Residential Solar and Wind Systems: What Are the Costs?

December 28, 2010

Most Texas homeowners considering a solar energy system or residential wind turbine system will quickly face sticker shock. Wind turbine systems can run as high as $65,000 installed. The average cost nationally for a professionally installed solar panel system is about $8 to $9 per watt. A 2 kilowatt (kw) grid-tied system (no battery back up) can run to $16,000. A similar 5 kw system can cost upwards of $40,000. Deep cycle back-up batteries for both wind and solar can add on 20 to 30 percent more. You might be able to save around $2 per watt by doing the work yourself, however, energy efficiency programs may have certification requirements.

But don’t give up!

Because both residential and commercial demand for wind and solar energy is increasing, the technology is improving, there are more manufacturers, and the price is dropping. In the case of solar energy, the cost of an average solar panel in 1980 was $21 per watt (eg: a 15 watt panel would cost $315.00). Today, the average cost is about $2.50 per watt (low =$1.42/watt, high=$3.75). In 25 years, that’s a cost reduction of 90%. Power output capacities have also improved. In 1980, a typical solar panel might put out 22 watts. Now, 100 watt panels are common, if not plentiful. That’s a 450% increase in output. Add to this new enhancements through tracking (a motorized mount tracks the sun through the day to improve efficiency) and concentrating sunlight to extract up to 75% of the sun’s rays that increases efficiency by 1000 times over regular flat panels. Even if incentives aren’t available in your area, any solar or wind energy system installed by December 31, 2010 the Federal Energy Efficiency Tax credit lowers the cost by 30%.

The reason residential renewables are expensive is simple: you are investing in a home-sized power plant. Like any large scale power plant, that’s a long term investment made over the course of 15 to 25 years. And, like any long term investment, you should first take a few minutes to consider your needs and goals:

How much electricity do you use each day?
In a rural setting, will it cost more to bring more to bring poles and wires to your home?
Is your goal to have self-sufficiency while retaining a grid-tie?
Is your goal a zero-energy home?

In considering these questions, remember home size is irrelevant. The issue is purely how much energy you use because you are going to want a system that can meet your usage needs. A 1,500 square foot home doesn’t use any energy; it’s the people living inside that do.

Figuring your usage

Figuring your usage can be tricky. There is a big difference in watts and watt-hours. The power (watts) required to run things in your house is not measured the same way as your utility bills show (watt-hours). A 50 watt light bulb burns 50 watts of power each time it’s turned on. So the electricity supply has to be able to provide that 50 watts of power when the light is turned on. If you have a 30 watt battery, the 50 watt bulb won’t light all the way and quickly run down the battery. Watt-hours, meanwhile are the units of measurement of energy used over time. So, a 50 watt light bulb will consume 50 watts per hour (or even 50 watts per second if you are measuring in seconds). To use an analogy, let’s say we are using a waterwheel that only turns when the water pressure is 50 pounds per square inch (psi). However, the amount of water we use is measured in gallons per hour.

The important thing to remember is that watts and watt-hours are NOT interchangeable in making your calculations.

That being said, the way to determine your usage is to review your utility bills. For example, let’s say you use an average of 1000 kWh per month. That divides out to 33.33 kWh per day. The next step is to find out what electrical appliances and devices you are using, how many watts they consume, and how long do you use them. To compute kWh of a device or appliance, multiply the watts times the hours it runs during the day. A 500 watt chest freezer running for ten hours will use 2kWh of energy. If you only know the voltage and amps an appliance is using, there are lots of web sites that calculate wattage.

Now that you’ve got an idea about your usage, let’s first look at the costs of off-grid solar energy.

The next thing to look up is the amount of direct sunshine your location receives. Otherwise known as “insolation”, it is controlled by the angle of the sun, the weather, atmosphere, elevation, and location on the globe. The further north or south from the equator you go, the fewer hours of insolation. In Texas, insolation amounts vary from 4.5 to 5 hours.

