Is 5kW the Right Size System for You?
Sizing Tool to Decide How Many Solar Panels You Need in CA
One of the key questions to be answered when getting a solar-PV (photovoltaic) system is what size to get, or as many people think of it, "how many solar panels do I need?"
The average system size for SCE customers was 5.694 kW between Jan. 1, 2015 and Feb. 28, 2017. The right size system for the example homeowners ($200/mo. average SCE bill) is 5.711 kW - almost identical. Perhaps this average size is why so many people assume that a 5kW solar system is the standard size.
The size of the PV system is not at all what is meant by "solar panel size." That refers properly to the physical dimensions of a single solar panel or of an entire array. Less accurately, but commonly, it refers to the power output of the panel or array.
The choice of system size has a big effect on all subsequent decisions about equipment brands, models, and price. It's too important to leave it up to the installer, who isn't really the best qualified to make this decision anyway. The informed shopper is, but the key is the word "informed."
Overview of This Article About System Sizing
In this article, you can discover what you need to know about system sizing and use a simple tool (based on some complicated behind-the-scenes calculations) to decide "how many solar panels do I need."
But first, 4 topics that are the prerequisites for system sizing:
Note that this article fully takes into account the latest Net Metering rules (2.0, or NEM-2), TOU rate schedules, etc.
First Solar-Shopping Steps
To see your potential savings, try the Solar Panel Cost & Savings Calculator. No personal information required. Immediate on-page results. The only solar calculator on the web that is accurate for SCE customers.
If the Calculator shows enough potential savings for you, you can get the best possible shopping guidance by downloading the free Solar Buying Guides.
If you have questions or would like personal help, I offer a free service by phone or email to all SCE customers interested in solar. I can help you figure out the optimal size system you need and steer you to the best brands and models of equipment for it.
Reasurrances: I'm not selling anything; no pressure. I don't reveal any contact information unless you specifically ask me to, and even then only to a single dealer.
For details about this service and notes about me in video or text, please visit
Power versus Energy
First, power has to be distinguished from energy. Power is instantaneous output, measured in Watts or kilo-Watts (kW) in various ways.
But no matter how it is measured, the power rating of a solar panel or PV system is of virtually no use whatsoever to consumers. This is a crucially important point for solar shoppers to remember. Regardless of what manufacturers or dealers tell you about panel or system power, much less the price-per-watt of power, it's virtually meaningless to you.
The power panels produce varies dramatically with brand, model, light levels, shade, temperature, wind, weather, age, and less dramatically with direction it faces (azimuth), tilt, and soiling. It fluctuates minute by minute, day by day, season by season, and year by year.
On the other hand, Energy is power over a period of time, and is usually measured in kilo-Watt-hours (kWh); a steady or average 1 kW of power over 1 hour is 1 kWh, whether produced or consumed.
Your PV system's power output will fluctuate constantly. It will rarely stay the same for even an hour, and never for a whole day. Your system's monitor will keep track of this varying power output, averaging the power over 5-minute intervals (usually), and then averaging it again over hourly intervals.
The average power over each hour will be shown as so many kWh of energy produced during that hour. Adding these up for a day will be the day's energy produced, but still in kWh. Similarly for a week, a month, and a year.
The critical number for solar shoppers is the yearly total of kWh produced, because that is what is used to compare to your electricity consumption to size your system correctly.
In exactly the same fashion, SCE charges you by the kWh and credits you for excess kWh your PV system sends back to their grid. You'll see how this is calculated and reported on the SCE website at SCE Website Help.
For this reason, the relevant measure of your electricity consumption is also in kWh: so many in each hour of the day, so many per day, week, month, and year.
So all the relevant measures of electricity, whether produced, consumed, drawn from SCE's grid or send back to SCE's grid are always in kWh. Never in kW of power. That measurement is meaningless. It might spike to a very high level for a second, then drop to a very low level. What counts is the average of power over time intervals, and the standard interval is the hour. Hence kWh.
Your Electricity Usage: Past and Future
Correct system sizing begins with finding out how much electricity you've used in the most recent 12-month period: you want a full year if possible. If you don't know (and most people don't) please see Your Average Bill & Yearly Usage.
