To PV, or not to PV, that is the question.

Are you thinking about installing a photovoltaic (PV) system on your house?  Do you think to yourself, “It will be great to have my meter run backwards and have the electric company pay me for a change”?  “And I’ll be doing something to save our environment.”

The statement above that really bothers me is the part about doing something to save our environment.  My problem with it is the number of resources required: you’re going to have to give something up to buy that PV system, and the thing you are giving up could easily do a whole heck of a lot more good for the environment.  

Suppose you buy a PV system for $20,000 (rebates may halve the price of this, but you’ll see that that won’t make much difference in my argument.)  There’s a lot of argument over the precise numbers, but that system will produce 3,000 kWh (price $9/watt installed, 15% capacity factor) to 4,500 kWh a year ($7 per watt, 18% capacity factor.)   For electricity prices at a balmy Hawaiian $.24 per kWh, that system will then pay for itself (before maintenance) in a minimum of 18.5 years, and generate 83 MWh over that time, or around 150 MWh over the life of the system (30 years.)

Before anyone starts arguing about rising energy prices, let’s compare that PV system to something else we can do with the same money, at the same electricity prices. Suppose we take that same $20,000 and invest it in a 1 year CD at 5%.  After a year, we will get $1,000 in interest, which we will use to buy 500 25watt compact fluorescent light bulbs (in bulk) at $2 each.  We give these away to people who are currently using 100w incandescents.  Over the next several years, those CFLs will save a total of 300,000 kWh (8000h bulb life x 75w per hour saved x 500 bulbs). 

After only a year, we still have $20,000 so we can still buy a PV system if we want to (and take advantage of any rebates we missed out on the year before), we have avoided someone using over 300 MWh of electricity, which is about twice as much as the PV system will generate in its rated 30 year life (and don’t forget the cost of maintenance.)  Plus, most of the energy savings from the CFLs will happen over the next 8 years, rather than the 30 years it will take the PV system to generate half as much.  Most importantly, we have our initial investment of $20,000 back after one year, even though we are giving the CFLs away, while it will take over 18 years to get our money back from the PV system. 

 Because I believe in putting my money where my mouth is, anyone who mails me a receipt for the purchase of CFLs, I will PayPal them up to $5 or $2 per bulb, whichever is less (no more than once per person.)  Household LED bulbs also qualify for the same rebate.  I’ve uploaded a form to fill out, and plan to keep track of the number of bulbs, and the Negawatts generated on my website (as soon as my web guys get to it.)   This will be good for up to $1000 of total payments, or until December 31, 2006 (postmark), whichever comes first.  

Please note: I have withdrawn this offer as of 7/16/07. I have given out about $1,500 worth of rebates for over 750 CFLs, saving approximately 44 kWh per day.

For comparison, a PV system to offset the same amount of power on a daily basis would have to be over 7.5 kW, and would cost about $67,500, or 45 times as much (although it would last about 6 times as long as the CFLs, and it might only cost 20 times as much after rebates.)

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8 Comments

  1. rsm said

    The Union of Concerned Scientists says that compact flourescent and fuel-economical transport are the two biggest things you can do to save the planet.

    Your offer is great for putting your money where your mouth is. If you could only get Denver to chip in 10,000 times as much …

  2. tomkonrad said

    A great step in that direction would be to have energy efficiency included in utilities’ planning. California (and a few other states) have taken this step… before a utility considers new fossil generation, it must study the cost impact of energy efficiency measures and renewables. Because energy efficiency is typically much cheaper than any form of new generation (not just PV), it often wins out.

    Unfortunately, when CO passed our Amendment 37, which introduced our Renewable Portfolio standard, we had to drop EE from the proposal to get the necessary support in the CO legislature. I love renewable energy, but EE has to be our priority. To torture a metaphor, when you’re in the global warming hole, the first thing to do is to stop digging, before you start trying to fill it back in with RE.

  3. [...] A few months ago, I wrote a blog comparing the number of negawatts you could produce by giving away Compact fluorescent Light bulbs (CFLs) to the amount of electricity you can produce with a rooftop photovoltaic system.  The CFLs had photovoltaics beat six ways from Sunday, and I concluded that you could do better by putting the money you were considering investing in a PV system in a Bank CD, and using the interest to give away CFLs.  Since I actually believe my own calculations, I set out to do just that. [...]

