Several readers have questioned the validity of my assertion that energy efficiency can dramatically reduce the initial cost of a solar electric system. In my blog Making Solar Electricity Affordable, I noted that each dollar invested in efficiency could save $3 to $5 in initial costs. The reason for this is that it is much cheaper to save energy than to generate it with a photovoltaic (PV) system.

To illustrate my point, I’ve included a table from a book I am publishing later this year entitled Power from the Sun. It’s an introduction to solar electricity that’s being be published by New Society Publishers. This data was provided to me courtesy Kurt Nelson, an experienced PV installer and teacher.

In Table 1, I list four energy efficiency measures and how much they’ll save a homeowner in watt-hours (column 4). Column 5 shows the cost of each measure.

Table 2 lists the daily and annual savings in kWh and the total cost of the improvements. It also lists the annual savings and the cost of the system. As you can see, the return on investment is 5.5 percent. These measures will save about 1,296 kWh of electricity per year. These changes cost nearly $1,700.

Now, here’s where things get interesting. Table 3 shows how much it would cost to generate this same amount of electricity via a grid-connected solar electric system — the cheapest of all PV systems. A PV system that generates 1,296 kWh per year would cost about $10,000 in Wisconsin. As you can see, it is nearly six times more expensive to generate electricity than to conserve it.

Factoring in the 30-percent federal tax credit drives the system cost down to $7,000. Even so, it is still four times more expensive to generate electricity via a PV system than to save it through efficiency measures. Every dollar invested in efficiency would save $4 in system cost.

Remember, energy efficiency measures will reduce the initial cost of battery-based systems even more, because batteries add substantially to the cost of these systems. And, off-grid systems don’t qualify for federal tax credits. In this example, an off-grid system that produces 1,296 kWh of electricity per year could easily cost $14,000. In this case, a PV system is 8 times more expensive than efficiency. Every dollar you’d invest in efficiency could save $8 in installation costs.

All this is to say, that efficiency measures are far cheaper than a new PV system. I’m not trying to discourage people from installing PV systems, just trying to encourage people to implement efficiency measures first. That way, you’ll end up spending less on a PV system.

Many people who are contemplating installing solar electric systems on their homes struggle with the high initial costs. To pay for a system, they either have to dip into their savings or take out a loan. A 3- to 5-kW grid-connected solar system, suitable for most homes, can run $30,000 to $50,000.

Even with recent legislation that provides a 30 percent tax credit for solar and wind systems for homes and businesses, the cost of such as system will still cost $21,000 to $30,000, which is a substantial piece of change.

Isn’t there some way to reduce this cost?

There is. It's called efficiency.

Richard Perez, founder of Home Power magazine, ran the numbers. He found that every dollar invested in energy efficiency could reduce the cost of a photovoltaic (PV) system by $3 to $5.

How?

By reducing the size of a system one must install to meet his or her needs. The economic savings from efficiency are quite substantial. For instance, a $2,000 investment in home energy efficiency — for example, weatherization, insulation and energy-efficient compact fluorescent or LED light bulbs — will reduce the demand for electricity. This, in turn, will reduce the size of the PV system required to meet one’s needs. It could easily save $6,000 to $10,000 on the cost of the system of a 3- to 5-kW PV system before tax incentives. Taking into account the 30% federal tax credit, the savings would be $4,200 to $7,000.

Spend a little more on efficiency and the cost of the system drops even more. If you invested $4,000 in efficiency, the total system cost would decline by $12,000 to $20,000. Taking into account the federal tax credits once again and the decrease in initial cost would be $8,400 to $14,000.

That’s not a bad return on an investment in efficiency.

Instead of spending $21,000 to $30,000 for a system, you’d pay $12,600 to $16,000.

So, if you're thinking about installing a PV system, think efficiency first. It’s a gift you give yourself and the planet. It will reduce energy demand, reduce pollution, and reduce the cost of a system substantially. Moreover, the savings will provide dividends for the life of the house.

PHOTO BY JESSIE FETTERLING

Usually when people talk about using greener lighting, they're talking about compact-fluorescent light bulbs, or CFLs. But what about the other green light bulbs, LEDs?

LEDs, or light emitting diodes, are all around us. These long-lasting, efficient light bulbs are used for all kinds of applications, and they’re especially good for those that involve gently glowing, bright-colored light. That includes stoplights, Christmas tree lights, exit signs, the display on digital clocks and the indicator lights that show when electronics are switched on.

Although LEDs are also being developed for general lighting, most of them still aren’t bright enough for say, reading. That may all change soon though, because there’s a lot of research happening in this area.

More Info:

For a good general description of what LEDs can do, check out this article from Scientific American.

For a mind-bending trip into the world of semiconductors (a world that also includes solar panels) check out this article on LEDs from How Stuff Works.

And for more on LED research, take a look at this article from the New York Times.

PHOTO BY ISTOCKPHOTO

PHOTO BY ISTOCKPHOTO

Above: Photos of LEDs in action. The top photo is an LED bulb used for general lighting. Below: An LED stoplight and LED holiday lights: two common uses for LED bulbs.

PHOTO BY ISTOCKPHOTO/OLAF LOOSE

Sure, most people know that you can produce electricity with photovoltaic (PV) panels. But have you ever wondered exactly how solar cells generate electricity?

There’s a great, very detailed explanation of the whole process on the How Stuff Works website.

Or, here’s another idea. You can skip the article and jump straight to this solar cell quiz (also from How Stuff Works). You can learn a lot just by guessing, because the quiz format explains the answer right after each question.

If you're brave enough to share your quiz score (and whether or not you read the article) post it in the comments section below. My quiz score was 7/10 after reading the article. Think you can beat that? Go ahead, give it your best shot!

Cool Earth Solar has designed a mechanism for harnessing solar energy that looks like something more out of the Jetson’s than something that can catch the sun’s power.

Rather than flat panels, Cool Earth Solar’s model looks like an elongated bubble. According to this article, each unit is 8 feet in diameter, weighs 20 pounds when inflated and can produce 1 kilowatts. The article said these units can produce 300 to 400 times that of a standard solar-power generator.

The installation of these new solar panels is a little bit stickier. As I read the article, it seemed like these “solar concentrators” are suspended in the air by a wire attached to two wooden polls. But if you read something different want to correct me, by all means please do.

Cool Earth Solar’s first prototype plant is set to open in California within the next few weeks.

San Francisco is paying its way to become a more energy efficient place by helping its citizens afford solar panels. The city’s board of supervisors recently approved the Solar Energy Incentive Program, GoSolarSF, which is now the country’s largest municipal solar program. With an annual budget of $3 million for the next 10 years, the program offers up to $6,000 to residents and up to $10,000 for businesses in the form of tax incentives for private solar installations. It will give out even more than that to low-income San Franciscans and nonprofit, multi-family residences. The program’s goal is to eventually have 10,000 solar rooftops in the city compared to the 770 they have right now. The program started accepting applications on July 1, 2008. Once they begin building, other cities will hopefully start to spend a little also.