Finally Home Solar Power Makes Cents

Remember these headlines?

A New Dawn for Solar Energy
Popular Science (2008)

The Sun Rises On Solar Power
The Guardian (2006)

Maybe you don’t remember these exact headlines, but I’m sure you remember all the hype surrounding residential solar systems at the time.

And things were looking pretty sunny for solar for a while because home owners had plenty of equity in their homes to spend and weren’t afraid to use it.

Well, you know what happened next, and how the mortgage crisis pretty much put the kibosh on the housing market and everything related to it.

Now six years later the U.S. housing market is off life support and, in the interim, the price of solar panels dropped like a rock from $5 a watt to less than $1 a watt when purchased in quantity.

A “buck a watt” has always been the holy grail of home solar because it brings the total installation cost (including tax credits) to the point where solar energy is competitive with, and in many locations cheaper than, the cost of utility generated power.

This means that the estimated cost of a solar energy system, including installation, is now $4 - $5 per watt compared to $8 - $9 per watt six short years ago.

Here’s what it means for you.
If you own a home that consumes the  “average” 800 - 900 kWh (kilowatt hours) of electricity per month, and want to replace 25% of utility provided power with a solar system, it would cost around $5,700 after the 30% federal tax credit.

Taking it a step further, the power this solar system generates would cost around 10 cents per kWh for the next 20 years - the guaranteed life of a solar panel. And this doesn’t take into account the credit you would receive on your electric bill for the excess power your system generates which is sold back to your utility through a process called net metering.

The bottom line is this: If you are currently paying 10 cents per kWh or less for electricity you might want to wait until your utility raises their rates again before you seriously consider installing solar power. Unless of course your concern for the environment trumps your financial concerns.

But for those of you in New England, for example, who are paying anywhere from 14 to 18 cents per kWh, the time has finally arrived when solar energy makes sense and cents.

If you're interested in solar power for your home you can estimate how much it will cost in 3 easy steps on the solar cost page at main site.

"Cheap" LED Lights Are Finally Here

I've been using expensive LED light bulbs for years only because an electrician friend of mine would occasionally "find" a few lying around and pass them out to friends.

Now I no longer have to worry about SWAT breaking down the door to rescue some light bulbs.

On a recent trip to the "Bank of Home Depot," where I make regular deposits, I saw the 40 watt Cree brand LED light selling for $9.97 and the 60 watt for $13.

I love LED bulbs for a bunch of reasons. First of all, they last up to 25,000 hours. At 8 hours per day usage, they have lifespan of 8 1/2 years. That's a savings of around $200 over the soon to be extinct incandescent light bulb.

The gals like LED's too. Unlike those ghastly CFL bulbs, the light emitted from an LED doesn't make their complexion look like they're waiting to be embalmed.

They also have two versions; the warm white bulb which I just mentioned, and a daylight bulb that costs a buck more.

LED bulbs are also instant on and dim-able. And if you break an LED bulb it has a special coating that prevents flying shards.

Biomass Stove Tax Credit Reinstated

On January 1, 2013, Congress reluctantly brushed a few crumbs off their table onto the plates of working men and women by reinstating $300 of the original $1,500 tax credit for biomass heaters.

The provision allows taxpayers to receive a tax credit for the full cost of the equipment and installation up to $300 for stoves bought in 2013 and is retroactive, so that all eligible stoves purchased in 2012 can also get the credit.

Taxpayers are entitled to a $300 tax credit for the purchase of wood and pellet stoves or biomass boilers and furnaces. The only conditions are that the equipment be at least 75% efficient and purchased in 2012 or 2013 and the taxpayer has not claimed an aggregate of more than $500 in previous years for this tax credit.

This means that every new EPA certified stove purchased is eligible for full $300 tax credit because they all meet the 75% efficiency threshold and cost more than $300. However, a taxpayer could not collect the full $300 if they have already received tax credits under this provision in previous years and the total amount was over $500.

Many websites say that the credit is only for 10% of the purchase price, up to $300, but this is incorrect. Biomass stoves are a "residential energy property expenditure" that receive credit under section 25C(a)(2). For more information click here.

In addition to the purchase price, consumers can include the cost of professional installation which is important to the proper and safe operation of biomass stoves.

How To Use Ceiling Fans In The Winter

Did you know that the ceiling fans you installed to keep you cool during the summer can also be used to help keep your rooms warmer when the heat is on?

Ordinarily, the breeze from a fan makes you feel cooler by increasing the evaporation of moisture from your skin. But you can also use your ceiling fan to help you feel warmer by redistributing the warm air that rises towards your ceiling.

Many ceiling fans, including all fans manufactured in the U.S. after 2007, have a switch to make the fan turn in the opposite direction blowing the air upwards.

