The Price of Power KW Landis PE copyright 1990 K.W. Landis In the fall of 1988 I designed and installed a small PV system for my home in Kansas. My intent was to use a simple stand alone system to gain experience in home power generation and solar energy. This also would be a way to increase the awareness of solar power in my community. The two most asked questions about my home PV system are: 1) does it work? 2) do you save any money? Does it Work? The answer to the first question is easy, yes it works. It works very well. I can use solar energy to light my home (halogen and fluorescent), provide entertainment (stereo, TV, VCR), cook food (crock pot), recharge power tools, and many more functions. Furthermore, I can do these things without burning fossil fuels, strip mining coal, or creating nuclear waste or acid rain. The answer to the second question has been less definitive. I'd usually say "no, it costs more, but that's not why I did it." Then I'd repeat the answer to the first question. This article presents several ways to calculate the cost of solar energy. PV System Cost The total cost of the PV system is calculated here assuming an economic life of 20 years and an interest rate of 8%. The cost to replace my golf cart type batteries every five years is included. The 50 $/year maintenance cost includes lamps, fuses, and miscellaneous expenses. All costs are converted to their present worth at the time of system installation. The annual owning and operating cost is then found by calculating the Equivalent Uniform Annual Cost: EUAC = 3100 (0.08) / [1-(1.08)-20] = $316 /year. PV ENERGY PRODUCTION To find the maximum amount of energy the PV modules could produce at my location, I followed the method in reference 1. This method involves calculating the total isolation on the tilted array on the average day of each month. Then multiplying by the days in each month to get the actual monthly insolation in WH/m2 month. The output of the PV modules is rated by the manufacturer at a specific rate of insolation. My ARCO M55 modules are rated for 53 Watt output at 1000 W/m2 insolation. The monthly rated insolation is then: (actual insolation/ rated insolation) X rated output. The maximum energy output is rated for each month and added up for the annual total. By this procedure I arrived at a maximum generating capacity of 379 KWH/year. The cost of generating solar electricity is the equivalent annual cost of the PV system divided by the annual output: 316/ 379 = 0.83 $/KWH. If this price is to be compared to utility rates, then the system cost should not include wiring, lights, and other costs that would also be incurred in using utility power. The EUAC for the PV production equipment only is estimated at 235 $/year. Therefore the cost to produce solar electricity is: 235 / 379 = $0.62 /KWH. While these are interesting numbers I wasn't sure either was the number I was looking for. For one thing I am not using all the energy my system can deliver. ENERGY CONSUMPTION Since my consumption of solar energy is not metered I don't know exactly how much energy is used. However, my home is also supplied by the electric utility. Consumption of utility power during the 18 months from January 1987 through June 1988, before the PV system was installed, averaged 2652 KWH/year. Since I had made no other significant lifestyle changes, I can assume that the solar system saved 2652 - 1562 = 1090 KWH/year. The cost to save energy then is: 2.7 times the maximum output capacity of the PV array, even though the PV system is not nearly used to its capacity. Another way to look at these numbers is to say that I am now using some amount of lighting, entertainment, tools, etc. equal to my original consumption of 2652 KWH/year. My total cost now is the equivalent annual PV cost plus my payments to the utility (utility payments include service charge). Therefore: the cost to provide an equal standard of living with the combined systems is: (316+ 163) / 2652 = 0.18 $/KWH. ENERGY EFFICIENCY The saving vs. production discrepancy comes from differences in the efficiency with which we use PV electricity and utility electricity. The costs of installing a PV system often include new high efficiency appliances. In my case the increase in efficiency primarily comes from lighting. When an inefficient appliance is replaced by an efficient appliance it is said that the new appliance "saves energy". It is also accurate to say that the new appliance "generates" energy equal to the amount "saved". For example if a 75 Watt incandescent light is replaced by an 18 Watt compact fluorescent, the new bulb can be said to "save" or "generate" 75- 18 =57W or 0.057 KWH/Hour. If used for about four hours per day the fluorescent bulb will have an amortized cost around 4 $/year and "generate" 83.2 KWH/year. Therefore, this light bulb can "generate" electricity for: 4 / 83.2 = 0.048 $/KWH. Note that this figure depends on the cost and usage rate of the bulb, but does not depend on the price of energy consumed by the bulb. We can conclude from this that the combined costs of generating electricity through more efficient appliances plus PVs can be much lower than the cost of PVs alone. The cost per KWH however, can vary widely with the choice of included costs and methods of calculation. SOLAR POWER My PV system saves an average of 77 $/year off my utility bill, but it costs me 316 $/year to do it. In other words I'm paying twice as much per year as I would using utility power only. My PVs save something far more important than money though. Because I use less energy from the utility, they save 2600 pounds of carbon dioxide pollution per year. They save over 7 pounds of sulfur dioxide pollution per year. They save over 900 pounds of coal per year and maybe a small piece of Wyoming hillside. That's what solar power is all about for me. The power to make a difference in the world. The power of choice. The power to help create a cleaner more healthy place to live. Solar energy may be expensive but solar power is priceless. REFERENCES 1. Duffie, J.A., W.A. Beckman. Solar Engineering of Thermal Processes. John Wiley & Sons. 1980 2. Knapp, C.L., et al. Insolation Data Manual. Solar Energy Research Institute. 1980 3. Leckie, Jim, et al. More Other Homes and Garbage. Sierra Club Books. 1981 ACCESS Kevin W Landis PE, 160 W Main, Kipp KS 67401-9065.