Solar Price Per Watt Explained
When shopping around for the best solar deal, you are going to hear a lot about Price Per Watt or $/W but, what is this? Solar system sizes are described in kilowatts (kW, where 1kW = 1000 watts).
To calculate $/W, you will take the total out-of-pocket cost of the system you are purchasing and divide it by the number of watts of capacity in the system. For example, 5kW solar system has 5000 watts. Let's say that system costs $15,000, then the costs per watt is ($15,000/5000W) totaling $3/W.
Now remember, if the price of the solar system incorporates the Investment Tax Credit (ITC) incentive, it will reduce your solar energy system's total cost by 26%. So, ($15,000 x 74% = $11,000) totaling to just $1.80/W.
Now, if you are planning to go under a solar leasing or power purchasing agreement program (PPA), the $/W is not important to you as the third party owns your solar system and will only be selling you the electricity that it produces.