  4. Alan said

    It’s no secret that the very first thing one should do before installing a PV system is increase energy efficiency throughout the house (or whatever building the PV system is intended to power), and any honest and worthwhile PV installer will suggest exactly that before selling you a system. That includes replacing not just the lights, but the refrigerator, dishwasher, clothes washer and dryer, and just about anything else that uses electricity. It’s almost always cheaper to reduce your load than to increase your PV supply, so these investments immediately pay for themselves — and then some — in savings on the installed cost of the PV system. Of course, the cost of the PV system provides an excellent incentive for people to invest in more expensive high-efficiency compact fluorescents and applicances. The incentive is certainly there for folks relying on grid power, too, but it is smaller and less immediate, so for many it is all but invisible.

    As for your offer to give away compact fluorescents, I love the idea! I’d send you some receipts myself, but I’ve already put CFs everywhere I can and don’t anticipate having to replace any of them for years now….

  5. tomkonrad said

    I’m not actually comparing installing CFLs in your own home to PV on your
    roof… I’m comparing giving away CFLs to putting PV on your roof. It turns
    out, that with the money you could have earned with the money invested in
    the PV system, you can afford to buy CFLs and give them away, and still come
    out ahead financially, even though you gave them away. At the same time,
    you will be offsetting more carbon than would have been the case by
    installing the PV system.

    As for not having receipts to send me, I suggest you buy some CFLs to give
    to a friend or coworker, and send me the receipt. Alternatively, you could
    buy household LEDs to replace some of your high-use CFLs, and the same offer applies. It turns
    out that while LEDs are still more expensive than CFLs on a negawatt saved
    basis (because of their relatively high price,) they’re still a better investment than PV, both in the financial sense, and in the sense of reduced emissions.

    Global warming is a massive problem, and like it or not we all have limited time and money to address it. On of the reasons I do these comparisons is to help people use those limited resources to address the problem as effectively as possible. To fill in the hole we’ve dug ourselves with CO2 emissions, we’ll need all tools available, but we should start with the backhoe of energy efficiency before we get to the shovel of photovoltaics.

  6. nancylaplaca said

    Thanks for the education.

  7. Solar John said

    Tom,

    I’ve switched to CF’s long ago, and am happy to be working on my PV system. I don’t care that I could have better invested my money elsewhere, I enjoy what I do. It was good of you to offer to reimberse people for installing CF’s, but I can’t help but wonder if you’ve actually made good on your promise. Can you let us know please?

    In case anyone is interested, I blog about my RE experiences on:

    http://solarjohn.blogspot.com

    Perhaps by writing about my expereince, I’ve encouraged others to do similar work, and my investment may be more worthwhile than it appears.

    John

  8. tomkonrad said

    John,
    As a matter of fact, I have not yet received a single form asking for a rebate. I have, however, been contacted by several nonprofits who were planning CFL giveaways. In response, I have made donations to the Environmental Educators of North Carolina (this page lists me as a “seed level donor” because of it, Greenlight New Orleans, The Bloomington Unitarian Universalist Church’s Green Sanctuary project, and Boulder’s ConservED Project, totalling well over $1000, before the tax deductions (rebates on my website reflect lower numbers because there I am including only after-tax money I’ve spent on this project, and some of the charities have not yet given away the bulbs (or at least have not told me about it) for the programs I helped fund. I also have personally given away about 50 CFLs to aquaintences and prospective clients, and I’ll be donating a bunch of Candelabra bulbs to the Colorado Renewable Energy Society’s Annual Auction at the end of this month.

    I did say “no” to one charity which asked, because I felt that my contribution would not actually increase the number of bulbs given away (the bulbs had already been purchased.) Due to the number of charities who have asked me, I have gone to donating only $1 per bulb for such programs… the charity has to come up with the rest of the necessary money on their own.

    The rebate offer remains open, mainly because I’m curious if anyone will ever send one in.

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