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Residential Solar and Wind Systems: What are the Energy Costs?

Homeowners considering a solar energy or residential wind turbine system may quickly face sticker shock when they find out how much these installations will cost. Wind turbine systems can run as high as $65,000 installed, while the average cost nationally for a professionally installed solar panel system is about $8 to $9 per watt. That means a 2 kilowatt (kW) grid-tied system with no battery back-up can run to $16,000 and a similar 5 kW system could cost upwards of $40,000. Deep cycle back-up batteries for both wind and solar can add on 20 to 30 percent more. And while you might be able to save around $2 per watt by doing the work yourself, many energy efficiency programs have certification requirements.

However, don't give up hope if you are truly committed to powering your house with solar and wind. Read on to learn about what factors to you should keep in mind when considering a solar and wind home power plant, and how you can bring the costs down to a more attainable level.

Solar Energy Can Be Affordable

Residential Solar and Wind Systems: What are the Energy Costs?

Because both residential and commercial demand for solar and wind energy is increasing, the technology is improving, there are more manufacturers and the price is dropping. In the case of solar energy, the cost of an average solar panel in 1980 was $21 per watt (eg: a 15-watt panel would cost $315.00). Today, the average cost is about $1.03 per watt, a 90 percent cost reduction in just 25 years. Power output capacities have also improved. In 1980, a typical solar panel might put out 22 watts. Now, 100-watt panels are common, if not plentiful, offering a 450 percent increase in output. What's more, there are also new enhancements available through tracking (a motorized mount tracks the sun through the day to improve efficiency) and concentrating sunlight to extract up to 75 percent of the sun's rays and increase efficiency by 1000 times over regular flat panels.

Recent cost reductions notwithstanding, the reason residential renewable energy systems are expensive is simple: you are investing in a home-sized power plant. Like any large-scale power plant, that's a long-term investment made over the course of 15 to 25 years. And, like any long-term investment, you should first take a few minutes to consider your needs and goals:

  • How much electricity do you use each day?
  • In a rural setting, will it cost more to bring poles and wires to your home?
  • Is your goal to have self-sufficiency while retaining a grid-tie?
  • Is your goal to get your home off the grid?

Figuring Your Usage: How Much Solar or Wind Power Do You Need?

Figuring your usage can be tricky, but important when deciding how much solar or wind power you'll need. First, you need to understand the difference between watts and watt-hours. The power (watts) required to run things in your house is not measured the same way as your utility bills show (watt-hours). A 50-watt light bulb burns 50 watts of power each time it's turned on. If you have a 30-watt battery, the 50-watt bulb won't light all the way and will quickly run down the battery.

Watt-hours, meanwhile, are the units of measurement of energy used over time. So, in one hour the 50-watt light bulb will consume 50-watt hours, or .05 kilowatt-hours (kWh).

The important thing to remember is that watts and watt-hours are NOT interchangeable in making your calculations. That being said, the way to determine your usage is to review your utility bills. For example, let's say you use an average of 1000 kWh per month. That divides out to 33.33 kWh per day.

The next step is to find out what electrical appliances and devices you are using, how many watts they consume and how long you use them. To compute kWh of a device or appliance, multiply the watts times the hours it runs during the day. A 500-watt chest freezer running for ten hours will use five kWh of energy.

How Much Sunlight Can Your Capture?

The next step to look up is the amount of direct sunshine your location receives, otherwise known as "insolation." Insolation is controlled by the angle of the sun, the weather, atmosphere, elevation and location on the globe. The further north or south from the equator you go, the fewer hours of insolation.

Now we can find how many panels you may need by calculating the system efficiency. Assume your insolation hours equal 4.5. The system efficiency is a product of the efficiency ratings of the current handling hardware: inverter (to convert 12 volts DC to 120 volts AC and smooth it into a nice, clean 60-hertz cycle), a battery charge controller, and the deep cycle batteries. Inverters typically run about 95 percent efficiency, charge controllers at 98 percent and batteries at 80 percent.

So, if we multiply .95 by .98 by .80, we get a system efficiency of .74 or 74 percent. That means with this equipment, 100-watt solar panels actually produce 74 watts. If our system was 99 percent efficient, we would only need 74 panels. Since our system is only 74 percent efficient, we need 99 panels to produce the 33 kWh per day that our example home uses.

Either way, that's a very large number of panels if you want to generate enough solar power to meet your consumption, and a lot of money you'll need to spend to fulfill your electrical requirements.

Reduce Your Solar Costs with a Lighter Electrical Load

The easiest thing to do is find ways to cut your electrical use by eliminating inefficient devices. In many parts of the country, the biggest home electricity user is air conditioning. A 30-ton central air conditioning system with a SEER rating of 13 can use 2.3 kWh. Over ten hours, that adds up to 23 kWh - two thirds of our entire electrical load.

There are different energy-efficient ways of cooling your home. Swamp coolers, for example, work through evaporation though they are most efficient in dry environments. Absorption chillers are common alternatives. They heat refrigerant at low pressure until it evaporates, then it loses its heat through condensing back into a fluid at high pressure. The heat source can be natural gas, propane, kerosene or solar heat. Because there is no compressor to supply pressure, the system uses little energy.

