The truth is, it's not much easier to answer, "How much will a solar-electric system cost me?" than it is to answer, "How much will it cost me to build a house?"

In either case, the answer has to start with two words-"It depends…" That's because several variables influence the cost of a grid-tied solar-electric (photovoltaic; PV) system. Although there's no pat answer to the price question, the guidelines and examples here will help you estimate your costs, and get you started on your path to energy independence.

How Hungry Is Your Home? The average American home uses roughly 830 kilowatt hours (KWH) of electricity each month. But basing system costs solely on that number would most likely give you an inaccurate and unhelpful result. Your electrical use may vary wildly, depending on the season, what kind of appliances you use, and your usage habits.

So how can you gauge your electrical appetite? For a quick snapshot of your electrical usage, check out your monthly electricity bill. Most bills will include KWH usage figures for the last twelve months; this will give you a good idea of how much electricity your home uses each year. Once you've got a handle on your electrical appetite, taking steps to improve the efficiency of your home will be your next best move. This can have a tremendous impact on the cost of the system you install.

Every dollar you spend on making your home more efficient decreases the cost of your system by approximately $3 to $5. A huge disparity exists between home sizes, efficiencies, and personal electrical appetites, and there's also a similar gap in the efficiency potential of different homes. If you live in an efficiently built, well-insulated home, with modern appliances, compact fluorescent lighting, and high performance windows, you may only be able to reduce your average electricity use by 5 or 10 percent.

But if you're on the other end of that spectrum, by implementing efficiency measures you may be able to reduce your use by 40 percent or more, shaving several thousand dollars off the cost of your system. For example, just replacing an older model refrigerator with a modern, more efficient one could reduce your electrical usage by 50 KWH per month. Combine this with household-wide efficiency strategies and you can make a pretty sizeable dent in your system cost.