ASK THE EXPERTS: The Value of Efficiency


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Compact Fluorescent Light Bulb
Electrical efficiency upgrades such as lightbulb swapping reduces the cost of your solar-electric system.
Compact Fluorescent Light Bulb

I’ve been searching your back issues for a particular Home Power article that talked about how for every $1 spent on energy efficiency, you would save “X” dollars on renewable generating capacity. Can you help me find it? I’m chairman of my town’s green committee and currently serving as the “solar coach” for a program run by the Massachusetts Clean Energy Center. It’s a group-purchasing plan for residents to buy PV systems at a discount. I’d like to be able to quote the article to the people on my sign-up list (currently more than 180 residents, nonprofits, and businesses). We’ve been quoted about $3.50 per rated watt for batteryless grid-tied PV systems (including our bulk-buy discount, but before incentives), so I suspect the ratio of savings has come down quite a bit, but is still significant. 

Andy Boyce • Hopkinton, Massachusetts

The general estimate that Home Power had been using for many years is that for every $1 you spend on efficiency and conservation measures, you save $3 to $5 on a battery-based off-grid PV system. As you point out, this ratio may have decreased, because the cost of PV systems has gone down significantly since the earliest days of the magazine when an off-grid PV system may have cost $15 per installed watt.

Since then, PV system costs have decreased significantly, while appliance efficiency has increased. That means homes are generally more efficient before their owners even start to consider how best to spend their energy dollars. That also means that some of the low-hanging fruit of energy efficiency has already been picked, and further gains from efficiency investments are likely to cost more per the same amount of energy saved.

It would be great if we had a way of more accurately quantifying this estimate on a whole-house basis—that exercise could become somebody’s master’s thesis. However, it is much easier to do this for a particular location on a load-by-load basis.

Let’s look at an example of changing incandescent lightbulbs to compact fluorescent bulbs. While this may be the most likely of previously picked low-hanging fruit, it demonstrates one small but important aspect of the efficiency gains that can save us money on our PV systems. Personally, I live in a small off-grid home and rarely have more than two lights on at a time. But I can imagine tens of thousands of inefficient homes that might average eight or so lights on for three to four hours a day.

8 bulbs × 75 W × 3 hrs./day ÷ 1,000 W/kW = 1.8 kWh/day

8 bulbs × 20 W × 3 hrs./day ÷ 1,000 W/kW = 0.5 kWh/day

That is an energy savings of 1.3 kWh each day, for an initial investment of about $36 for quality CFL lights. Just this one simple efficiency investment translates into a 0.4 kW reduction in a batteryless grid-tied PV system’s size.  

At your mentioned installed cost of $3.50 per W (a very good deal), that turns into a total system cost savings of $1,400 (0.4 kW × $3,500/kW). In this case, for every dollar you spend on compact fluorescent lightbulbs, you will save $38.89 ($1,400 ÷ $36) on the cost of your solar-electric system. Wow, that’s huge.

Of course, as you get into more expensive items like clothes washers, refrigerators, etc., the energy savings will be lower, while the upgrade cost is higher. Upgrading from a 1990s model refrigerator to a 2012 Energy Star unit can save about 2.4 kWh per day, which translates into a $2,490 system savings at $3.50 per installed watt. With an $800 fridge, the ratio is about $3.11 saved for every dollar spent.

Upgrading from a 2001 Energy Star fridge to a 2012 unit saves about 0.35 kWh per day, resulting in a PV system cost savings of only $364—significantly less than the upfront investment of buying the new $800 fridge. 

As you can see, it is all about first picking the low-hanging fruit with your energy-savings investment, then moving on to less cost-effective items. But even a small savings ratio is worthwhile. This discussion of efficiency investments is only relative to the initial cost of the PV system. But there are other reasons and factors—such as decreasing the amount of climate-influencing pollutants and keeping ahead of the ever-increasing costs of utility-made electricity—that make investing in superefficient appliances a smart choice.

Michael WelchHome Power senior editor

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