Extra Electricity Bills Make Solar Look Even Better
Not every family has to worry about owning and maintaining two properties. It is usually more common in regions of the central and western U.S. where real estate prices are generally lower. Many people might think that anyone who can afford two homes would not need to worry about electricity bills, but particularly in those areas it can actually prove to be an even more daunting prospect.
While neither one will likely see continuous use, each of them must often use a minimum of power simply to keep heated throughout winter and some appliances will continue to function regardless of who is home. These costs make electricity a major concern for people with multiple properties. And it is this concern that makes these homeowners such a good test case for residential solar installations.
When Michael E. of Golden, Colorado, spoke with Real Goods Solar in 2009 about adding a ground-mounted solar installation for his home, he had no intention of serving as such an example. The family was certainly interested in reducing their electricity bills, and was growing increasingly worried that they would continue to see electricity rates from their utility continue to climb. In the 10 years prior, Colorado residents had seen their electricity rates jump more than 35 percent from 7.38 cents per kilowatt-hour to 10 cents per kilowatt-hour, according to the U.S. Energy Information Administration.
The family proved to be correct in their expectation as well, with residential electricity rates in Colorado rising to 11.36 cents per kilowatt-hour through September of 2011, an increase of another 13.6 percent.
Michael decided to simply avoid the whole problem as best he could, choosing to invest in what amounts to a fairly sizable 40-panel residential solar installation. With a peak capacity of 7 kilowatts and an expected output of 10,130 kilowatt-hours, the system provides roughly 80 percent of the family’s electricity needs. In fact, according to the EIA, that amount of energy would have accounted for more than 88 percent of the electricity needs of the average American household in 2010 and nearly 1.2 households in Colorado.
That one system alone should help to reduce carbon dioxide emissions by around 15,400 pounds each year and 385,000 pounds over its lifetime. But aside from the environmental benefits, 10,130 kilowatt-hours at last year’s average rate through September amounts to more than $1,150 each year in electricity savings.
Even if electricity rates stayed exactly the same that would mean savings of nearly $29,000 before even accounting for the solar incentives they will receive for producing solar renewable energy credits over time. The Database of State Incentives for Renewables and Efficiency reports that those credits amount to another 9 cents per kilowatt-hour each month, or another $911 each year and nearly $23,000 over the life of the system.
With those kinds of returns, Michael simply could not justify passing up on a similar opportunity on the family’s second home in Cripple Creek, to the southwest of Colorado Springs. Instead opting for a rooftop solar installation, Michael was able to expect similar returns and similar protection from rising electricity rates with a smaller solar system. At 5.17 kilowatts, the system should be able to produce another 7,800 kilowatt-hours per year, according to the National Renewable Energy Laboratory.
That amounts to further savings of $890 per year in energy costs alone and another $700 in SRECs. Between all the solar incentives and lower electricity bills, Michael can expect to see an annual return on his investment of more than $3,600 each year. Assuming, of course, that electricity rates stay exactly the same.
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