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Zero Purchased Energy House

Paul Kando

In two recent columns ( House Energy Plan and Energy Upgrade), I discussed an energy audited house with a current annual energy bill of $4,610. That annual expense could be reduced, following the energy audit’s recommendations, even without any up-front cash investment, by (1) treating the original $4,610 energy bill as the homeowner’s energy budget, (2) contributing his own labor and (3) committing to calculate, record, and reinvest every penny saved through a sequence of weatherization steps, each of which permanently reduced the home’s energy use.

photo credit: Mass Real Estate Law

Originally the house consumed 37,031 kilowatt-hours (kWh) of energy for oil fired winter heating, plus 3,345 kWh for water heating. That consumption was gradually reduced to 10,389 kWh and 937 kWh, respectively, reducing the energy bill by 72%.

That still leaves a $1,206 annual bill to be paid, most of it for heating oil. Let’s try to eliminate this expense as well, following the same strategy of investing all energy cost savings in further efficiency improvements. Thanks to what was already achieved, those savings have yielded an annual $3.404 that can be spent on this purpose.

Several options deserve consideration, including further improvements to the house, changing the heating system, abandoning fossil fuel use in favor of electricity, generating that electricity with solar panels on the roof and storing it in batteries or some other emerging storage technology (like super-capacitors) that may hit the market. The first task, however, is to create a multi-year, pay-as-you-go plan financed by the accumulating savings.

I would start with replacing the oil-fired heat with electric heat pumps — to heat both house and hot water. A ductless “mini-split” heat pump may cost $3,500-$4,000 and a heat pump water heater $1,300-$2,000. Each of these qualifies for a rebate from Efficiency Maine, reducing the cost. Using the $3,404 annual “nest egg”, we can pay for both heat pumps within 2 years. (Let’s leave the old oil-fired boiler in place for backup on very cold days, saving the expense of removing it, to boot.)

After the earlier improvements, the house now consumes 11,326 kWh — or about 39 million BTUs (MBTU) — of heating energy per year. 39 MBTUs delivered by a reasonably efficient oil-fired boiler costs about $819. The same 39 MBTUs delivered by an electric heat pump (at $10.34/MBTU) costs only $403.26 — saving an additional $416 per year, and bringing the annual total to $3,820 available to finance further improvements.

Solar power, for instance. According to the original energy audit report, the house consumed 5,274 kWh of electricity per year. Converting to heat pumps for heating has added 11,326 kWh, for a total of 16,600 kWh per year. That consumption requires a 17 kW photovoltaic (PV) system, which, at an estimated $3.00 per Watt, will cost $51,000. A 30% federal tax credit will reduce this to $35,700, a cost that would be reimbursed from energy cost savings accumulating over 9 years and 5 months.

However, 9 years is a long time to wait, and during that period solar prices may go down, electricity prices may increase, and the federal tax credit may be reduced or eliminated. So, why not consider a 5 kW (20 panel) $15,000 system instead—costing only $10,500 after the tax credit — an installation that could be paid for after only 2 years and 9 months?

Assuming 16¢/kWh for electricity, this system will yield about $800 in additional annual savings, bringing the cumulative total to $4,620 per year — eliminating the original energy bill entirely. This annual savings will pay for installation of the remaining $25,200 worth of solar panels (with the 30% tax credit if it stands) — perhaps by joining a solar farm — within an additional 5.5 years. (Without the tax credit this would take 8 years.)

With a 17 kW solar system in place, there will be no need to purchase any energy for this house. If it remains grid-connected, only a delivery fee need be paid to the utility.

You get the picture. The key is to be flexible as technologies and their prices evolve. One thing to watch for is the dropping cost of battery storage. Another is how electric utility business models evolve. In Vermont, one could already install a smart battery — for a mere $15 per month added to the electric bill — which automatically protects a home when grid power is interrupted.

What will the future bring? Electric cars that provide battery backup to our solar panels in exchange for plug-in power from our houses? Affordable house-scale microgrids? Neighborhood-scale microgrids that reduce both costs and carbon footprints?

The worst of climate change might be avoided if we all did what we can — beginning right now.