Going Solar: hot technology cools energy costs
by Cate Montana
In 1978, John Schaeffer, founder and CEO of Real Goods, sold and installed the first residential photovoltaic power system in the United States. It was an off-the-grid 12 volt, DC (direct current) system that ran at an 8% conversion efficiency and, because of the cost of the system, produced electricity at around $500 per watt.
Today the same single-cell, crystalline silicon based photovoltaic (PV) system, averages between 16-20% efficiency and has dropped to nearly 1/100 th of the price. A 2-kilowatt system that meets nearly all the needs of a very energy efficient home costs around $20,000 installed, or $10 per watt. At the high end, a 5 kilowatt system that completely meets the energy needs of most conventional homes can cost $30,000 to $40,000 installed, or $6 to $8 per watt. These prices are rough estimates and the actual costs depend on the system configuration, types of equipment and other variables. All the same, for the average consumer solar still packs a punch when it comes to sticker price.
Fortunately states like California, Nevada, Wyoming, and Connecticut are getting into the act, offering everything from tax incentives to rebates for homeowners who decide to go solar. In Colorado, for example, there is a $4.50 per watt rebate for “renewables” - alternative energy provided by homeowners from any renewable source such as solar or wind generation. Incentives like this can bring the cost down to $1.50 per watt or even less. The California Energy Commission estimates that a home that consumes 6,500 kilowatt-hours of electricity per year and sports a 3-kilowatt solar-electric system will get up to 93 percent of its energy from solar energy.
“My opinion is that the technology is going to continue to grow incrementally and if you analyze the economics of it right now, solar makes sense in the states where there is a rebate,” says Schaeffer. “It's got a six to12 year payback which translates into a return on investment of 10 to 15%, which is better than you'll get in the stock market or a CD.” In states without a rebate Schaeffer says the payback is closer to10 to 20 years. But there are other advantages that make installing solar worthwhile.
Unlike 30 years ago when the average solar-powered household was totally off the grid, today almost 95% of the people who install solar systems do so while remaining tied to the utility company for back up. Not only does using the grid for backup rather than an on-site battery bank reduce the installation cost of solar by around 25%, people who invest in residential renewables can sell back the extra power they generate to their utility company, often at the going retail rate the company charges. Even if they don’t sell their energy, installing a renewable system usually locks in their utility rate per kilowatt hour into perpetuity – a good deal when you consider that electricity rates are going up anywhere from of six to eight percent a year.
In some camps, thinking in terms of “payback” or return on investment is a suspect method of evaluating purchasing alternative energy technologies for the home. “The whole thing about payback is really a false logic,” says Northwest Eco-Building Guild board member and green building contractor Fiona Douglas-Hamilton. “Few people think in terms of payback when they build a new patio or spend $50,000 building a swimming pool. They just want to fulfill a desire. Why should luxuries be exempt while sustainable technologies are forced to measure up to some arbitrary payback concept? It just demonstrates our skewed value structures when it comes to spending money.”
Values aren’t the only things that are skewed in the alternative energy market. As a society we are heavily invested economically and emotionally in existing petroleum-based energy systems like propane and heating oil. Rarely do we access information that gives us the real price structures and costs involved in these systems. Biobased Manufacturers Association Chair Kim Kristoff, president and CEO of the bio-based company Gemtek Inc. points out that we tend to look at petroleum in terms of market price at the pump. But this price does not reflect heavy government subsidies and other costs that we pick up as taxpayers. “We leave out of the discussion the subsidies, the dead people, and the billions thrown into the defense of petroleum,” says Kristoff, who sits on several congressional advisory committees. “I still run into people who actually believe that gasoline only costs two dollars and 20-30-40 -$.80 a gallon. All you have to do is divide all the billions spent by the number of gallons sold and you can figure out real quick it has to be more than $15-20 per gallon.”
But you don’t have to tweak petroleum prices to make photovoltaics an attractive deal. In some applications PV is already the cost effective choice in a straight energy cost comparison with standard market price gasoline. Mike Nelson, director of North West Solar Center, a Washington State University energy program in Seattle, WA, says that currently a solar array on the roof of an eastern Washington house will provide enough electricity to drive a plug-in hybrid Prius 15,000 miles a year at a cost for photovoltaics that is less than the cost for the comparable amount of gasoline.
