Solar Panels on the Chapman Home

She was thrilled to find Greg Rothers at Rothers Design/Build .  Greg had experience with straw bale construction and had previously partnered with The Energy Savings Store on solar projects.  

Together, we built radiant-heated floors using solar energy and a solar hot water system. The water piped through the concrete floors is heated by 4 Heliodyne solar panel collectors mounted on the south wall of a detached garage.  The pre-heated water is stored in two tanks. Janet also uses it  for normal domestic hot water purposes. 

“We appreciate Greg partnering with us early in the process,” says Bob Solger, Proprietor of The Energy Savings Store (TESS).  “Many clients considering building a green home often come to us first and Greg is one of the builders we recommend because of our collaborative relationship.” 

Jim Kostucik, with Redstone Homes, is another builder assisted by TESS when a client was interested in using thin-film solar panels on a metal roof in Stillwell, KS.  “Involving us early in the design process can avoid problems and delays later on,” says Bob.  “Our engineering team and experience  can help builders wade through the enormous amount of information about wind turbines (windmills) and solar panels.”

Solar and wind systems provide significant returns when rising rates are taken into consideration

While many people love the idea of using clean, renewable energy from the sun and wind, they find the investment significant enough to think twice about the purchase.  The installed cost of a mid-sized wind turbine or solar photovoltaic (PV) system is about $20,000, and does not provide the same visibility or utility as a new kitchen.  However, while a new kitchen provides a great new space to cook and congregate, and will bring back nearly every dollar invested if the house is sold soon after, it loses its value over time. The renewable energy systems, on the other hand, become cash cows that actually increase in value as energy prices rise.

A simple payback will show you that the money you initially invest in the system is offset by the value of the energy produced over time.  This becomes a little tricky, because we know that energy prices will rise, but can't predict actual rate increases without a crystal ball. Historical rate increases over the past 10 years or so have been about 4.5% per year, although this varies widely across the country.  Over the next 20 years, we expect rates to increase 6-9 percent per year, given supply pressures on fossil fuels and imminent carbon taxes.  Just like the miracle of compounding interest, the compounding effect of rising electric rates results in the system returning 1.5 to 3 times its initial cost.

While the life expectancy of a solar PV system is generally 40-50 years, we typically look at 30-years of operation to calculate expected returns on both solar and wind.  (Wind turbines require maintenance, and the turbine itself can be replaced with a more efficient unit at a fraction of the cost of the original installation.)  The chart below shows the value of the electricity produced over a thirty year period.

Estimated value of power produced by 2.4kW solar array*

*Assumes $0.09 p/kWh with 7.5% annual inflation on electric rates for 2.4kW solar PV system

Our February newsletter summarized the highlights of the American Recovery and Reinvestment Act of 2009.  With this legislation, the 30 percent tax credit for commercial and residential renewable energy investments was extended through 2016, and the $2000 cap was eliminated.  This tax credit effectively creates a 30% discount on all solar and wind installations, reducing your investment accordingly.  (For commercial projects, you can apply for a grant up front in lieu of the tax credit.)  Additionally, the state of Illinois offers a 30% state tax credit for solar, and is considering extending this to wind power also.  Historic tax credits of up to 25% are also widely available, depending on the area.

Finally, the recently passed Proposition C in Missouri will require that utilities produce 15% of their total demand with renewable energy.  The Public Service Commission is currently finalizing the rules, but at this point it is agreed that the investor-owned utilities (including AmerenUE, KCP&L, and possibly Empire)will  provide a taxable rebate of $2 per installed watt (up to 25kW).  In addition, they may buy Renewable Energy Credits (RECs) based on the amount of electricity produced by your system.  It is anticipated that the value of this taxable income would be similar to the rebate ($1.80-$2.20 p/watt) but this will likely be paid out over time as the energy is produced.

So the 2.4kW system described above might look like this:

* Actual figures are contingent upon the finalization of rules. Prop C rebates will go into effect January 1, 2010.

