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 blogMaking 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 1: The Cost of Energy Measures and Energy Savings |
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| Efficiency Measure | New Consumption | Old Consumption | Energy Savings | Cost to Implement |
|
New Refrigerator |
1,300 Wh/day |
2,200 Wh/day |
900 Wh/day |
$849 |
|
New Chest Freezer |
900 Wh/day |
1,800 Wh/day |
900 Wh/day |
$799 |
|
Six 18-Watt CFLs |
432 Wh/day |
1,800 Wh/day |
1,368 Wh/day |
$24 |
|
Eliminate Phantom Loads |
0 |
384 Wh/day |
$13 |
|
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.
Table 2: Energy and Economic Savings from Efficiency Measures |
|
| Daily Energy Savings | 3,552 watt-hours per day |
| Annual Energy Savings | 1,296 kilowatt-hours |
| Annual Savings | $92 |
| Cost of the Improvements | $1,685 |
| Return on Investment | 5.5 percent |
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.
Table 3: Comparison of Costs and Savings from Efficiency vsPVs |
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| Energy Efficiency | PV System | |
| Cost | $1,685 | $10,000 |
| Annual Savings | $92 | $92 |
| Return on Investment | 5.5 percent | 0.9 percent |
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.
Contributing editorDan Chirasis a renewable energy and green homes expert who has spent a lifetime learning life’s lessons, which he shares in his popular blog,Dan Chiras on Loving Life. He’s the founder and director of The Evergreen Institute and president of Sustainable Systems Design. Contact him by visitinghis websiteor finding him onGoogle+.
