax credit. Your installation cost might even be lower if your state or utility offers additional incentives, but we won’t include those here.
2. For this example, let’s say you live in North Carolina, where the average utility rate is $0.1178 per kWh. (Click the link to find your state’s average utility rate!)
3. $41,020 and $0.1178 per kWh. How do we compare these two very different prices? We have to compare the same amount of electricity! To do this, we need to know how many kilowatt-hours of electricity a 20 kW system produces in North Carolina. Let’s go to the National Renewable Energy Lab’s no-cost online Solar Calculator, PV Watts, to find out.
4. We plugged our numbers in PV Watts and found that a 20 kW installation in Charlotte, North Carolina, will produce 28,211 kWh per year. If we bought that amount of electricity from the utility, it would cost $3,323!
5. So now we know a 20 kW solar system produces 28,211 kWh annually (and that 28,211 kWh would cost $3,323 from the utility) but what about the total cost over the next 25 years? We need to calculate this amount!
6. First, solar panel production drops about 0.08% each year due to age, soiling, etc, so after 25 years your solar installation will have produced about 641,544 kWh!
7. Utility rates typically increase about 2.5% each year on average, so we also need to add this to the mix. After 25 years, you would will have spent $116,078 buying 641,544 kWh.
8. Subtracting your original solar investment from $116,078, we find that by installing a 20 kW solar installation, you can save $75,058 over 25 years! If electricity is more expensive in your area, or if your city or state offers solar rebates, your savings could be even higher!

So if you’re thinking about installing a large solar installation, chances are high that you will save a lot of money over the next 20 to 30 years. For a rough estimate of your own savings, follow the steps above!