One place to start in considering adopting solar energy systems is consultation with a renewable energy System Architect. Energy system construction, fabrication, assembly, installation, plumbing, and wiring can be implemented by contracting professionals (in Washington State), facilitated through the Olympic Energy Network.
[Click for network] [or E-mail OlympicEnergy@aol.com]
Economic Realities of Renewable Energy (RE)
- RE is "expensive" - you are purchasing all of your free power (for 10 to 30 years) UP FRONT. So, you have to look at life cycle cost when assessing a return on investment. What is a reasonable cost for energy security? Personally? As a nation?
- For every $1 you spend on energy efficiency or conservation, you save $3 on RE system cost.
- RE system efficiency can be a significant factor in achieving a good return on investment.
- RE financial incentives vary from state to state. Washington provides for a sales tax exemption and utility solar energy production incentive payments through 2014.
- Trends can not be ignored. PV prices are coming down, wind power has been affordable for years and continues to experience growth in turbine designs and reliability, and hydro electric systems provide some of the best returns.
Olympic Energy Systems, Inc., through its consulting role, conducts site surveys to assess renewable energy potential. The design process can achieve useful energy systems that provide immediate benefit and provide for gradual expansion, as budgets and plans permit. Such expansion of renewables really means the contraction of non-renewable systems, in a reasonable and beneficial way for all interests.
Click for Washington (State) Incentives for Renewables and Efficiency to save $$$
Some General Economics (Illustrative Only)
Power, Solar = Efficiency (8 to 15% typical) x 1000 Watts/square meter x Area (PV) in WATTS
Power, Wind = Efficiency (30 to 40% typical) x 1/2 Area x Air Density x Cube of Velocity in WATTS
Power, Hydro = Efficiency (50 to 75% typical) x Factor x HEAD x FLOW [Feet x GPM] in WATTS
For a 2,000 Watt or larger system:
Capital Cost, Solar = $6 to $10 per Watt installed, typical
Capital Cost, Wind = $2 to $5 per Watt installed, typical
Capital Cost, Hydro = $1 to $4 per Watt installed, typical
Life Cycle Cost, Solar = $0.14 to $0.25 per KWh, typical [without subsidies]
Life Cycle Cost, Wind = $0.04 to $0.10 per KWh, typical
Life Cycle Cost, Hydro = $0.02 to $0.03 per KWh, typical
A Look at the Economics of Solar PV
The choice between incorporating a 600 Watt and a 3000 Watt Solar PV system should look at economics and risks, as well as personal preferences. In the economic sense, more is not necessarily better. Given a 25 year period, 4.5 peak sun hours per day average, a 4% interest rate, a $0.10 per KWh subsidy (or Green Tag, available now), and a $0.08 per KWh utility price, the Present Worth of the two alternatives are as follows:
P(600W) = -4,500 + 185(P/A, 4%, 25) = -4,500 + 185x15.6 = -$1,600
P(3KW) = -21,000 + 925(P/A, 4%, 25) = -21,000 + 925x15.6 = -$6,600
In economic terms, the smaller system provides the best value over the 25 year system lifetime, since the Present Value of the smaller system is larger, albeit both cases illustrate a negative present worth. In reality, the systems do not necessarily pay back. Interest rates play an important role in the economics of these systems, whereby lower interest rates tend to increase the Present Value and decrease the Payback period. As interest rates begin to climb out of the lows of the 2000-2002 recession, investment in capital-intensive projects like Solar PV look less attractive, economically.
THE NEW SOLAR ENERGY INCENTIVES NOW AVAILABLE HAVE CHANGED THE ECONOMICS!
The Solar Energy Incentives summary provides an analysis that makes the case for solar energy systems, that is, shows the positive economic returns we, as investors, should expect.
Renewable Energy Cost Model (RCM) ------ Version SV1 is NOW AVAILABLE ------
OES is developing its Renewable Energy Cost Model (RCM), helpful to those considering RE solutions to their energy needs. The model is a tool for assessing the economics of renewable energy systems. General applications include cost (feasibility) studies, decision analysis, engineering support, and education. The RCM covers a range of energy applications (electric, thermal, on-grid, off-grid, solar, non-solar), with a simple user interface, hosted in MS Excel, and usable with @RISK statistical analysis tool. Features include the calculation or estimation of:
Costs of Renewable Energy Systems (in current year dollars)
Cost Sensitivities (to system and economic variables)
Economics of RE Systems (ROR, Payback, Present Worth, etc.)
Potential Energy Savings
Life Cycle Costs (non-recurring and recurring)
Everyone in the Pacific Northwest asks...
"Do we have enough sun here for solar?"
Let's have the Renewable Energy Cost Model answer that question...
