The Biggest Bang For Your Buck
April 16, 2011Keywords Meta-Tag
What’s the Biggest Bang for Your Buck – Solar Panels or Energy Efficiency Improvements?
A few months ago, I was talking to the owner of a solar panel installer about cross-offering our services with theirs. After a half hour of meetings, she looked me in the eye and sighed. She said “Frankly, I don’t think this is going to work. We’re competing for the same dollars and we both know that homeowners should always go with home efficiency first, before solar installs.”
Huh. That’s interesting, especially given the timing. Just last month, the North Carolina legislature introduced a bill that would require the state to double its production of solar energy in the next 7 years. And yet, there’s no bill existing in the state that requires residential, commercial or industrial property owners to ensure that their properties are energy efficient. The government would rather focus on producing more “green” energy than reducing wasted energy.
What Does This Mean for The Home Owner?
Let’s look at a scenario. Jim owns an older 4-bedroom home with some serious energy costs – over $500 each month for gas and electricity. He has $10,000 to spend on a plan to reduce his utility costs and improve his home. What should he go with – solar or energy efficiency improvement?
Solar Panel Installation
Solar panels are expensive to install. Let’s assume that Jim can get and install 6 120-Watt solar panels installed for $10,000 (the equivalent to 152 60-watt bulbs and about 2/3rds of a home’s needs). He’s just reduced his electrical consumption by 2/3rds (in the best case scenario including a lot of sunny days).
Sounds good, huh? Except, he’s still paying for gas (and most homes are gas heated). He’s still paying for 1/3 of his electrical bills. AND (and this is the kicker) he’s still wasting up to 40% of the energy! As the summer rolls around, if his home isn’t properly sealed, he could be losing up to 40% of the effects of his air conditioning. He may be getting 2/3rds of his electricity for “free” (if you don’t include the $10K installation cost) but he’s wasting at least 1/3rd of that electricity with poor efficiency. And in the winter, his gas-powered furnace is still producing the same high utility bills.
Let’s assume that 40% of Jim’s $500 utility bill comes from electricity and 60% from gas – he’s now paying (on average) $300/month for gas and $66/month for electricity. An overall savings of 27%.
Energy Efficiency Improvements
Depending on what his house needs (and every home is different, so be sure to do an Energy Audit to know what’s best), Jim may spend $10,0000 to improve his insulation, tune up his HVAC system, and/or seal his crawl space. Whatever it is, if Jim used a reputable energy efficiency contractor, he knows that the number one problem with his existing house is being fixed and improved.
With his home now properly sealed and insulated, with an efficient HVAC system, Jim and his family see a dramatic improvement across ALL their utility bills – electric and gas in ALL weather –sunny or cloudy, cold or hot. He’s now paying $195/month for gas and $130 for electricity. An overall savings of 35%.
The added bonuses? Jim’s home is more comfortable, has better air flow, is healthier, and has increased home value because it’s been maintained.
First Things First
When looking at what’s the biggest bang for your buck, make sure that first your home is maximized for efficiency. Not only does it decrease the drain on our nationals energy supply, but it also improves the value of your home and makes it a cleaner, greener, more comfortable space for your family.
A comparison of energy efficiency options, from the least complex and least costly
to the most complex and most costly.