Monday, July 21, 2014

Solar Power

Now that we are settled in our new house, we are starting to make long-term investments and upgrades that we expect to serve us well into the future.

A recent example is the installation of a PV (solar) array on our roof.  We expect this will provide us with most if not all of our energy needs for years to come.  However it required a significant initial cash expenditure, so we will not realize the savings from this investment for a number of years.

A few days ago we received our first electricity bill since having the new PV system installed.  It was the lowest electricity bill we've ever seen.  We have a grid-tied system with a net meter, which means that when we are producing more electricity that we are able to consume, the electricity feeds into the grid and our electricity meter spins backwards.  When we need to draw from the grid (for example at night or when it is really cloudy outside) the meter runs forward.  Therefore we are not an "off grid" system, so we still have to pay a minimum monthly bill to our electric utility company so that we can use the grid as a storage facility for our surplus electricity.  (To truly go off-grid, we would have needed to buy an expensive bank of batteries which need replacing every 8-10 years and which are tricky to dispose properly.)

As it stands now, we will see our original purchase price returned to us in the form of electricity consumption savings over many years.  However I expect to accelerate the payback by making another change to our house.  We currently have a radiant heating system which is fueled by an oil boiler.  I would like to swap this out in favor of electric equipment which could heat the water to be circulated in the radiant system.  (We also have a domestic hot water supply which is heated by oil as well.)  Once this is done, we can eliminate purchases of heating oil in the future.  Of course cost of the work on the heating equipment will need to be added to the price of the PV equipment to get the most accurate idea of when the return on investment will occur.

In addition to eliminating the future requirement to pay for energy, this investment serves a secondary function as a form of insurance against rising prices.  The PV equipment installation was a one-time known cost, but the future cost of electricity or oil is an unknown.  Although I am not an expert in forecasting energy prices, I can see a steady upward trend in both the cost of electricity and oil over he recent past.  It is nice knowing that some variability has been removed from our future expenses.  As long as the sun continues to shine, we have an energy source for the next 25-30 years (expected life of the PV equipment).