Energy Conservation and Renewable Energy

Windmill renewable enegry

Energy Conservation and Renewable Energy as Sustainable Development

Sustainable development meets the needs of the present

without compromising the ability of future generations

to meet their own needs.

       — United Nations Brundtland Commission, 1983

Sustainable development is particularly demanding, as it requires predictably sound economics achieved from effective products and services, which employ low risk technology and proven skills.  When engaged to answer sustainable energy needs, the outcome is … better energy.  Performance-based economics does not stem from ANY political interpretation of fact.

Why an investment in energy conservation and renewable energy is …

JUST AS SAFE AS BUYING I-BONDS

Ref: PBS Journalist Paul Solomon interviewed Hilton Dier on “Making Sense.” Read full article

For convenience in summarizing the risks and rewards for an investment in energy conservation and renewable energy installation, the following tables list the content of the PBS “Making Sense” article.

Table 1  Investment Comparison Profile, July 2013

Item Criteria

Investment

I Savings Bond Energy Conservation Remodel;Renewable Energy Installation
1 Investor Anyone with a SSN Home owner / Business owner
2 Term of Investment Up to 30 years “Forever”[Lifetime of Property][Lifetime of Solar Panels = 30yrs]
3 Asset yield Earned interest Savings from unused energy –heating fuel, electricity*
4 Tax Taxable at redemption(deferred) Savings are Tax free
5 Inflation Protection YesInterest linked to Urban CPI Yes – isolation from energy cost inflation
6 Protection of Principal Full faith and credit of USG Installation insured under property insurance policy
7 Investment cap $15k/year per individual Energy needs
8 Annual earnings 2x Urban CPIi.e. 0 – 5.7% over last 14 yrsCurrently 1.18% 6 to 12% for Solar HW6 to 12% for Solar Electric (PV)Plus savings from avoidance of future energy cost inflation, less cost of any borrowed capital
* $100 saved from unavoidable cost (energy bills) is the same as $100 in earnings
NOTE Rates for I Bonds: http://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm#ex

The PBS article examined the cost, performance and investment return for a photovoltaic panel  installation in Vermont, as well as for an installation of domestic solar hot water panels.

Table 2  Earnings from Solar Electric Installation in Vermont – July 2013

Item Description Amount
1 Example PV capacity 7,000 W
2 Installed cost per W $4.25/W
3 Raw cost $29,750
4 30% Federal Tax Credit applied $20,825
5 After Vermont incentive, $0.45/W $17,675 total effective cost
6 Annual production in VT 1,200 kWh per kW of PV capacity
7 Annual production for 7,000 W installed 8,400 kWh / yr
8 Value of production in VT 17c /kWh (same as utility cost/kWh)
9 Value of 8,400 kW annual production $1,428 / yr
10 VT mandates 20c/kWh $1,680 / yr
11 Savings as % of total effective cost $1,680/$17,675 = 9.5%

 

Table 3  Earnings from Solar HW Installation in Vermont – July 2013

Item Description Amount
1 Production from 2-panel installation in VT 15 MBTU/year
2 Production is same as

Propane

#2 Fuel oil

Natural gas

Electricity

240 gal/yr170 gal/yr20 Mcf4,400 kWh/yr
3 Raw cost of Solar HW $10,500
4 After Federal tax credit and VT incentive $6,400 total effective cost
5 Value of panel HW production at 14c/kWh $617
6 Savings as % of total effective cost $617/$6,400 = 9.5%

This performance-based economic analysis has been conducted by Hilton Dier III, an energy conservation and renewable energy consultant from Middlesex, VT.

renewabledesign.com

Although not discussed in the PBS “Making Sense” article, earnings from a typical PV installation in the lower 49 states can be computed, considering median performance taken from the full range of natural solar productivity in all states except Alaska.

Table 4  Earnings from typical PV installation, median productivity in US

Item Description Amount
1 Average household energy need (US) 12,000 kWh per year
2 PV production capacity to match need   7,000 W in Mojave, CA (High solar access)12,000 W in Seattle WA   (Low solar access)
3 Median production capacity, US 9,500 W
4 Raw Cost per W installed $3.00 – $5.00 /W
5 Raw Cost for median capacity $28.5k – $47.5k
6 30% Federal Tax Credit applied $20k – $33k
7 Range of various State PV incentives $0.40/W to $2.50/W
8 Median of State PV incentives $1.50/W
9 Effective cost when reduced for $1.50/W $6k – $19k total effective cost
10 Average electric utility rate in US 10c/kWh (EIA, April 2013)
11 Range of solar production, US 1,000 kWh /kW to 1,700 kWh /kW
12 Median solar production, US 1,350 kWh /kW**
13 Value of 9.5 kW at 1,350 kWh/kW $1,282
14 Savings as % of total effective cost 6.7% to 21%
15 Increased property value at sale ($5/W) $47,500
** In states where production incentives are offered (eg WA with $0.54/kWh) the annual earnings translate much higher

 

Sustainable Development is an option for any business or home owner considering the economic advantages of energy conservation (to achieve energy savings) or renewable solar energy installation (to avoid future inflation in energy costs).

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