Now we can see how many panels you may need. A very handy tool is the Solar Panel Estimator. Assume your insolation hours equal 4.5. The system efficiency is a product of the efficiency ratings of the current handling hardware: inverter (to convert 12 volts DC to 120 volts AC and smooth it into a nice, clean 60 hertz cycle), a battery charge controller, and the deep cycle batteries. Inverters typically run about 95%, charge controllers at 98%, and batteries at 80%. So, if we multiply .95 × .98 x.80, we get a system efficiency of .74 or 74%. That means our 100 watt solar panels actually produce 74 watts. If we compare the output from the Solar Panel Estimator, if our system was 99% efficient, we would only need 74 panels. Since our system is only 74%, we need 99 panels to make 33 kWh/day.

Either way, that’s a very large number of panels, and a lot of money, also.

Lighten your load

The easiest thing to do is find ways to cut your electrical use by eliminating inefficient devices. In Texas, the biggest home energy user is air conditioning. A 30 ton central air conditioning system with a SEER rating of 13 can use 2.3 kWh. Over ten hours, that adds up to 23 kW — 2/3 of our electrical load. There are different energy efficient ways of cooling your home. Swamp coolers, for example, work through evaporation though are most efficient in dry environments. Absorption chillers are common alternatives. They heat refrigerant at low pressure until it evaporates, then it loses its heat through condensing back into a fluid at high pressure. The heat source can be natural gas, propane, kerosene, or solar heat. Because there is no compressor to supply pressure, the system uses little energy.

The second biggest user is the electric hot water heater. Heating water in your home accounts for 17% of annual energy costs. A 40 gallon heater uses an average of 8 kwh/day. There are several energy efficient alternatives: change to a heat on demand system, use natural gas or propane to heat your water, or consider a solar water heating system in addition to your solar panels. Some solar water heating systems are nothing more that an old water heater tank painted flat black and housed in an insulated box with a glass window facing the sun.

Consider switching to energy efficient alternatives and/or Energy Star rated appliances. How many lights do you use in a room and do they have CFL bulbs? Can you change from a desktop computer to a laptop or tablet? Honestly take into account any energy-wasting behaviors such as leaving lights on all day or running the air conditioning while baking. Also, think about how well insulated and weather-sealed your home is and whether it needs improving. The less energy you can live without means the less energy-generating capacity you will need to install.

Let’s say that we’ve installed more efficient appliances and lights, replaced the water heater and air conditioner systems with a solar absorption chilling system that heats water also. That brings down the usage from 33 kWh/day to 5 kWh/day. Plugging the numbers into the Solar Panel Estimator, we arrive at 16 panels, which is much more manageable.

Home wind energy has come a long way from when the steel-bladed fan-type windmill was introduced to American farms in the 1870s. Small wind turbines that generate electricity are available in a range of sizes (“nameplate capacity”) from roof or chimney-mounted 1 kilowatt (up to $7,000 installed) all the way up to 100 kilowatt turbines mounted on their own tower (about $80,000 installed). Many of those below 1.2 kilowatts are available in kits for the do-it-yourself-homeowner from a home center.

However, while the power output from wind turbines might look appealing, getting the most watts for the buck is more complicated than solar power. While the sun shines everyday even when its cloudy, the wind is far more fickle. Some parts of the country are also windier than others; compare Abilene with Houston, for example. Consequently, a consumer needs to do far more research to determine how much wind might really be available for them to harness. Wind speed varies locally at different elevations. While it might seem to be a light breeze at street level, it might be a dead calm at 30 feet up or even blustery at 100 feet. Hills, river valleys, trees, and buildings also have a big effect on wind speed especially when coupled with urban settings. Local building codes and other rules must also be considered.

Let’s say you want to add a pole-mounted residential wind turbine to your system. The turbine cost $1800 on-line with free shipping. The 30 foot pole, also purchased on-line with guy wires and a few bags of concrete cost $500. The total cost comes to $2300. Factor in the Federal Energy Tax credit and the price drops to $1610.