When comparing grid-tied PV systems of different sizes installed in Washington versus California, we see some interesting trends: 1) The insolation level of 5 Peak Sun Hours per Day (PSHD) of California makes all the difference when looking at the economics of these PV systems. IF Washington State had 5 PSHD, and given the currently available incentives (Federal Tax Credit and State Production Incentive through 2014), THEN PV systems in Washington would provide for a positive Present Worth, ie, a net return. 2) The higher cost of utility power in California ($0.16 per KWh versus about $0.08 per KWh in Washington) also makes the difference when looking at the economics. The best place, with respect to economics, to install Solar Grid-Tied PV systems in the United States is (southern) California. But, 85% of the American people do not live in California, so we must look at other factors into why we would invest in solar energy systems.
RCM Output
At what price per Kilowatthour would electricity in Washington State need to go to provide for a positive Present Worth (net return) on Solar PV systems installed there?
At only $0.10 per KWh (in the year of system installation, as a 4% per year increase is assumed over the service lifetime), a solar grid-tied PV system in Washington State would pay off over its service lifetime! Therefore, a system investment now, at a utility price of less than $0.08 per KWh, is really for the purchase of energy security, because could that utility price jump someday? The state's average KWh price would not even have to reach the current US average (over $0.10 per KWh) before providing positive economic benefits.
A Solar PV investment in Washington State is a worthwhile proposition. The investment strategy should include provisioning for the addition of more PV panels later, without having to upgrade the grid-tied inverter, combiner boxes, or wiring. A combination of utility rate hikes and decreasing PV panel prices will determine when to expand the system's PV array size. [Yes, PV panel prices will come down again someday, as the increasing production capacities and improved technology trends allow.]
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RCM version SV1 (Simplified Version 1), addressing Solar PV and Solar Hot Water systems, is now ON SALE for $200, tax included. The RCM can also be licensed and leased on a yearly basis. For personal use only. Not for resale. Call, mail a check, or send a request to Olympic Energy Systems ().
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A preliminary RCM report for a Solar PV System planned for installation in Ohio:
The RCM has been updated to capture the limited duration and cap limits of the Washington State and federal incentives for solar energy systems:
Wind monitoring is one way of assessing a site's wind power potential. Though the region experienced a mild winter of 2002-2003, results of monitoring at the Jefferson County Fairgrounds in Port Townsend, Washington showed 8.4 MPH average winds in December 2002. The North Olympic Peninsula is generally a very good Class 1 wind area, with average yearly wind speeds in many areas approaching 9.8 MPH, while some areas are certainly over 10 MPH.
The region, as it lies in the rainshadow of the Olympic Mountains, receives more sun in the summer months than Houston, Texas. That is, a solar panel will produce more electric power from May to October here (in Port Townsend or on Whidbey Island) than the same panel in Houston.
The ultimate goal for adopting renewable energy is sustainability. There is nothing sustainable about adding new coal or natural gas burning electric plants, especially without bona fide conservation. Clean and renewable energy maintains the health of the environment, while relying only on the sun coming up each day, which has never failed to occur. Hydrogen generated with renewable energy is scientifically and logically the key to a sustainable energy future, as the properties of hydrogen provide for energy storage (important when considering the cyclic nature of renewable energy - solar, wind, and hydro) and provide for clean and carbon-neutral emissions.
For a good site to provide insight into our hydrogen future, see: www.hydrogen.org, www.ttcorp.com/nha (providing the Hydrogen Commercialization Plan of the National Hydrogen Association), www.fuelcellpark.com, and www.fuelcellstore.com.
There is more to renewable energy than PV panels, wind farms, and water turbines. The equipment, now more reliable and warranted more than ever before, is adjunct to a lifestyle that is more productive and satisfying. Energy conservation is a fashion that is here to stay and which has an effect of making us all appreciate life more. A benefit worth noting - when one utilizes renewable energy, one's own personal energy is tapped, as well. Spirits are lifted and a sense of security flourishes. When energy is managed in a clean and sustainable way, there are a fewer worries to trouble us.
Throughout the United States, Solar Energy International hosts workshops intended for the general public, including Introduction to Renewable Energy, Solar-Electric (PV) System Design & Installation, Wind-Electric System Design & Installation, and Micro Hydro Power System Design & Installation. In the Pacific Northwest, Guemes Island near Anacortes, Washington plays host to these workshops in the spring and fall. For more information, contact Ian Woofenden at ian.woofenden@homepower.com or SEI at www.solarenergy.org.
We recommend signing on with the American Solar Energy Society at www.ases.org, or with its local chapter Solar Washington at www.solarwashington.org.
