How much does one Kilowatt-Hour of solar power cost?

The economics of solar power are difficult to pinpoint due to the variability of sunlight from place to place. Therefore, any average cost given will have a large margin of error. According to SolarBuzz, a single kilowatt-hour (kWh) of solar power costs 20 to 40 cents. This price must compete with conventional modes of power generation, which are generally on the rise, but can cost as low 4 to 5 cents per kWh.

That relatively high cost for solar power is counteracted to some extent by an equally varied set of tax incentives and rebates. The federal government pays 30 percent of total system cost through a tax credit. Many states and utilities also offer similar incentives to varying degrees. States like New Jersey, California and Colorado are leaders in terms of incentives offered.

Another important variable for homeowners to take into account is the eventual return on investment for a home solar power system. The payback period for solar systems varies just as costs do and is a common point of contention. But regardless of opinion, at some point in time - typically between 10 and 20 years - a solar power system will pay for its initial cost with energy savings over time and begin creating free, renewable power.