First, choose how much of your energy usage you want to be running on solar power. Whether the solar power is to power just the water-heating system, or if you want to go completely off-grid and power the whole house by solar power, you need to know how much electricity your home is consuming per month on average.

Look out your monthly utility bills and calculate the average amount of electricity typically used. Note any peak times when you use radically more electricity. The Christmas period can cause surprisingly heavy electricity demands. While your solar power system has to be able to easily cope with your home's average, you need to design your solar power system to deal with the total usage when run at its maximum.

Once you have these numbers, I suggest multiplying the top figure by at least 1.3, ideally 1.5, to give you a working leeway for any extra appliances you might add to your home over time. Now you know how much solar energy you need to pull in from the sun, you have an idea of the amount of solar panels you will need to buy.

I would advise you to buy solar panels online. My advice is to go to ebay and enter the words "solar panel pallet". You will probably get an amazing bargain there. (Thank me later!) Prices have dropped dramatically since the credit crunch. For an average 3 bed house, you can probably buy enough panels to power your entire home for less than $15,000.

That's the first part of installing your solar power system taken care of. The next part involves sourcing the relative skills required for installation including the electrical work. Again, look online or check your local phone book. Get at least three quotations.

Once you have someone you can trust at a good price, discuss with them which inverter to get and how much that will cost. Why? Solar panels capture the sun's power and turn it into direct current, also known as DC power. Inverters convert DC current into AC alternating current. Everyone who installs solar power needs to buy an inverter. Almost all the equipment in your home generally runs off AC, (the stuff that comes out your plug points) so the inverter is essential.

Inverters for an average sized house tend to cost around about $2,000. This shouldn't cost you more than $500. Bare in mind that this bit of kit has a lifespan of about 10 years, while your solar panels, if well cared for, are known to last 25-30 years. So you will need to replace your inverter over time.

If you want to go off-grid, you'll need to store additional solar power in one or more batteries. Discover the cost of them as well.

Finally, remember to factor in your home owner's insurance costs so you can get a real cost in total for your solar power system.

Finding good workmen who are both reliable and experienced at installing solar power is essential. Don't be frugal with your installation costs. After the solar panels themselves, this is probably the most important piece of your solar power system.

Your installation costs shouldn't be much more than $10,000. However, installation costs depend on a variety of factors. How your roof is constructed? If you have a steep roof or Spanish tiles, you will have to pay more for your installation. The panels on these roofs need to be properly secured. Yet further cost goes into ensuring leak-proof seals in the roofing system.

Have an electrician check that all the wiring between the home and the solar panels is installed correctly. Often this won't need much electrical work to set up. Older houses may require additional rewiring, though this is rarely extensive.

Those wanting to run their solar power off-grid will need some good quality batteries to store excess solar power harnessed on sunny days. Thereby, on darker days and at night, you have a reserve of power to run your household appliances. Depending on how much power you need in reserve, in general your batteries shouldn't cost more than $1,000. Second hand batteries can bring that price down, and there is next to no installation cost, just some simple wiring. On average, you will need to change the batteries every 3-5 years.

One more thing. It's a good idea to protect this major new investment. Ask your insurance advisor to add this to your homes and contents policy. It shouldn't cost you more than $100 per year to add the solar power system to your homeowner insurance policy. This will protect the investment you've made on your house. An extra $100 per year to insure your $40,000 solar system against any disaster? Bargain!

A solar power system is a long-term investment. Each step of the installation process should be taken carefully. So as you dont forget the value of your investment, every so often take a look at the payback time. Of course, after it's all paid off, you have free electricity for years to come.

If you were to take a loan to finance your solar power system, the monthly payments will probably be less than your current utility bill, so you are saving money all down the line. Of course saving money is not the only reason it makes good sense to install solar power. Just as you can pass your home on to your children in good order, so you can pass on the planet. That's the very least they deserve. Don't you agree?