Before assuming your historical-usage figure is the best forecast of your future use, it is worth checking your home's present energy efficiency first, to see whether you are able and willing to improve it.
The biggest electricity consumer is air conditioning. Other large ones include (roughly in descending order) heating, water heating, pool heating, pool filtration, clothes dryers, oven, and cooktop or range. Smaller ones include lighting (LEDs save the most), refrigerators, freezers, washing machines, televisions, computers, and dishwashers.
All of these get less efficient as they age, and new ones continue to improve efficiency over older models. Many rebates are available from SCE to help pay for replacements. More efficient appliances mean you can get by with a smaller PV system. The savings on the PV system will probably more than offset the cost of replacing the appliances.
Surprisingly, solar makes it economical to replace even natural-gas furnaces and water heaters with electric ones, despite natural gas prices being at historic lows. An average sized electric furnace in Southern California will use about 800 kWh per year, increasing the size of the PV system needed by about that amount and costing about $1200 more net. But just for the next ten years, operating that gas furnace will cost $1760, while the larger PV system will cost only $300 more in payments, saving $1460. Even replacing a new, existing gas furnace with an electric one (about $700) is economical. Replacing an older furnace saves even more.
Solar makes replacing a gas water-heater with a tankless electric one (about $700) similarly economical. An electric water heater will use about 1700 kWh per year, so the PV system will have to be that much larger, costing about $2,500 more net. But operating costs for water heating will drop from about $2,150 over ten years to only $700 in payments for the larger PV system, saving $1450. Since water heaters with tanks usually last only about ten years, you may need a new one in a few years anyway.
It's also worthwhile to forecast how else your electricity usage might change over the next 10 years at least. Maybe you are planning to expand your home, or get a bigger air conditioner.
A possibility to keep in mind is that the cost of all installations on the same building permit may qualify for the 30% ITC. That means that the installation costs for any of these upgrades or appliances may qualify, if ordered at the same time as the solar and put on the same building permit.
Might you buy an electric car or two? It will take about 300 kWh to recharge each car for every 1,000 miles of driving. But because you'll be on SCE's Time of Use (TOU) schedule, you'll schedule your cars to charge automatically overnight during SCE's super-off-peak rate period (10:00 pm to 8:00 am). Because those rates are so much lower than SCE's on-peak or off-peak rates, you only need to add about 114 kWh per 1,000 miles of driving to your forecasted usage. So for 12,000 miles per year, you would increase your forecasted usage by 1,370 kWh/yr.
Taken together, these options actually enable us to eliminate the use of fossil fuels in our homes and cars and save money by doing so.
Even if you won't need more electricity for a few years, it's better to allow for a bit of headroom. This is because it's much cheaper to get a somewhat larger system now than to add on to it in pieces later. These look-aheads should give you a figure for your forecasted annual electricity consumption.
Why You Should Decide on the Right Size for Your System
The size of system you want depends on what percentage of your usage your PV system needs to produce per year. Perhaps surprisingly, it's best for the solar shopper, not the vendor or installer, to decide on this percentage. Here's why.
First, what's your goal? Replacing 50%, 75%, or 100% of your electricity from the utility's grid? Reducing your utility bill to $50, $25, or $0 per month? These are not the same things at all. Who should decide? Second, for how long do you want the system to accomplish this goal? This makes a big difference to the size of system to get. Who should decide that? Third, how much risk do you want to take on this percentage? Going a bit over doesn't cost much, but falling short can cost a lot over the system's life. Only you know. For these reasons, you should not leave system sizing up to vendors or installers.
What Is the Right Goal for System Sizing
First comes one fundamental fact, again, contrary to some conventional wisdom: you will save the most money if your system's energy production reduces your electric bill to nearly zero (at least reduces the Energy Charges to zero - this leaves only about $12.00 per month in irreducible non-energy charges for the average solar owner). The longer it does this, and the closer your bill stays to zero, the more you save by a large margin. Just leaving 25% of the utility bill uncovered by the PV system would cost the example homeowner $12,000 in 20 years.
A key fact in system sizing is what could be called solar leverage. This is the advantage of sending electricity back to the grid at high-rate times of day and buying electricity from the grid at low-rate times. It is fully explained in the articles Net Metering and Current & Future SCE Rates.