Let’s also say you’ve done your homework on local average yearly wind speed. The new wind turbine will generate 3.4 kWh per day in an average 12 mph wind zone (Class 4). However, the local average wind speed is only about 10 mph (Class 2). So we now calculate that with these conditions will produce an average of 2.8 kWh per day (about the equivalent of 8 solar panels).

By combining wind and solar together, you have an intregrated renewable system that becomes a reliable source of home electrical energy 24 hours a day, generating an average of 5 kWh/day. In some parts of Texas, like Austin, where net metering is available, a homeowner can sell their excess generated power to the utility company.

What about hidden costs like maintenance and replacing worn parts?

Maintenance is minimal for both solar panels and wind turbines. Solar panels directly convert sunlight to electrical energy. To ensure they get the most power, they might periodically need to have dust and leaves hosed off. Solar panels do wear out over time, losing on average a watt of generating capability over 20 years. Wind turbines usually only have 2 moving parts that are exposed to the weather. Blades are typically bolted onto the hub which is protected by a nose cone. There is also the pivot that allows the wind turbine to swivel into the wind. Both of these can easily be replaced with parts from the manufacturer.

Something smaller: the Grid-Tied System

A grid-tied solar/wind system retains a connection to the utility grid. That means you will still be a utility customer but you will offset the energy you use from the utility by making your own. Right now, a Texas homeowner can walk into their favorite home center and buy a solar power kit that will generate about 1230 watts for home use for around $7,000 (10 panels, power cleaner, and inverter). Deep cycle storage batteries can also be added to a system; they generally cost about $250/each and last ten years.

On average, these panels alone would make about 4kWh for daily use and knock off 120 kWh from the monthly bill for a savings of up to 12% for a typical 1000 kWh bill of $119 (11.9 cents/kWh) that means a monthly savings of about $14.24 or $171.36/year.

Assuming prices and usage remained frozen, the system would pay for itself in 17 years or 24 years without the Federal Tax Credit. That assumption, of course, is ridiculous. Energy prices spike and the price paid for each kWh will vary during the year, trending higher over time. With this in mind, the return on a solar energy investment might in fact only take 15 years or even less. Plus, consider that 12% energy savings is three times what you’d get from putting that initial $7,000 in a bank.

Another way a solar energy investment pays for itself is by increasing your home’s value. Most home mortgages are for 30 years, yet few consumers live in their homes for that long. According to the US Department of Housing and Urban Development, a home’s value rises $20,000 for every $1000 in reduced yearly electricity costs. So even if you don’t remain in your home for 30 years, you will recoup much of your investment upon the sale of their home. Remember, too, that as solar panel technology improves, the homeowner can swap out old panels for newer, more efficient ones that cost less. These are just bolted onto the rack and plugged into the circuit. Over time you can save even more money on your bill, and even sell energy to the electric company by expanding and upgrading both your panels and batteries.

So what do you do with that money that you are saving every month by not buying electricity from the power company? One Block Off the Grid (1BOG.org) suggests saving the money to send kids to college. By investing in a residential renewable energy system when your children are born, the money you will save in the course of 18 years could grow to over $118,000.

Not all homes and budgets may be cut out right now for solar panels or wind turbines. To get a good idea of how good your location is visit the National Renewable Energy website In My Back Yard. Two other good tools are this e-booklet Feasibility of Photovoltaic Systems and the Solar Cost Estimator.

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About 

A native of Wyomissing Hills, PA, Vernon Trollinger studied Theatre Arts/Communications and English at the University of Iowa, later earning his Master of Arts in English at Iowa as well. After a brief career in archaeology, he now writes about green energy technology, home energy efficiency, the natural gas industry, and the electrical grid.

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  • http://www.solarenergy.com/ andrew_paul111

    Nice Article,Thanks for sharing useful information.

    Thanks,

  • http://asdgsagdjs JakeyM

    Well said, but we all need to appreciate that adding Solar in their property is an asset that could boost the actual valuation of their property if / when they choose to sell. With the environment the way it is going we cannot dismiss any system that offers 100 % free electricity at no cost to both the buyer and more significantly the earth!