The second biggest user is the electric hot water heater, which accounts for 17 percent of annual energy costs. A 40-gallon heater uses an average of 8 kwh/day. There are several energy efficient alternatives: change to a heat on demand system, use natural gas or propane to heat your water or consider a solar water heating system in addition to your solar panels. Some solar water heating systems are nothing more than an old water heater tank painted flat black and housed in an insulated box with a glass window facing the sun.

When it's time to replace your home equipment, consider switching to Energy Star rated appliances and LED light bulbs. Also, think about how well insulated and weather sealed your home is and whether it needs improving. The more energy you can live without means the less energy-generating capacity you will need to install.

Let's say that we've installed more efficient appliances and lights, while replacing the water heater and air conditioner systems with a solar absorption chilling system that heats water also. That brings down the usage from 33 kWh/day to 5 kWh/day. That would mean we need just 16 panels, which is much more manageable.

Figuring the Cost of a Residential Wind Turbine

Home wind energy has come a long way from the steel-bladed fan-type windmill introduced to American farms in the 1870s. Small wind turbines that generate electricity are available in a range of sizes ("nameplate capacity") from roof or chimney-mounted 1-kilowatt (up to $7,000 installed) all the way up to 100-kilowatt turbines mounted on their own tower (about $80,000 installed). Many turbines below 1.2 kilowatts are available in kits for the do-it-yourself-homeowner from a home center.

However, while the power output from wind turbines might look appealing, getting the most watts for the buck is more complicated than solar power. While the sun shines every day even when it's cloudy, the wind is far more fickle. Some parts of the country are also windier than others. Consequently, a consumer needs to do far more research to determine how much wind might really be available for them to harness.

Wind speed also varies locally at different elevations. While there might seem to be a light breeze at street level, it could be a dead calm at 30 feet up, or blustery at 100 feet. Hills, river valleys, trees, and buildings also have a big effect on wind speed especially when coupled with urban settings. Local building codes and other rules must also be considered.

Let's say you want to add a pole-mounted residential wind turbine to your system that costs $1800. A 30-foot pole with guy wires and a few bags of concrete costs $500, for a total of $2300. Factor in the Federal Energy Tax credit and the price drops to $1610.

Let's also say you've done your homework on local average yearly wind speed. The new wind turbine will generate 3.4 kWh per day in an average 12 mph wind zone (Class 4). However, the local average wind speed is only about 10 mph (Class 2). So we now calculate that with these conditions, your turbine will produce an average of 2.8 kWh per day (about the equivalent of 8 solar panels).

One way to overcome the disadvantages of wind generation is by combining it together with solar to create an integrated renewable system that becomes a reliable source of home electrical energy 24 hours a day, generating an average of 5 kWh/day. In some parts of the country where net metering is available, a homeowner can even sell their excess generated power to the utility company.

What About Hidden Costs?

The good news is that once your renewable systems are installed, maintenance is minimal for both solar panels and wind turbines. To ensure that solar panels get the most power, they might periodically need to have dust and leaves hosed off. The panels do wear out over time, losing on average one watt of generating capability over 20 years. Wind turbines usually only have two moving parts that are exposed to the weather. Blades are typically bolted onto the hub which is protected by a nose cone. There is also the pivot that allows the wind turbine to swivel into the wind. Both of these can easily be replaced with parts from the manufacturer.

Something Smaller: The Grid-Tied System

Just because you're producing your own energy doesn't mean you need to go off the electric grid entirely. In fact, a grid-tied solar/wind system retains a connection to the utility grid so you will still be a utility customer but can offset the energy you use from the utility by making your own. Say you buy a solar power kit that will generate about 1,230 watts for home use for around $7,000 (10 panels, power cleaner, and inverter). Deep cycle storage batteries can also be added to a system; they generally cost about $250 each and last ten years.

On average, these panels alone would make about 4 kWh for daily use and knock off 120 kWh from the monthly bill for a savings of up to 12 percent for a typical 1000 kWh bill of $119 (at 11.9 cents/kWh). That means a monthly savings of about $14.24 or $171.36 per year.

Assuming prices and usage remained frozen, the system would pay for itself in 17 years, or 24 years without the Federal Tax Credit. In the real world, your numbers may turn out differently as energy prices spike and the price paid for each kWh will vary during the year, trending higher over time. With this in mind, the return on a solar energy investment might in fact only take 15 years or even less. Plus, consider that 12 percent energy savings is competitive with the return you would get from putting the initial $7,000 in a bank.

Another way a solar energy investment pays for itself is by increasing your home's value. Remember, too, that as solar panel technology improves, the homeowner can swap out old panels for newer, more efficient ones that cost less. These are just bolted onto the rack and plugged into the circuit. Over time, you can save even more money on your bill, and even sell energy to the electric company by expanding and upgrading both your panels and batteries.

Not all homes and budgets may be cut out right now for solar panels or wind turbines, and the variables in play when calculating solar vs. wind cost per watt can have greater or lesser roles depending on numerous factors. The National Renewable Energy website can provide valuable information to help determine the suitability of your location for wind or solar, or both. You will need to make a significant investment under almost any circumstances, but if local conditions and your financial situation line up you could discover that renewable energy generation is the right step for your household.

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