Background
PV systems are more cost-effective in some situations than in others, depending on the size and nature of the load, the availability of the solar resource, and the cost of alternative sources of power. In many situations, PV can be more cost-effective than many alternatives.
For example, PV is often the cheapest source of electricity for a remote home that is located far from the existing utility grid. In these instances, extending the utility grid is often not feasible or very expensive, making PV a good choice. However, in situations where utility-supplied electricity is readily available and inexpensive, PV systems become less cost-effective.
When we think about whether a PV system is cost-effective, we must consider both financial costs and environmental costs. Financial costs can include system and component costs, design costs, installation, structural support for the modules, site preparation, and more. Today in Montana, a 2- to 4- kilowatt (kW) grid-intertied PV system will have an installed cost between $9 and $16 per watt, with the electricity produced over the life of the system costing 25 to 30 cents per kilowatt-hour. In comparison, residential electricity purchased from the utility grid costs about 7 cents per kilowatt-hour.