Using the assumptions above, the system will have produced a total of $4,400 in electricity in its 12th year of service, thus paying for itself.  However, in the 18 years after it's paid off, it will produce an additional $23,500 worth of power, yielding an internal rate of return of 11.7%.  Businesses will achieve even greater returns by depreciating equipment.

In spite of this return on the investment, for some people, this long of a payback is troubling because they may not intend to live in the house that long. The truth is, that, just like the kitchen, an investment in a solar or wind energy system will add to the value of the home, with a higher return than a kitchen or bathroom renovation.

While the return on your investment may not match some of the historic returns of the market, you can be sure that it will be much less volatile.  Probably more important than anything, you must place intrinsic value on producing your own clean, renewable energy.   As one of our customers put it, "No one ever expects to catch enough fish to pay for their new bass boat!"

Farm house has solar PV on the upper roof, and solar thermal (for water heating) on the lower roof

The Green Dirt Farm, located just north of Kansas City in Weston, Missouri, is a small community-based farm dedicated to producing healthy food in a sustainable environment.  The entire farm complex was designed to be a net-zero energy farmstead, producing 100 percent of the energy for the operation using a combination of solar and wind.  Chris DeVolder, the home's architect, calls it "the greenest house in the Midwest, possibly in the country."

From the ground up, this farm was built with sustainability in mind.  Most of the materials used in the construction were salvaged from local demolished buildings (including a reclaimed church railing as the rail in the loft of the barn!)  The designers largely limited themselves to these materials, and any new materials used in the home were considered environmentally-friendly.   It was a true collaboration between owner, architect and builder.

The house uses only 25 percent of energy required in a typical home of its size, and uses no fossil fuels to heat or cool. This is accomplished in part using a passive solar design that shades the home from the sun in the summer but absorbs the solar heat in the winter.  Complementing this is a geothermal heat pump, with radiant heating system in the floor.  In addition, the home uses a small word-burning masonry heater as a back-up heating source, and doubles as a Swedish oven for bread-baking.

2.4kW Skystream wind turbine provides half of the power used on the farm

The Energy Savings Store was selected to design, engineer and install the renewable energy systems used on the Green Dirt Farm in 2005.  The electricity used in the home and barn comes from a 2.4kW Skystream wind turbine, perched atop a 70' tower.  Complementing this is a 2.4kW Uni-Solar PV laminate system on the home's metal roof.  These two energy sources, coupled with the efficiencies designed into the home, enable the owners to live and operate their farm with a "net-zero" energy requirement.  The home is actually connected to the utility grid, so that in the event that more power is consumed than produced at any given point in time, the system can draw additional power from the grid.  On the other hand, when more power is being produced than consumed, the utility meter spins backward, pushing the excess electricity out onto the grid.  The home also contains a battery backup system, so that in the event of power outages, they can run safely on their own backup power.

Solar thermal energy is also used to heat the potable water in the home.  A 5kW SunEarth glazed panel solar water heating system was installed by The Energy Savings Store to heat water in a 120 gallon tank, enabling the owners to use very little energy to heat water used both personally and in the farm operations.  Solar water heating systems typically reduce energy use by up to 80 percent.

Finally, solar energy is used for space heating in another small building on the farm.  Several years after the home was built, a small cabin was built on the property to house the farm's manager, and the owners came back to The Energy Savings Store for guidance.   The house was designed with a south-facing wall, on which a 1.5kW SolarSheat solar air heating system was installed.  This glazed panel system is self-powered, using a small photovoltaic (PV) panel to power a fan that draws air from the bottom of a room up through a heated-duct and back out the top into the room.  The panels are ideal for a south-facing wall on a great room, but can be installed on a south-facing roof as well.

The Green Dirt Farm owner's commitment to healthy, organic food and a sustainable living gives us a great model for home development.  Everyone involved in the project shared and realized the same vision, and now the path has been cleared for others who wish to create a sustainable, environmentally friendly living space.