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  • Power Down

    Posted by James R. Rummel on June 23rd, 2009 (All posts by )

    Glenn links to an article at Extreme Tech by author Loyd Case, where the author discusses the results from a home solar power system that was installed a year ago. He is generally pleased with it, since now he only pays for about 1/3 of the electricity that he used to.

    Fine and dandy and good for him, but I was taken aback when I got to the part where he reveals just what his yearly cost happens to be. Now that he has the solar power system installed, it is down to $1,460.73. And he thinks that is great news!

    “That’s my power bill for twelve months.”

    So what was it before the fancy new sun-stealing gear was installed?

    “…our annual power cost for twelve months prior to installing solar power was $4,430.”

    You know, I pay less than $1,400 a year for both gas and electric combined. And I don’t have a solar power system installed.

    There are differences in our lifestyles which would naturally drive Mr. Case’s consumption up, though. I live alone, while he has a wife and children all under one roof. I have one PC which I use for about 2 hours a day, while he and his wife both use their computers to work out of their home. My house is a modest cape cod style with a basement, while I bet he has square feet to spare.

    But I do live in a more northern climate than Mr. Case, and it can get mighty chilly hereabouts when compared to San Francisco. In fact, if the average temperatures for San Fran as listed in that last chart are correct, I doubt I would run either my furnace or air conditioning more than 60 days out of the year if I lived there. Here in Columbus, there are only about 60 days out of the year when I don’t have either the heat or the cooling switched on.

    And, of course, are there more sunny days in San Francisco than Columbus? According to this chart, there are an average of 105 cloudy days in San Francisco as compared to 190 in Columbus, Ohio. Almost twice the number. Not really shocking.

    All of those factors are significant, but they don’t tell the whole story. Is there a big difference in energy costs between the places we live?

    Actually, there are. According to this chart from the Energy Information Administration, a kilowatthour sells for $0.1031 in Ohio, while customers are charged an average of $0.1438 in California.

    That is just the average for the state, though. It wouldn’t surprise me if the people living in and around San Francisco were paying a lot higher than the state average.

    Bottom line is that the solar energy system Mr. Case installed reduces the power he draws from the grid down to about the same level I use. This is pretty impressive, but it would certainly be more impressive if he had to deal with the same extremes in temperature that I experience.

    The system Mr. Case bought went for $38,000. Considering his savings, it will be more than 12 years before it pays for itself. At least it will, as long as it continues to function without any costly repairs or replacement parts.

    I think Mr. Case’s system is a worthwhile home improvement addition, but only for homes in his own unique circumstances. The fact that he enjoys a climate that is mild compared to the one I experience, he enjoys a significantly greater number of sunny days, and that his energy costs are about 40% greater than mine, means that there aren’t too many people around my neighborhood who should bother paying the big bucks for a similar system.

    (Cross posted at Hell in a Handbasket.)

     

    10 Responses to “Power Down”

    1. Robert Schwartz Says:

      Jim: I live in your area, and I have a rambling old house with no insulation at all on the first floor, and I don’t hit that kind of electric usage (gas is another story). That plus the 190 cloudy days a year make a solar panel a very doubtful investment for me.

      Incidentally, if you finance $38,000 for 15 years at 6%, it will cost you $320.67/mo. or $3,848/yr. That plus the $1,460.73 for power is $5308/yr or more than he was spending before.

    2. Otto Maddox Says:

      So he spends a ridiculous amount of money on energy in a VERY mild climate zone. He gets it all back with his claim of increased moral authority since he’s saving the planet and you’re not.

    3. Lee Valentine Says:

      Mr. Case does not mention the amount of state financed subsidy. His cost of $38,000 is less than the unsubsidized cost of the equipment. Without the government subsidy, his financed cost would
      be even higher than Robert Schwartz calculated. Ground based solar appears to be a wealth destroyer today.

    4. Shannon Love Says:

      I think the freakishly mild and stable climate of costal California seriously warps our debates on energy and transportation.

      Things that work great in that mild climate fail miserably in most of the rest of the country. An open cable car is a joy to ride in San Francisco but would be a hellish experience in Texas summer with the temp over 100F, or during a thunderstorm, ice storm or, heck, let’s toss in a hurricane. Ditto for bicycles, small cars and even busses and light rail.