By running your ceiling fans in reverse on low speed, the warmer air near the ceiling will be pushed toward the walls and down to the floor. The air from the floor will be drawn back to the fan in the center of the room again. This helps distribute the warm air throughout the room making you comfortable at a cooler thermostat setting.

Your Inefficient Gas Furnace Is Picking Your Pocket

Just like a professional pick pocket steals your wallet without your knowledge, your inefficient gas furnace is stealthily robbing you of hundreds of dollars every heating season.

When a furnace losses efficiency it happens gradually over time and, in the case of propane, is often masked by ever rising fuel prices.

If you're not having your furnace tuned up faithfully at least every other year, or it's 15+ years old, you eventually find yourself in a position where 35 - 40% of what you spend on fuel is going right up the chimney.

The table below illustrates how much money could be saved each heating season with a more efficient furnace.  

Heating System	Efficiency	Cost Per Unit	Fuel Consumed	Annual Cost	Annual Loss/Gain
Propane Furnace	65%	$3.21/gal	1,202 gal	$3,858	19% - 28% Loss
Propane furnace	80%	$3.21/gal	977 gal	$3,136	$722 Gain
Propane Furnace	90%	$3.21/gal	868 gal	$2,786	$1,072 Gain

In the case of propane, a new high efficiency furnace (92+%) can be purchased for around $2,000 which would pay for itself in as little as two years and would ensure substantial savings for years to come (as long as you keep it tuned up).

How High Will Heating Oil Prices Go?

I just finished updating the Fuel Cost Comparison Chart for the month of February. As usual the prices for petro based heating products have risen again; but only slightly. At this point I think the damage has been done for the 2012/13 heating season but we still have at least seven or eight weeks left so who knows.

The table above from the Massachusetts Office of Energy and Environmental Affairs illustrates the trend in fuel oil prices over the previous 14 heating seasons.

During the last 10 years, the cost of home heating oil has risen an astounding 240%! This averages out to around 6% per year compounded annually - or roughly 3 times more than the core inflation rate.

Of course the core inflation rate doesn't include energy so we really don't feel it, do we?

If prices continue to rise at an average 6% per year, it will take a mere 4 years to reach that not so magical number of $5 per gallon. And with all the speculation, tension in the Middle East, and increased global demand putting constant pressure on prices it will probably happen sooner than later.

How To Lower Home Heating Oil Costs

Oh Goody! Heating season's here. If you heat with oil it's time to once again scramble around for $2,400 to heat your home until spring arrives. I used to heat with oil and my solution was moving to Florida. If moving to a warmer clime is not in your future I have some suggestions that are sure to save you some money on your heating bill.

The first two suggestions have been around forever, but if you haven't implemented them yet you're missing out on an opportunity to get a relatively large payback for very little money.

Weatherize
Weatherizing your home by caulking around windows and weather stripping around exterior door frames really gives you the biggest bang for your buck. A couple of other things you can do but cost a few extra dollars are applying 3M window film over the windows and/or adding a couple inches more of insulation in the attic.

Although window film needs to be re-applied each year, it should save you at least twice what it costs. And as far as the insulation goes, it's a one off expense that will pay for itself many times over. 

Set Back Thermostat
This $40 gadget is something else you can install yourself and could easily knock $100 - $150 a year off your heating bill. What I like about a set back thermostat is you can program it to crank the heat back up a half an hour before reveille so everybody doesn't wake up shivering like they just crawled out of tent in the White Mountains.

New Oil Burner
Hopefully you have a heating tech over once a year to tune up your furnace or boiler. At some point he or she will inform you that the efficiency of the unit has decreased to a level (70% or less) that indicates replacing the old system with new, energy efficient equipment.

He or she will also try to pitch you on the idea of parting with a few thousand dollars for a whole new furnace or boiler. In most cases all you need to do is replace the burner unit at a cost of around $500 - $600 plus installation.

Every 1% increase in equipment efficiency lowers your heating bill by an equal amount. An 8% increase in efficiency, for example, would reduce the average home owner's oil heating bill by around $200 per year.

Air to Air Heat Pump
Washington state, where 6% of the homes are still heated with oil, is prime territory for an air to air heat pump because the moderate winter temperatures usually hover around the mid 40's and rarely dip to sub-freezing territory where heat pumps have a tough time keeping up.

An air to air heat pump is 200% efficient, so for every $1 you spend on electricity you get $2 worth of heat.

You can purchase a Goodman heat pump and air handler capable of heating and cooling the average home for as little as $2,200 + installation. Yes, I know Goodman is far from top of the line, but as any well trained, experienced HVAC tech will tell you the quality of the installation is more important than the quality of the equipment being installed.

Side Note
As long as we're talking about the quality of equipment, if you've been thinking about installing a high efficiency gas boiler or furnace, you can read here what heating contractors have to say about specific brand names such as Buderus, Veissman, etc. Some of the comments are pretty funny.