There's no need to read these articles right now, for purposes of deciding how to size your system. It's enough for you to understand that all these factors and more are fully taken into account in the mathematical model and tool for sizing below, and that you don't need a system that produces 100% of the electricity you use to wipe out your SCE bill, even though such a system is often erroneously called a "100% system."
The way to zero out your bill is not to pay any attention to the power rating of the system, or shoot for a "standard" 5kW solar system. The way is to get a system that produces the right percentage of your forecasted usage. This percentage is not an easy thing to calculate, so I developed a mathematical model to help you figure it out.
How Many Solar Panels Do You Need?
The number of panels is only one factor in sizing a system. How efficient those panels are, how quickly they degrade in power over their lifetime, how long they will last, the efficiency of the inverter, and other factors all figure into this decision.
Therefore, the thing to focus on is not on how many solar panels but an accurate projection of how much energy the system will produce in an average year (kWh/yr).
How to Decide on the Minimum Size for Your System
Solar Consumer Advisor has built a computer model just for SCE residential customers that calculates the minimum size for your system needs to produce for a zero bill. It takes every significant factor into account: SCE's latest TOU schedules and rates, Net Metering, array tilt and direction, and average weather, insolation, and irradiance for this area. It assumes a best-quality system (more about this later). No other tool available to consumers that I'm aware of does this.
The model calculates different minimum percentages of annual usage for six different usage levels. These percentages the smallest system that will completely wipe out the SCE bill.
To find the minimum percentage of your usage your system needs to provide to zero out your SCE bill, you find your average monthly electric bill (or even better, your expected annual usage) and read the Min. % for that row. Interpolate if your bill or usage falls between two rows. Extrapolate if it falls outside these bounds.
The formula used is Min. % = PV System Production Needed / Annual Usage).
For example, if your annual usage were exactly 16,893 kWh/yr., the table shows your minimum % to be 82.2%. That means a PV system that produced 82.2% of 16,893 kWh/yr. or 13,889 kWh/yr. would zero out your SCE bill.
System Size as a Minimum % of Your Annual Usage
Add a Cushion?
Sizing requires a number of estimates, none of which are likely to be perfectly accurate. We're aiming for an overall 5% margin of error in sizing. This means you don't want to cut it too closely.
Consider adding a little extra to your minimum percentage to protect yourself against the following possibilities (things you should decide, not the vendor):
Of course, some of these possibilities may overlap, so you don't need just to add them all up. About 10% is a reasonable, safe compromise between overkill and undersizing. It will probably offset nearly all degradation of a top-quality system for 30 years, raise the guarantee to almost 100% at 20 years, compensate for most of the weather variability, and give you a bit of margin for error in the estimates. If you want to be more conservative, 15% is certainly not unreasonable. If you want to cut it close, try 5%. Here is the table again, this time showing the recommended 10% cushion.
System Size as a Minimum % & Safe % of Your Annual Usage
In the example, the homeowners pay $200 per month to SCE and use 11,789 kWh/yr. They would start with a minimum system of size 78.1% of their usage, or 9,210 kWh/yr. Then, if they decided to add 10% for protection, they'd want 85.9% instead - a system that produced 10,131 kWh/yr. (Solar Consumer Advisor uses this safe 85.9% in all its calculations.)
In 20 years with best financing, this 10% larger system would cost $675 more ($34/yr.) than the minimal system, after taxes, inflation, and SCE's small payments for over-production.
On the other hand, if the minimum system fell just 5% short of its estimated production, payments to SCE would have been $2,577 more over 20 years. So is it worth spending $675 to avoid a probable loss of $2,577 and possibly more? (As the financing interest rate rises, the additional costs would rise while the savings would fall, but most financing still favors the 10% larger system.)
For a complete guide to all the factors to consider to decide on what solar equipment to get - size, brand, models, and prices, please see the Solar Buying Guide - Step 2.
*Dirk Jordan and Sarah Kurtz, “Compendium of Photovoltaic Degradation Rates,” NREL, 2015.
**“Compare Solar Panels,” http://www.SolarDesignTool.com; accessed July 2016. Also mfr's spec sheets.
***National Renewable Energy Laboratory (NREL), “PV Watts Calculator,” updated April 22, 2016.