As the name suggests, off-grid solar systems operate independently or disconnected from the power grid. According to our research, off-grid home solar systems can cost around $45,000 to $65,000 —significantly more than traditional grid-tied panels.
You can use off-grid solar panel arrays in remote regions with no electric service, and some homeowners go off-grid as a lifestyle decision. Read on to learn more about off-grid solar panels, including the costs, benefits and system components.
What Is an Off-Grid Solar System?
An off-grid solar system uses photovoltaic (PV) panels to charge a battery bank, which you can use with an inverter to power your home. For an off-grid system to work, you must size the solar panels and batteries to cover 100% of your energy needs under all conditions. This includes the winter and cloudy days with reduced sunshine hours when solar panels are less productive.
Unlike off-grid systems, traditional residential solar panels are designed for grid connection at all times. This connection allows you to use the grid as a backup energy source while producing clean energy to lower your electric bills as much as possible.
Solar providers size on-grid solar systems for maximum return on investment but larger systems may require larger sizing to accommodate unfavorable conditions like cloudy weather. You can install a grid-tied solar system with a battery to cover nighttime consumption for less than $25,000, while an off-grid system can cost upwards of $45,000 or more.
Parts of an Off-Grid System
Both off-grid and grid-tied solar systems use PV cells to convert sunlight into electricity. However, there are important differences in their components and configuration:
- Solar panels: Photovoltaic modules are the basic building blocks of a solar energy system. A panel’s PV cells generate DC power (direct current) when exposed to sunlight, which is converted into AC (alternating current) electricity to power your home lights and appliances.
- Solar batteries: Energy storage is mandatory with off-grid solar systems since you cannot rely on the grid at night. You must size your solar array large enough to cover your daytime electricity needs and recharge your batteries for nighttime use.
- Inverters: Solar panels and battery systems provide DC power, but your home appliances run using AC power. The inverter is the device that converts power from DC to AC electricity.
- Solar charge controllers: This device regulates the electricity voltage and current supplied by the solar array to the battery, preventing damage. Pulse-width modulation (PWM) controllers require panels and batteries of matching voltage, while maximum power point tracking (MPPT) controllers can charge batteries with higher-voltage panels. As a result, MPPT controllers can also handle higher wattages than PWM controllers.
Both on-grid and off-grid systems use solar panels and inverters. Batteries are optional with grid-tied systems, but required for off-grid systems. Charge controllers are only required in off-grid systems since you don’t have the option of sending excess solar energy to the power grid.
Pros and Cons of Off-Grid Solar Systems
Pros
Lack of grid connection eliminates monthly power billsYou can generate 100% of your home’s electricity with zero emissionsAvoids frequent fuel purchases required by a traditional home generator
Cons
Off-grid solar can be two to four times more expensive than traditional systemsYou cannot use the grid as a backup if your battery charge is depletedMany renewable energy incentives are not available for off-grid solar systems
Factors Influencing Off-Grid Solar System Cost
Two main factors determine the size and cost of a solar energy system, both of which apply to grid-tied and off-grid installations:
- Home energy consumption
- Local sunshine conditions
Home Energy Consumption
Homes with a higher electricity consumption require more solar panels to generate enough power, and a large battery to store energy for use at night. Off-grid systems are more expensive than grid-tied systems since they must account for worst-case scenarios such as unfavorable weather conditions, short winter days and above-average energy consumption.
Alternatively, installers can size grid-tied systems to cover most of your energy consumption, but you can always rely on the grid for excess capacity. The best solar companies analyze your energy needs as the first step in the solar process to make sure your solar power system is optimally sized for your home.
Local Sunshine Conditions
Even if two homes have the same electricity usage, a property with less sunshine will need a larger PV system size to cover its consumption. Off-grid solar systems must generate 100% of a home’s consumption at all times, and this can be accomplished with fewer panels if sunshine is abundant.
You can use the World Bank Group’s Global Solar Atlas to check the solar resources and sunshine in your location. You can also work with a solar installer to determine an optimal system size based on your location and energy needs.
Off-Grid Solar Equipment Costs
According to EnergySage, you can expect to pay between $45,000 and $65,000 to go fully off-grid with solar panels and battery storage. The battery system is the most expensive component, followed by the solar panels, inverter and charge controller. Comparatively, grid-tied solar systems cost between $15,000 and $20,000 on average.
