solar a-no-go

On a whim, I decided to price out a solar installation for my house. I was thinking that since my house is 100% electric (no natural gas), it might be a worthwhile investment.

Boy, was I wrong.

From March 2006 — March 2007, I used 16,858 kWh of electricity, which averages out to 1404 kWh per month. Obviously, I use a lot more in winter to heat the house, when usage spikes up to 3800 kWh per month vs the summer, when I’m using around 700 kWh per month.

Ok, in Ft. Collins, the price of electricity is $0.0662 / kWh, and I pay an extra $0.01 / kWh for wind energy, making the cost of my electricity $0.077 / kWh. This means I pay, on average, $108 per month for electricity.

Based on a solar calculator for northern Colorado, we find out that a typical system that covers only 50% of my usage would cost me $48,000. The only tax credit I would be eligible for is a $2000 federal tax credit; Colorado doesn’t offer me any incentives at all. So my total cost is $46,000 out of my own pocket. Yikes!

The calculator estimates that this system would save me $560 per year. On a purely monetary basis, this means it would take 82 years to break even. If you add in some assumptions, such as a 3.78% annual utility inflation (seems a bit steep to me), then the calculator thinks it would take me a mere 29 years to break even.

On the touchy-feely side, the calculator says I’d be preventing 173.0 tons (346,000 auto miles) of CO₂ from being generated (over 25 years).

Hm, that might seem to give me some warm fuzzies, until you consider the fact that I’m already using wind power and my carbon footprint of my electricity consumption is much lower.

To me, there are several obvious conclusions to draw from this simple cost-benefit analysis.

• the government, no matter the level, is only able to project its desires and modify its citizens’ behavior by offering incentives, such as tax credits. Without incentives, few individuals will change (whether they are rational agents such as yours truly or because they are lazy, ig’nant sheeple as per our national stereotype (for better or for worse)).
• solar power has a long way to go before it is practical for individual home owners. In fact, due to the inefficiencies of these small systems, maybe it doesn’t ever make sense for each individual to spend $45k per house (assuming access to the grid). Ft. Collins has 120,000 people, and I estimate perhaps 50,000 single family homes. If each were to spend $45k on a solar system, the total cost would be $2.25 billion dollars. It would be better to invest all that money into something else like a nuclear power plant or more windmills, and gain efficiencies of scale.
• finally, the overall conclusion I draw is that the best way for people to save money and reduce their carbon footprint is simply to consume less. My house has 30 year old crappy windows, and some inefficient appliances. Changing those out would cost a lot less than $46,000 and would result in a much quicker payback period.

I want to help save the planet, but I don’t want to go broke doing so.