Evaluate Your Options
Renewable energy is now a commonplace term in 2015 and there are a myriad of options when it comes to choosing a renewable investment. The most popular options today are solar, wind, and geothermal. Depending on where you live, some options are more feasible than other. For example, if you live in the deserts of Southern Arizona, you have more sun than most places on the Earth and tapping into the energy stored in the ground is much more costly. In this discussion, we will focus on the Midwest where we have plenty of wind, cold winters, moderate sunlight, and good soil. All comparisons in this article use pricing that does not account for a 30% tax credit, which applies to any of the renewable options.
Harnessing the Power of the Wind
Wind energy has been used as a source of power since man took to the waters and threw up sails to help propel their boats. Modern wind generators are solely focused on generating electricity, and the generators have become much for effective and cost-efficient in the last decade. The only inherent issue with wind energy is that it requires wind, which is not always a consistent resource. Storing electricity is incredibly expensive, which means that it needs to be used immediately after it is created. What if you need electricity when it is not windy? What if it’s windy and you’re not using electricity? These are the macro-level issues that electric utilities are facing right now with more large-scale wind farms providing a larger portion of our electricity.
On a residential scale, the Wind Energy Foundation says you can expect to spend $10,000 – $70,000 depending on your electric needs. They expect to see a 5 kW turbine, which would be sized for an average home, to produce about 8,000 kWh per year. A 5 kW system will likely run you over $20,000 and even at $0.10/kWh, the annual savings is $800. It will take 25 years to recoup a $20,000 investment, and the turbine is expected to last about that long.
The United States is divided into zones by how much sun they get each day (Wholesale Solar has a good depiction of this map). In the Midwest, we average about 4.5 hours of direct sunlight per day. Wholesale Solar estimates that a nominal system will cost $4/watt and take 15 years to pay back with an electric rate of $0.20/kWh. The rates in the Midwest actually average less than $0.10/kWh, which effectively doubles the payback period.
Solar technology has come a long way and is making great strides in residential markets, but the long winters and low electric rates in the Midwest make it a challenge to pay off the system during the expected lifespan of the system. Manufacturers are working hard to create more robust systems, and Energy Informative is optimistic that modern panels could last over 30 years, which is a big improvement over the current estimates of 20 years.
Modern ground-source heat pumps trace their birth back to the 1940’s when heat was being thrown away as a byproduct of refrigeration. Capturing the heat of this compression cycle allows a heat pump to warm the air or water surrounding a coil, which in turn cools down the liquid in the coil. A ground-source heat pump sends this cooled liquid into the ground, where it is warmed by the heat in the soil and then returns to the heat pump, which repeats the cycle. If you have done any research on this topic, you will see claims of over 300% efficiency, which sounds crazy, right? The secret is that the heat is being stored in the ground, and we are simply using a pump to collect that heat and transfer it from the ground to our home. This heat is naturally occurring since the ground captures the vast majority of the energy from the sun in the form of heat. We are simply moving the heat from one location to another, which costs very little energy or money.
A ground-source heat pump is certainly not a small investment, but many homeowners are already comfortable buying a fossil-fuel burning furnace and air conditioning unit. A ground-source heat pump will cost about $20,000 to $30,000 to install, but that does offset the need for other heating and cooling systems, which saves around $10,000 up-front. Users switching from a propane system can expect to save up to $2500 per year and natural gas users can save about $1000 per year in heating and cooling costs. The more you use your heat, the more you will save since the calculated savings are dependent on the number of heating-degree-days in your area. At this rate, propane replacement systems have a pay off of under 10 years and some are even around 5 years. Switching from, or avoiding, natural gas will more likely be 10-15 years. This is great news since a geothermal loop field is built to last over 50 years!
Geothermal expert, Jay Egg, estimates that the return on a geothermal system is even better when you take into account the lower maintenance costs and volatile fossil fuel markets. For more information on how you can make the most of your renewable energy dollar, visit us at www.nexgenenergy.net or email us at firstname.lastname@example.org
Other Great Resources
NexGen Energy’s self-driving loop technology is allowing ground-source heating applications to be installed almost anywhere! Please visit our website or join the discussion on Facebook. You can also leave a comment on this post if you have any thoughts or questions.