Many people are under the impression that solar electric power is not cost effective compared to grid power. However that is not entirely correct. News articles indicate that photovoltaics are already cost effective in Hawaii and some parts of California. Photovoltaics are also cheaper than electric grid power if you wish to power a remote home that is more than 2 miles from the nearest power line. That is because the electric company will charge at least $20,000 to extend the power lines two miles to a single home. Diesel electric generators (and other fossil fuel burning generators) have relatively low up front costs, but over a 30 year period they will cost a lot to maintain and fuel.
Photovoltaics can also be cost competitive if your home uses very little electrical energy. For example, in Portland, Oregon the electricity is provided by Portland General Electric (PGE). Do not this confuse this company with Pacific Gas & Electric (PG&E). In 2002 PGE rates were dramatically raised. While the rates are still much lower than those in California, the minimum monthly fee was raised to $10 for residential customers. PGE says this fee is for the cost of the transmission lines, electric meter, and hiring someone to go to the home to read the meter. This fee must be paid EVEN IF NO ELECTRICTY WAS USED DURING THE MONTH. This amounts to $120/year and $3,600 total for 30 years. Solar panels can be obtained for as low as $3.75/watt from my website at http://www.renewableelectricity.com/solar.htm.
If the household went off the grid and ceased being an electric utility customer, they would no longer be subject to that fee. The $3,600 would thus be available to buy a 900 watt solar electric panel array.
The minimum/base fee (also known as Basic Charge) charged by your utility may even be higher. Check the "details" section of your electric bill. That section might be hard to find on your bill, and it might be on the back page.
PGE also charges 6.5 cents/KWh for residential electric usage (Technically 6.359 cents/KWh for usage below 225 KWh/month and 7.359 cents/KWh for usage above 225 KWh/month. Rates for power generated from clean renewable energy cost nearly 1 cent/KWh more.). If a home used 3.6 KWh/day this would equal $2,564.06 total over 30 years (including leap years). That $2,564.06 could be applied towards the cost of the photovoltaic racks, wiring, meters, controllers, batteries, and installation labor. At 4.5 KWh/day the savings in electric utility usage costs = $3,205.07!
But the cost benefit analysis gets even better! That is because of three reasons.
- 1) Electric rates are likely to rise over the next 30 years, both the monthly base fee and the usage rate fee. Whereas the photovoltaic equipment would already be paid for and the sunshine is free. There would however be occasional battery bank replacements.
- 2) Many states offer income tax credits for renewable energy systems. For example, my state of Oregon offers an income tax credit of $3 per peak Watt the system produces, up to $1,500.
- 3) The US federal government's proposed energy bill includes federal income tax credits for solar electric power installed on homes.
For simplicity, a few factors were left out of the above calculations. For example solar panels slowly loose some power output over time. For example Shell Solar (formerly Siemens Solar) guarantees that their monocrystalline silcon solar panels will produce at least 80 percent of rated power after 25 years. The good news is that even many panels installed in the 1970's are still producing power, though at a somewhat lower output.
Another factor left out of the calculations is the time value of money, such as present value and the Return on Investment. Also in some areas, such as the Pacific Northwest, the number of sunny days during fall and winter is much less than during spring and summer.
Gavin G. Young
Renewable Electricity Solutions
Renewable Electricity Solutions was founded by Gavin G. Young to provide 21st century energy alternatives to meet the growing need for environmentally sound energy sources. The business accomplishes this by selling photovoltaic (solar electric power) modules/panels, wind generators, micro-hydro generators, deep cycle batteries, charge controllers, DC to AC power inverters, energy efficient appliances, energy efficient LED lighting, electric scooters, and much more. In addition, it provides information on renewable energy (solar hot water, solar air heating, solar cooking, solar electric power, wind power, micro-hydro power, fuel cells, etc.), energy conservation, electric automobiles, and recycling.