Notes
Energy conservation - the efficient use of energy, with or without reducing the services or work provided - is simply doing more with less. The Solar Energy "industry" will have a challenge countering the predicted 1.4% average annual increase in US energy consumption through 2020, especially with energy efficiency improvements already included in the prediction. We might see the US consumption of 100 Quadrillion BTUs in 2000 climb to 130 Quadrillion BTUs in 2020. One quadrillion, or Quad, is a billion million BTUs, equivalent to the energy output of a PV array about 20 miles square in a year.
The US per capita energy consumption is 4th out of 180 countries (at about 350 million BTUs per year) and is 1/4 of the world's total, with per capita water consumption at the top of the list (at 1,932 cubic meters per year).
When the energy policies of the presidents since Carter are analyzed, one finds varying approaches and objectives in each administration. President Carter believed in government responsibility and conservation. President Reagan sought less government and cut renewable energy funding, with President Bush I following a similar philosophy, with little or no conservation. President Clinton increased R&D and promoted appliance efficiency standards. President George W. Bush seeks energy security, pushing for more drilling and clean coal technology.
The US lags the world in energy conservation and efficiency. Per unit of GDP, the US consumes about 30% more energy than France, Germany, or Japan. The US per capita Green House Gas emissions are the world's highest.
Energy efficiency efforts at the federal and regional levels are indeed impressive. The federal government continues to reduce its annual consumption through its FEMP (Federal Energy Management Program) program, which sets and pursues goals. Ongoing efforts (like variable speed fans, appliance efficiency standards, magnetic drive couplings, etc.) show investments in new equipment and technology, largely benefiting industry and utilities with reasonably short payback periods. Building efficiencies, particularly for residences, are stabilizing the demand for energy in that sector.
But, the rising swell of energy demand (increasing faster in commerce and transportation) still threatens to undermine the gains from renewable energy and energy efficiency efforts. What more must we do?
Certainly, we all want good health, the ultimate goal of clean energy. We also want to save money and have energy security. Sustainable living resides at the elusive intersection of diverging energy demand and converging clean energy supply.
What we need is the concept of energy conservation embedded into our very psyche, our being, our habits, our activities, and our goals. Solar Washington must find a way to mainstream energy conservation. For starters, we self-educate and learn all we can about conventional energy - the science, production, usage, and flow. Secondly, we educate others, especially the young and school age. Thirdly, we involve ourselves up and down in the energy realm - from government policies to industry cooperation and personal adoption.
Data sources: Energy Information Agency (2003) and the World Watch Institute (2004)
S i d e N o t e
The essence of energy efficiency and energy use efficiency is "doing more with less". The essence of energy conservation is "never needing or using energy to begin with". The modern world is developing more fuel efficient automobiles, PV panels with greater conversion efficiencies, and much more. But, not much is being done to stem the tide of consumption, and thus, overall energy use.
In each step of our growing civilization - from hunter-gatherers to agrarian to industrial to post industrial - our activities are ever more energy-intensive. A peasant in 1800 would expend 1 calorie to produce 10 calories of food, but now one expends 10 calories to produce 1 calorie of food. The calories we use now to produce what we need (and want) come from fossil fuels, primarily oil for production and distribution of food, coal for production of electricity, and natural gas for heat and industrial applications.
Our conventional energy supplies are dwindling and we must adopt new energy strategies in order to sustain life as we know it (and want it). Having a machine, like a car, motor, heater, or light, perform certain tasks efficiently is ultimately insufficient in reversing the demand for energy. We must look at new ways, modes, and methods to accomplish what we need (and want) while reducing the total energy demand and the energy intensity that has crept into our modern lives. Energy use efficiency should be basic to our energy strategy, now and forever.
Recommended Reading
"The Prize - The Epic Quest for Oil, Money, and Power", by Daniel Yergin
"The Commanding Heights" [The Battle for the World Economy], by Daniel Yergin & Joseph Stanislaw
"A Short History of the Planet Earth", by J.D. MacDougall [This book provides the basic knowledge for understanding the earth's geologic and climatic history and implications for life and the evolution of life.]
"Over Our Heads - A Local Look at Global Climate", by John C. Ryan (Northwest Environment Watch)
"The World Without Us", by Alan Weisman
"Apollo's Fire", by (US Representative) Jay Inslee
"THE CITIZEN-POWERED ENERGY HANDBOOK - COMMUNITY SOLUTIONS TO A GLOBAL CRISES", by Greg Pahl (2007)
"Natural Home Heating: The Complete Guide to Renewable Energy Options", by Greg Pahl (2003)
"SOLAR HOT WATER SYSTEMS Lessons Learned 1977 to Today", by Tom Lane (2004)
Local Links
www.2good2toss.com Want to recycle?
www.structurestogo.com Want to build small and energy efficiently?
www.porterfarm.com Want to learn (or relearn) common sense?
www.northwestwatch.org Want to Think Global AND Think Local?
