With green living becoming more and more important, many people are starting to install home solar power to supplement their power, and reduce their electric expenses.

But when you install solar power, how much do you actually have to generate to say cut your bills by 50%? And what kind of costs will you be looking at?

Here is a four step process that you can follow to answer these two vital questions:

1 - What Is Your Daily Power Consumption?:

Your first step is to work out the average daily kilowatt hours (kWh) used. This can be done by looking back at your last twelve months power bills, and see how much power used per month, and get the monthly average. This will give you a better estimate of your average power needs by eliminating the effect of the seasons. It is calculated by adding up all 12 bills and dividing the total power used by 12. If you do not have the the past year's bills, then look at your most recent one.

Now take your average kwH per month and divide that by 30 to get your average kWh per day.

- Let's use an example: If our monthly energy usage is 800kWh, then the average daily power used is: 800/30 = 26.7 kWh a day.

- So to reduce your electricity bill to half, 26.7/2 = 13.4 kWh of solar power per day is needed.

2 - Calculate The Total Wattage Of Solar Power Needed:

Before you can work this out, you need to find out how many usable hours of sunlight your region gets per day. A simple way to find that out is to have a look at an insolation map - there is one available on our website, where the original article was posted.

Now take the average daily kWh calculation and divide that by the number of daily usable sunlight hours, then multiply that by 1.25 (to take into account the wasted energy from wiring, charge controllers. batteries, and inverters).

- From our same example, if we lived in California where it gets on average 5.5 hours of usable sunlight per day, the solar panel watt requirements are:

13.4 kWh needed / 5.5hrs of sunlight x 1.25 = 3.045 kW or 3045 Watts a day.

This means we need solar panels with the capacity to produce at least 3045 Watts of power.

3 - The Cost Of The Panels:

Next you need to work out how much it will cost to buy solar panels that produce at least 3045 Watts. Currently the highest average cost for solar panels in North America is $4.85 a Watt.

- Continuing with the same example, the cost of the solar panels will be 3045 x 4.85 = $14,768. This is only to reduce our power bill by 50%, and it is before the costs of charge controllers, inverters, batteries, and electricians.

4 - Subtract Tax Rebates And Subsidies:

Before you think you are going to have to fork out at least $14,768 for only 3045 Watt of solar panel power, you need to consider the effect of government subsidies and incentives.

With the new renewable energy tax credits going into effect from January 1, 2009, and state-side rebates from states such as New York, Connecticut, New Jersey or California, our solar installation costs will be much lower than expected.

- Let's use our example: If we were from California we would receive tax rebates of about 20% of the cost, and a federal tax credit of 40% on the remainder. So after rebates and credits, our solar panels would cost us:

$14,768 - $14,768 x (20%) - $14,768 x (1 - 20%) x 40% = $7,089.

A word of warning: The formula outlined here will give a rough estimate of what you can expect to pay for your solar panel watt needs. Obviously the costs will differ with regard to special offers, the state you reside in and the contractor you use to install the system.

Anyway, from what you can see it would cost us around $7,089 to buy enough solar panels to halve our power bill. We, instead, either get our solar cells at cost or source them for free, and wire up our own solar panels, which obviously saved us a lot of money. The good news is, anyone can learn to find cheap solar cells and make their own solar panel watt power.