Before deciding to install a solar power system, people will normally ask a lot of questions. For sure, the most frequent one is this – how much does a solar power system cost?
For this example, we will consider a very common system size for residential or commercial installation. And, that is an on-grid 10kW solar system. In this article, we will answer this very interesting question in detail. We will demystify it as much as the solar salespeople don’t want you to know.
Contents
As of the year 2020, a quality 10,000 Watts solar system can cost between US$10,000 to US$14,000.
This is the price range of a system of this size. You will be able to confirm it when you know the real costs of each component from the suppliers. Know more about the cost breakdown, details and information below.
A 10kW solar power system has at least 25 to 40 solar panels. It can take up a space between 55 to 70 square meters. However, the number of solar panels and space required depends on the module efficiency.
The system can generate up to 16,400 kWh of electrical energy every year or up to 45kWh daily. But, this depends on the tilt angle, orientation and geographical position of the solar power system.
To have an idea about the cost, we need to breakdown the whole system into its basic components. By doing so, we will determine the bill of quantity or BOQ of the 10kW solar power system.
A solar power system consists of four basic components. These are the solar panels, the inverters, the mounting structures and the balance of system (BOS).
The quantity of each component will base on the total capacity of the system. This means as the kW increases, the quantity of materials for each component will also increase.
Considering a 10kW or 10,000-watt system, we can break it down into its basic parts as follows:
Solar panels’ cost usually falls between 45% to 60% of the total system spending.
Now, for a 10,000-watt solar power system, you will need at least 25 solar modules. However, consider only the power capacity of solar panels available in the market. You can choose from 250-watt up to 410-watt module capacity.
Choose modules with high power capacity as much as possible. It reduces the number of solar panels that your system will require. By doing so, you will be able to optimize your budget in the long run. Although the price of solar panels will be based on USD/watt, reducing the number of modules will be beneficial for you. It’s because, it reduces the length of your cables, number of racks or supports and even the cost of maintenance.
For this system, the most effective option is to use a 400-watt solar module. So, what you need to do next is to divide the total solar power of the system by the solar panel capacity. Then, you will determine the total number of modules to buy.
10,000-watt / 400-watt = 25 units
For a 10kW solar power system, you will need 25 units of 400-watt solar panels. You may want to check out our article about solar panels for homes, to learn more about this.
For a 10kW solar power system, you will need at least one solar inverter unit. As for the cost percentage, this component will amount between 15% up to 25% of the total system cost.
One of the major components of a solar power system is the inverter. It comes in different shapes and sizes. Sometimes, it is installed outdoors or in the field together with the solar arrays. But, most of the time, it can be found under the shade or even indoors.
The inverter is the heart of the solar power system. Its main purpose is to transform DC power from solar arrays into useful AC electricity. This will then be used for homes or other establishments.
There are many types of inverters that are available right now. But, we will just focus on the inverters which will apply to a 10,000-watt solar power system. We can consider these two types:
A micro inverter is the type of inverter which is directly connected to a single solar panel. It is installed just underneath the solar module. It also means, the number of modules will determine exactly how many micro inverters you need.
Its output is AC power. In most cases, it has almost the same capacity of the panel it is connected to. Since the output is relatively small, you will need to have a combiner or collector. This will combine all the smaller AC outputs from the micro inverters into an electrical panel. It will have an output power relatively closer to the total capacity of the system.
Here is the list of advantages of micro inverters.
Here is the list of disadvantages of micro inverters.
A string inverter is a device that requires several solar panels connected in series as an input. When you connect about 5 to 18 solar panels in series, it is already called a solar string. Thus, the name of the inverter comes from that concept.
Most string inverters convert DC power from the solar strings into AC using MPPT or maximum power point tracking.
MPPT is an algorithm that string inverters use to sample the output power from the solar panel strings. It then applies the proper resistance (load) to get maximum power. This allows the string inverter to maximize the extraction of power from the solar modules. Thus, making them convert sunlight into useful electricity efficiently.
Here is the list of advantages of string inverters.
Here is the list of disadvantages of string inverters.
Considering a 10kw solar system, it will be best to use a string inverter. Why? It’s because the cost-effectiveness of a string inverter outweighs the advantages that micro inverters have. Besides, not everyone needs to monitor each solar panel.
Additionally, one string inverter will be enough for a 10,000-watt system. Thus, it will help in optimizing the budget.
Sizing of the inverter is not as difficult as it sounds. Once you have the total size of the system (in kilowatt peak), choosing inverter size will be straight forward.
However, one thing you need to know is that string inverters can be oversized. It is a practice recommended by solar designers and consultants. Why? It’s because it significantly lowers the cost of the system. Additionally, it maximizes the inverter efficiency considering the peak capacity of solar panels won’t be reached all the time.
Inverter oversizing means you can choose an inverter that has a lower output power capacity than the solar panels. However, you should always refer to the inverter’s datasheet to know the limitations.
In general, the recommended oversizing ratio is up to 130% (DC to AC ratio). To simplify, DC to AC ratio refers to the total solar power (DC) over the inverter output power (AC).
Mounting structures are the supporting structures that hold the solar panels to the roof or ground. This can be made out of GI steel or aluminum materials. Usually, it has a combination of the railings, end clamps, mid-clamps, mounting brackets, and other supporting structures. It’s application ranges from ground mount, flat roofs, sloped roofs, tiled roofs, and others.
