Solar?

So now that you're planning on your own personal reservoir, you're probably wondering about the most efficient way to power the pumps and filters. Solar power probably comes to mind, but Solar power, for all its thrilling potential and the ever-increasing bogeyman of "rising energy costs" is a much tougher row to hoe.

Part of the difficulty is the fact that I don't know what the energy needs would be for an energy efficient large home, let alone one that pumps and filters all its own water or one that tries to replace its natural gas usage with solar, so regard all of this as wild conjecture. The average American family uses 10,656 kWh per year or 888 kWh per month. I figure I can set up a very energy-efficient home (much like the water-conserving home I planned), but I will have additional costs, so let's leave it as is.

This solar calculator (www.findsolar.com) tells me I would need a 6.79 kW installation to cover those requirements here in sunny California, which would cover 679 sq. ft. of south-facing roof (which agrees with my own calculations). Such an installation would cost approximately $54,000 they say, or about $28,000 after tax breaks and incentives. It guesses that my average monthly savings would be $129.77 for a 25 year savings of $64,851.61. My calculations are a little more grim. By my calculations, even though it pays for itself in energy savings after 14 years, it doesn't beat leaving the $28,000 invested in an interest-compounding investment and paying the energy bills. The capital outlay is simply too large for the return.

However, if you can get a loan for the panels at 5% so you aren't providing the initial capital outlay, and you pay it off within the life of the panels (25 years), the picture is better. You initially pay more than you would just paying the electric bills, but when inflating energy costs overtake your fixed loan payments in year 10, you can start paying yourself back for the extra you initially spent, and in year 17 you break even. At that point, you can start saving the money you would be paying to the electric company in an interest-bearing account. In other words, the investment in solar isn't a good enough investment for your own money, but if you can leverage someone else's, and you don't mind increasing your payments a few hundred dollars a year initially, it can pay you back twenty years down the road.

Some of you may be wondering about the mysterious wonders of leasing solar panels. Basically, you continue to pay the same amount per month for energy, it's just that now you pay half of it to the solar company and half to the electric company. It doesn't really save you any money--it's just for if you want to reduce your carbon footprint (which we all would appreciate. If they ask you to pay a couple grand up-front for the installation on top of the lease, it's clearly a losing proposition.

What is really worthwhile, though, is the new third-generation photo-voltaic cells, which are much cheaper to produce and much more efficient at capturing energy. Unfortunately, they are still in development and won't hit the residential market for another 10-15 years. The question is: how much cheaper will they be and how soon will they come out? I've heard wild rumors that they would be able to be installed for something closer to $12,000, and that they would be able to cover your whole roof, so you might even make money selling energy back to the electric company (at a discount of course). IF something were to come out in ten years and IF you could install it for $12,000, you would make a lot more money by waiting and paying for electricity until that happens. However, if it costs more than $12,000, then your gains from waiting start to dwindle. You're still making money by waiting even if it costs $24,000 then, especially if the cells last longer than 25 years. If it takes 15 years for them to hit the market, you still make money until the projected capital outlay balloons to $20,000. All in all, it's a gamble. Interest rates are low right now, you could lock in a return by getting a low-rate loan and reduce your carbon footprint. Who knows, maybe in 10-15 years, interest rates will be much higher, solar companies will want to recoup their research costs initially, and the price will be more than projected.

So the jury's still out on solar. I think if you have the credit, and you doubt the pace of technological advancement, you switch over to solar. If, however, you believe in all this alternative energy talk, then you make sure when you renovate or build that your house is wired for solar. And then check your roof insulation. You lose thirty percent of your house's heat through the roof. Make sure that's sealed up tight. Make sure your dryer and stove are gas, or start hanging your laundry to dry (you can use hangers on a free-standing rack indoors). Keep one side of the sink filled with soapy water and do your daily dishes by hand. Switch all your lights to cfl's and then turn them off when you leave the room for more than half an hour. Plug all your appliances and adapters into power strips, and power the strip off when you're not using them. Other than hanging your own laundry to dry, none of those takes any longer than arranging for the installation of panels. Lower your energy costs now and put the difference in an interest-bearing account for the day the new panels arrive. You might just be able to buy them outright.