Green energy has moved to the forefront of the national conversation on energy production even as oil prices sit near decade lows. The simple fact that solar power and wind power now command so much attention speaks to how the country's views on energy have changed. But now some people are going one step further and actually looking to install enough solar panels on their homes to become energy positive - that is to generate more energy than they actually consume. Britain's Guardian newspaper ran a recent story about this , but that story skipped over a few obvious issues. Issues that became clear to me after I recently talked to a solar company about making my home energy producing.
Producing more energy than a house consumes is very easy for some homes and essentially impossible for others. Most obviously, people in climates without a lot of sunlight will have a much more difficult time producing energy than people in sunnier climates. Even forgetting about that fact, the direction a house is facing, trees in the area, and angle of the roofline all dramatically impact the level of solar production that can be expected from a house. Related: Saudi Price War Strategy May Blow Up In Their Face
Energy producing homes rely on creating large amounts of solar energy, while consuming relatively little energy. The consumption side of that equation is fairly straightforward and uncontroversial - having thick insulation and energy saving light bulbs are not generally a major inconvenience for most people. Unfortunately, producing solar energy requires a trade-off. For example, an individual could always produce more solar power by filling not only their roof with solar panels, but also their front yard, yet very few people want to give up their lawn for solar arrays. Related: Do Biofuels Still Have A Place In The Global Energy Mix?
In my personal experience, I talked to a major national solar company about putting solar panels on the roof of my house after getting a letter telling me I was a prime candidate for energy production. The standard offer from solar companies today is as follows: the company agrees to install solar panels at no cost to the homeowner. In exchange, the homeowner agrees to buy energy from the solar company for a long period of time - frequently twenty years. This energy bought from the company is actually produced on the owners own roof, and the homeowner gets the energy at a discounted rate. In my case, my utility company was charging $0.25 per kwh (peak) for electricity, while the solar company would charge me $0.13 per kwh. This equates to savings of about $1,000 a year based on the kwh usage of the average US household. Related: These Major Players Could Make Or Break The EV Market
In my case, the direction of my house, and the angle of the roof meant that I would actually be able to generate about $50 a month in excess energy which I could automatically sell back to my local electricity company. There was a catch though - of my $0.25 rate for electricity, $0.11 are "distribution" costs while $0.14 are generation costs. Hence, I was not going to be able to earn the same amount that I had to pay for electricity. Solar companies are able to sell solar power at low rates and fund the solar panels at no cost to the consumer because of the increased popularity of solar bonds which gives the solar company a low cost financing source.
In my personal case, while I could have had an energy producing home, doing so would have required putting solar panels on the front of the roof marring the attractiveness of the property. It also would have meant that anyone who wanted to buy the house from me in the future would have had to sign on to buy energy from the solar company as well. In light of these intangible costs, I ultimately chose not to install solar panels. This perhaps highlights the limitations of energy producing houses - they require a life-long commitment to a very special kind of lifestyle by either the present homeowner or future occupants of the house. In light of that, I'm skeptical about energy producing houses becoming a widespread phenomenon.
By Michael McDonald of Oilprice.com
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Michael is an assistant professor of finance and a frequent consultant to companies regarding capital structure decisions and investments. He holds a PhD in finance… More
Comments
For me solar is a far better investment than CD's or bonds and far safer than stocks. It is a great way to reduce expenses for retirement.
Imagine powering your house AND 3 tanks of "fuel" for your car for about $15/month.
Also if you were to produce $50 more electricity than you use, the system is way to big-It sounds like you had an inexperienced solar consultation
The goal is to design a system that covers all of your on peak usage while buying the offpeak from your utility at a low rate
You would pay for the system in 7-10 years with money you are already spending with your utility company
Please do a little more research on matters that you obviously have little or no understanding on-It is rookie journalists like you who give solar a bad name
Let me join the discussion from The Netherlands; a (often cloudy) country with a fast growing number of private solar system owners. Only few of us have the kind of lease-contracts you looked into. It's far more attractive to invest in your own solar panels. It pays back in 6 or 7 years; also thanks to a milder tax on sutainable energy. But even without that, current systems would pay back in 8 years at the most - even in our part of the world with low sun in winter - if any at all. It also improves the value of your house, by the way..
As for aesthetic decisions, that's a personal choice. And if you're wealthy, saving a few thousand a year on utility costs probably won't matter to you. But for most people, that's real money. At that point, solar panels start looking real pretty, aesthetically and otherwise.
As for your assertion that solar energy "requires a life-long commitment to a very special kind of lifestyle" .... I really haven't the slightest idea what you're talking about. Once the panels are installed, they do their work without any homeowner maintenance or fuss. Solar is easy-peasy, and in my experience (4 years with a 12kw rooftoop system) there was no change to our "lifestyle." Really, have no clue what you're talking about, or how you reached such an odd conclusion.
In Southern California it is now possible to get a $0 down loan and get a rate of only 7.8 cents per kilowatt hour. And that price is for an owned system and is NOT available from any solar leasing company.
Sick and tired of paying hydro bills