
This page goes over determining what size of PV system you want to buy.
In actual fact, a gridtie system can be almost any size  there is no "exactly right" size.
The factors that determine what size system you install are:
 What your current power usage is.
 How much money you have to spend on the system.
 How much you can cut your current power use through conservation and efficiency.
 How much of your electric usage you want the gridtie system to cover.
 How much space you have to install a system.
Since the grid is always there to cover what your PV system does not produce, you are not going to "run out" of electricity if your PV system falls short of your power demand. So, this is really a decision about how much you want to cut your power bill and your CO2 emissions.
But, I do think its important to understand your current electricity usage, and how much of that usage the PV system is actually going to offset. You don't want to spend a lot of money on a PV system, and then find your electric bill has not gone down nearly as much as you expected.
In our case, when we moved into this house in 2000, our power usage was about 1000 KWH per month. This is obscenely high, but close to the US household average. Through conservation and efficiency, we were able to cut this down to just about 500 KWH per month. This conservation was a part of our "Half" program... All of the projects we used to reduce electricity consumption are listed along with what they cost and what they saved. One thing that leaps out of the numbers immediately is that conservation and efficiency are much more cost effective at saving electrical energy and carbon than the PV system is. In our case, cutting electricity use from 1000 KWH to 500 KWH per month cost a bit over $1,000. Installing the PV system, will save us just 250 KWH a month, but cost about $6,500 after rebates. So, the advice that everyone gives you about conservation and efficiency first, and then PV is absolutely true!
So, after taking a cut at conservation and efficiency, we are down to 500 KWH per month. How much of that do we want to address with the new PV system?
We decided to go after about half of the 500 KWH with the new PV system. The logic for this decision is:
 Our power company only pays for the PV power until your net usage to zero over a year. If you use 6000 KWH a year, and you generate 7000 KWH a year, they only pay for the first 6000KWH. They will not let your bill on a yearly basis go below zero.
So, this argues for not having a system larger than your actual needs.
Each utility has their own net metering arrangement, so check on yours.
There are a few places that actually pay a premium for solar generated power, and will pay for as much as you want to produce  if you have this arrangement, you may want to put in a larger system.
 We feel that we can still save some additional electricity through conservation and efficiency  we wanted the PV system to be small enough so that we still have some incentive to save additional power through conservation.
 The cost of a system this size matched pretty well with what we are willing to spend at this time.
 The gridtie systems, and the one we chose in particular, allow fairly easy expansion of the system at a later time if we decide we went too small.
So, having figured out how many KWH per month we wanted to save, how do we figure out what size PV system that will take?
The answer is PVWatts. This is the very nice PV system sizing calculator developed by NREL. Its a good calculator  its honest, takes into account your local weather, all of the important PV system parameters, and is easy to use. There are two versions, creatively named Version 1 and Version 2. I think that for this kind of calculation, Version 1 is easier to use, and the link above points to Version 1.
Just pick your location from the map. Then pick a trial size for the "DC Rating" in kilowatts, and click on "Calculate". If the system turns out to be too small or too large, just adjust the "DC Rating" input until you get to the size you want.
Here is a sample run for a 2.0 KW PV system in Billings, MT:
* * *  & Cost Savings 


The trial system I put in here with a 2.0 KW DC rating generates 2856 KWH per year. This is just a bit short of our goal of 3000 KWH a year  we ended up installing a 2.15 KW DC rating system.
What PVWatts calls the DC Rating is the total STC rating of the PV panels  this is what almost all systems advertise as their system size. So, if you see a system advertised as a 2000 watt PV system, they very likely mean a system with a DC Rating and an STC rating of 2 KW or 2000 watts.
Note that PVWatts has other inputs that you can adjust to match the system you are going to put in. For example:
 You might want to adjust panel tilt and orientation if you know what that is going to be (for example to match your roof).
 If you plan to use a tracking system so that the panels track the sun's movements, you can select a tracking system.
 You can adjust the factors that go into the Derate Factor. For example, some of the Derate factors do not apply to the system we bought, so I adjusted accordingly.
 You can enter what you actually pay for one KWH of electricity.
But, I'd say, don't sweat it too much. Your life will not change much if you miss the system size by 10 or 20%.
If the economics of the PV system is a major factor for you, than have a look at the economics page...
Next  Where to locate the PV panels? 
Gary November 20, 2009