      Yet so much of our entertainment and media is based in costal California that we are bombarded with messages that assume that if something works in California, it will work anywhere. Unfortunately, only the converse is true. I saw this effect first hand back in the 90’s when a strong El Nino caused a severe drought California. That same weather pattern caused Austin to experience 26 straight days of rain with severe flooding. Yet our local paper ran syndicated news stories on how to save water featuring interviewees from California!

    5. kurt9 Says:

      I saw this effect first hand back in the 90’s when a strong El Nino caused a severe drought California. That same weather pattern caused Austin to experience 26 straight days of rain with severe flooding. Yet our local paper ran syndicated news stories on how to save water featuring interviewees from California!

      You think this might be one reason for the decline of newspapers.

    6. Michael Says:

      Loyd is having a bad week. Don’t add to it.

    7. Micha Elyi Says:

      Riffing on Shannon Love’s mention of how costal (great pun!) California warps national energy policy debates…

      Hey, that server farm (or another kind of indoor farm with halide gro-lamps) takes a lot of juice to run. Doesn’t everyone see that?

      More seriously, Southern Californians with their huge population and amazing provincialism (they consider California to be L.A. county plus “outlying areas”) screws up California energy and water policies. For example, the legislature just yawns when multi-year droughts strike north of the Tehachapi mountains but when rationing is even contemplated in L.A. or Santa Monica then it requires immediate legislative action and a declaration of emergency by the Governor.

    8. Shannon Love Says:

      Micha Elyi,

      Riffing on Shannon Love’s mention of how costal (great pun!) California warps national energy policy debates…

      Yes, right, a pun… quite definitely a clever pun and not a careless typo!

    9. Marty Says:

      Robert Schwartz forgets to add back in the residual value of the asset at the end of the 15 years, unless he assumes it is $-0-. Would make the investment look a bit better.

      oth, he also doesn’t account for maintenance and repairs and possible degradation in efficiency over the 15 years, all of which would pull in teh other direction.

      I suspect the biggets issue is the one raised by Lee valentine—what is the economic cost of the system, including all subsidies?

    10. Paul Milenkovic Says:

      One thing missing from this discussion is the consumer electric rate in California.

      From http://www.pge.com/tariffs/tm2/pdf/ELEC_SCHEDS_E-1.pdf

      Total Energy Rates ($ per kWh)
      Baseline Usage $0.11531 (R)
      101% – 130% of Baseline $0.13109 (R)
      131% – 200% of Baseline $0.25974 (I)
      201% – 300% of Baseline $0.37866 (I)
      Over 300% of Baseline $0.44098 (I)

      So the Baseline usage of 11.5 cents/kWh is not too different from everywhere else in the country, but as you see, there is a steeply increasing rate as you use more than the baseline amount of kWh.

      Elsewhere on the Pacific Gas and Electric website I have seen maps of the Bay Area and beyond in terms of what the Baseline level is. People closer to the ocean get a low baseline level; the further inland and more you need airconditioning, the greater the baseline allowance.

      The impression I have about the baseline level, however, is that a homeowner has to be pretty parsimonious about their use of electricity and sparing with A/C to come in under that amount. As you see, as you exceed the baseline, your marginal rate for electricity skyrockets. Getting to 300% of baseline is not hard to do given most people are not like the Apollo 13 ground crew, trying to count every “ampere-hour on the spacecraft” to get them back alive before the batteries run down.

      Think of it. 44 cents a kWh — any of you outside of California pay anything like that?

      I think what California has done is that because they don’t want any power plants and they want to get any marginal power (in the economic demand curve sense) from renewables, is that they have priced power in the way they price gasoline in Europe — steeply to induce people to use less of it or build their own solar panels.

      What they have done is create an incentive system where you marginal kWh costs 44 cents, which is about the cost to generate electricity from rooftop solar panels, which is what our article writer is finding economic to do.

      For my money, I think that rooftop solar panels are a brute force approach to this homeowners problem. There is this new thing where you can paint the roof with heat-reflecting white paint or roofing tiles to cut down on air conditioning. You could purchase a high efficiency air conditioner. You could go with all fluorescent lighting. You could do the Apollo 13 thing of relentlessly tracking where all your electricity is going. All of this could be done for much less than $38,000. And the tiered electric rates are meant to encourage people to do all of this.

      But something is goofy with the way they are doing business in California, that through electric utility regulation, they have created the economic incentive for homeowners to put up rooftop solar panels to compete with 44 cents/marginal kWh electricity when no one else in the country is paying those rates.