As fossil fuel prices increase along with concern for the environment, interest in converting sunlight directly into electricity using photovoltaic solar cells continues to mount. And a common question is — when will photovoltaics be economical for residential use? Phoenix, Arizona, was chosen as the site to evaluate the economics of photovoltaic application to an energy conservative home (7109 kwh/yr). The analysis shows that a large summer load exists — which is what the utility company has been telling us for years. With such a load profile, optimum tilt angle of the solar array is 10 deg from the horizontal facing south (of interest in design of the roof structure). Peak power loads can be most economically handled with an auxiliary power source — either by power from the utility grid or from a gasoline generator. The auxiliary source would handle 18 percent of the load in June, 34 percent in July, and 24 percent in August. For the remainder of the year, power would be supplied 99 percent by the solar array. The need to handle peak loads with auxiliary power considerably reduces the solar energy storage problem in 1979. However, auxiliary power and energy storage in 1989 becomes a major part of the cost when grid power is not available. Cost per kwh for PV power in 1989 is projected at 2.8¢ when using utility grid backup and 11¢ when using generator backup.