In general, the component amounts between 8% to 15% of the total solar power system cost. The cost will vary depending on the application of the solar mounting structure.
For a 10kW solar power system, we will consider a common sloped roof installation. This system will require 5 sets of 1×5 mounting structure for this type of application.
Balance-of-system for a solar power plant includes cables, wiring accessories, metering equipment, breakers, and switches. It usually sums up to 10-20% of the system’s total cost.
For a 10kW solar power system, it is recommended to use an AC cable with at least 10sq.mm. size. This is the case when we decide to use a string inverter. The cable should be a 4-core copper armored cable that will connect the inverter to the 3-phase main distribution board.
For this system, you have to consider a DC cable with at least 4sq.mm. size. This should be a single core copper solar cable that will connect the solar strings to the inverter.
Proper sizing of the breakers to be installed on the AC Main distribution board is very important. Always check the maximum output current of the inverter. From there, you can determine the size of the breaker you will need.
Usually, for a 10kW solar power system, you need to use between 20A to 30A 3-phase breaker.
The metering panel is the enclosure where you or your electric utility will install the solar meter. Its main purpose is to measure how much your system has generated in kWh or kilowatt-hour.
BOQ or bill of quantities is a document used to itemize the materials you will use in constructing a project. Here, we will show you what a 10kW solar power system BOQ will look like.
| Item | Description | Quantity |
| Solar Panels | 400Wp Mono Crystalline | 25 pcs. |
| Solar String Inverter | 8kW capacity | 1 no. |
| Solar Structure | 1×5 Sloped Roof Mounting Structure | 5 sets |
| Connectors | Male and Female MC4 Connectors | 4 pairs |
| DC Cables + Earthing Cable | 4 sq.mm. copper solar cable | 150 meters |
| AC Cables | 4-Core 10sq.mm. Copper Armoured Cable | 20 meters |
| Earthing Cables | 1-Core 10sq.mm. Copper PVC Cable | 20 meters |
| Cable Management System | Cable trays, conduits, and accessories | 1 lot |
| AC Breakers | 20A 4-pole AC Breaker | 2 nos. |
| DC Disconnects | 2-pole 800V 20A DC Breaker | 2 nos. |
| Metering Panel | Bi-directional meter enclosure | 1 no. |
| Fixings and Accessories | Screws, nuts, bolts, etc. | 1 lot |
Now, here is the cost breakdown of the system. This will base on the actual average cost from direct suppliers. However, brands will not be mentioned here. If you want to see the quotation for this system, click the button below to subscribe to our email list.
| Item | Quantity | Price per Unit (USD) | Price (USD) |
| Solar Panels | 25 pcs. | USD 192 | USD 4,800 |
| Solar String Inverter | 1 no. | USD 1,520 | USD 1,520 |
| Solar Structure | 5 sets | USD 250 | USD 1,250 |
| Connectors | 4 pairs | USD 3 | USD 12 |
| DC Cables + Earthing Cable | 150 meters | USD 5 | USD 750 |
| AC Cables | 20 meters | USD 10 | USD 200 |
| Earthing Cables | 20 meters | USD 5 | USD 100 |
| Cable Management System | 1 lot | USD 200 | USD 200 |
| AC Breakers | 2 nos. | USD 110 | USD 220 |
| DC Disconnects | 2 nos. | USD 160 | USD 320 |
| Metering Panel | 1 no. | USD 550 | USD 550 |
| Fixings and Accessories | 1 lot | USD 50 | USD 50 |
| Materials Total Cost | USD 9,972 |
From the table above, you will see the materials cost will be around $10,000 only. If you are going to hire a contractor to build your system, additional charges for labor, permit fees, and others are expected. On top of that, they might also add their margin for the materials. The final cost might go up to $20,000 or even more.
However, always look for professional solar contractors to do the job. This way, you will avoid headaches and delays on the project.
The graph above shows an actual yield of a 10kW-peak solar PV system in the whole year of 2019. This system is installed in a residential rooftop located in the United Arab Emirates.
In a year, a 10kW system will produce 12,000 kWh up to 16,400 kWh. However, it all depends on the solar plant location, site condition, inclination angle, shading, and maintenance of the system.
Usually, a 10kW solar system last between 20 to 30 years. Depending on the level of maintenance being carried out, solar panels, inverters and the other components of the system will outlast their warranty years.
The payback period of a 10kW solar system is between 5 to 8 years. Again, it depends on the initial cost of the system and kWh rate from electric utility. Additionally, net metering, feed-in tariff arrangement of local utility and system maintenance also need to be taken into consideration.
After the payback period, everything you get from the system is free energy!
In this article, we have presented to you an example of a 10kW-peak solar PV system with the actual data of its kilowatt-hour yield in a year.
From here, you will be able to calculate how much you will save on your electricity bills depending on the kWh tariff imposed by your utility. The breakdown of the system cost is also discussed here as a guide for you along with the materials you will need to build the system.
Now, you have the idea on how a solar PV system will cost you, particularly for a 10kW capacity. The decision is yours whether to invest on solar energy now or later, depending on your budget.
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