Should I wait for nano?
Solar power is currently used in about 1% of homes nationwide, and the industry is experiencing an explosive growth of 30% per year. Manufacturing costs for both monocrystalline and polysilicon wafers, the basis for most PV panels, continue to drop. But like every burgeoning industry, solar has experienced growing pains. Manufacturing costs for the wafers which should have dropped by as much as 50% over the last three years have not done so because of a chronic shortage of polysilicon. New silicon refineries are ramping up across the country, the largest of which will be a Norwegian owned refinery in Moses Lake, WA. But building refineries takes time, and critics point out that many refineries still use older technologies that use more energy for silicon production than they should.
But many solar experts like Schaeffer and Wilson are cautious about the new technology. They remain convinced that continued refinements in silicon wafer PV technology will guide the market over the long haul. “Over the last 30 years every year you hear about a new technology coming down the block that is going to be 30, 40, or 50% percent efficient and cut the price by 70%,” says Schaeffer. “And every time that happens we get a load of phone calls from people asking should they delay buying their photovoltaic system until it comes out. This has happened with everything from ribbon string technology, to gallium arsenide, to nanotechnology, and all kinds of stuff. But the story remains the same, solar works now.”
And it works well. The hippie image of solar from the “back to the Earth” movement in the 60s and 70s is long gone. Inverter technology that converts solar DC to AC current has advanced to the stage where solar created energy is as clean as that purchased from “the mains” (mainstream utility companies). Clunky solar panels are still around, but, responding to aesthetic demands, m anufacturers have also shrunk and reshaped them so they can look like metal roofing, shingles, and even cement tiles. No matter what your lifestyle, solar power can support it. But there are ways to have it all and garner a ton of energy savings along the way.
The average home in America uses anywhere from 18 to 30 kWh (kilowatt hours) a day. Whether on the grid or off the grid, Nelson advises people who want to save money to become “energy Nazis.” First and foremost is to convert incandescent light bulbs to compact fluorescents. If you’re building, if possible site your home to the south in order to take advantage of day lighting and only use electric lights at night. Ditch the CRT monitor on your computer and get an LCD flat screen. Better yet, ditch your floor model computer which draws 250 watts a day and get a laptop that uses only 20 watts. If you have to have a wide screen TV buy an LCD model – plasma screens are energy hogs. The largest electric load we have in our houses is refrigeration, so buy a good Energy Star rated refrigerator, or better yet, buy a European Vestfrost refrigerator that sells for $1100 and uses a couple of kilowatt hours a day.
“The reality is that most of us can get by with about 10% of the electricity that we currently use simply by doing it elegantly,” says Nelson. “My house is on grid but we use an average three and half kilowatt hours a day of electricity. The average Washington State home uses about 30 kilowatt hours a day. So we're using roughly an eighth of the electricity that the average person uses just through conscious conservation.”
He also says it may seem counterintuitive, but keep the espresso machine and the hairdryer. They are only used for short periods of time each day, so their “duty cycle” is small. According to Nelson, a hairdryer makes more energy sense than using regular incandescent light bulbs.
“Think about it. An incandescent light bulb pulls 100 watts and it's on eight hours a day. That's 800 watt hours per day, almost a kilowatt of energy. The hair dryer pulls 1500 watts, but it's only on for five or ten minutes. Do the math. The central problem of conservation is it's really an act of operating more intelligently with higher levels of information than anything else.”
DOE Consumer’s Guide “Get your Power From the Sun” http://www.nrel.gov/docs/fy04osti/35297.pdf
PVWATTS calculates electrical energy produced by a grid-connected photovoltaic (PV) system within the United States and its territories. http://rredc.nrel.gov/solar/calculators/PVWATTS/
RenewableResourceDataCenter (RReDC) is supported by the National Center for Photovoltaics (NCPV) and managed by the Department of Energy'sOffice of Energy Efficiency and Renewable Energy. The RReDC is maintained by the Electric Systems Center at the National Renewable Energy Laboratory. http://rredc.nrel.gov/
DSIRE is a comprehensive source of information on state, local, utility, and federal incentives that promote renewable energy and energy efficiency: http://www.dsireusa.org/