The following chart breaks down off-grid solar system components and associated costs, excluding installation:
| Equipment | Estimated Cost* |
|---|---|
| Solar panels | $5,000 or more for a 10 kilowatt (kW) array |
| Inverter with built-in charge controller | $4,000 or more |
| Battery system | $20,000 or more for a 20 kilowatt-hour (kWh) battery system |
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*Equipment costs vary depending on the brand and capacity. The table above provides broad estimates without considering installation costs.
Installation and Labor Costs of an Off-Grid Solar System
According to solar cost data from the National Renewable Energy Laboratory (NREL), direct installation costs represent around 7% of the total price of a solar energy system. Based on the price range of $45,000 to $65,000, the cost of direct labor would fall between $3,200 and $4,600.
Keep in mind that solar installations include other costs, such as engineering and logistics. The sum of labor, overhead and profit margins can represent around 40% of project costs.
Off-Grid Solar Permitting and Regulatory Considerations
Since off-grid solar systems are not connected to the power grid, they are subject to fewer regulations than grid-tied systems. You don’t need an interconnection permit from the local utility company since your solar energy system does not interact with the grid in any way. However, off-grid solar systems count as home modifications, which means they are subject to local codes and permitting requirements.
If you plan to use a portable DIY solar kit, there is no need to worry about codes and permitting requirements. However, you should look for a system with a certification mark such as “UL” (Underwriters Laboratory) or “ETL” (Intertek) to ensure electrical safety.
Maintenance and Operating Costs of an Off-Grid System
Off-grid solar systems have the same maintenance needs as grid-tied systems. As a general rule, you should clean solar panels at least twice a year. Dust and other particles can cover the surface of your panels and block sunlight, making your system less productive. Regular cleaning is especially important with off-grid solar systems, since you cannot use the grid to compensate for low productivity.
High-quality solar panels come with a 25-year warranty to cover performance issues over time. and solar inverters and lithium batteries can last for around 10 to 12 years. Lead-acid batteries have a much shorter lifespan — you should plan for a replacement every two to three years.
Financing Options and Incentives
Solar incentives such as cash rebates and tax credits can reduce the upfront cost of solar PV systems. The solar Investment Tax Credit (ITC) is a federal incentive that offers a tax credit worth 30% of solar project costs for on-grid and off-grid systems. However, the availability of local incentives varies —some are available for all solar panel installations, while others are exclusively for grid-tied systems.
You can use a low-interest loan to finance an off-grid solar installation and pay the loan off with the money you save on power bills. Just keep in mind that solar loan programs also have terms and conditions that may exclude off-grid installation.
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The Bottom Line
Off-grid solar power systems can provide clean electricity for homes without grid coverage, allowing some homeowners to go completely off-grid by choice. However, off-grid systems typically cost more than grid-tied panels at upwards of $45,000 and $65,000. Comparatively, grid-tied solar systems cost between $15,000 and $20,000 on average.
From a financial standpoint, staying on grid is cheaper and allows you to claim more solar incentives. An off-grid PV system can be two to four times more expensive since it must be sized for cloudy days and other unfavorable scenarios. Alternatively, installers can size a grid-tied solar system to cover most of your energy usage, relying on the grid to offset cloudy days and power at night.
But homeowners who consider going off-grid may be trying to avoid high energy bills and power outages. A grid-tied solar system with batteries can reduce your power bills to nearly zero while providing backup power during blackouts.
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Frequently Asked Questions About Off-Grid Solar Systems
Off-grid solar panel systems can cost $45,000 to $65,000, according to EnergySage Solar Marketplace. Your cost may vary depending on your system size, components, location and installer.
It depends. Off-grid solar can be cost-effective if you live in a region with no electricity service, or you want to reduce your energy bills entirely. However, a grid-tied solar installation costs less upfront and allows you to claim more solar incentives, resulting in a higher return on investment.
Yes, an off-grid home solar system is two to four times more expensive than a grid-tied system. While off-grid systems cost between $45,000 and $65,000, grid-tied systems cost $15,000 to $20,000 on average. However, off-grid solar is more affordable in smaller applications such as powering a camper van or recreational vehicle.
The number of batteries you need depends on your home’s energy consumption and the size of each battery. For example, if your home uses 30 kWh of electricity per day and you want 24-hour battery backup, you can use three 10 kWh batteries or two 15 kWh batteries.
You can work with your solar installer to determine the ideal number of batteries for your system. A provider may recommend lithium-ion batteries since they can last over 4,000 cycles and do not require frequent replacements. Lead-acid batteries, however, only last for around 500 to 1,000 cycles and eventually need to be replaced every two to three years.
If you have feedback or questions about this article, please email the MarketWatch Guides team at editors@marketwatchguides.com.
