Alternative Energy for Housing

Team 2• Lindsey Jantz – Organizer/Leader• Gerald Spotts – Techie• Johnny Lo – Summarizer

EGR 403 – 03Fall 2007

Overview

• Background Description

• Scenarios

• Factors (environment, cost, power, efficiency)

• Analysis Approach (Present Worth)

• Sensitivity Analysis

• Conclusion

Background

• Living in a world with increasing and alarming global warming concerns, people are going green.

• Solar Energy: photovoltaic cells in panels convert the sun’s rays into useful energy

• Solar panels can get expensive– May take many years before the investment pays off

Scenarios

• Family of 4 living in a 2200 sq-ft home in Orange County area.

• Conventional Energy vs. Solar Energy– 3 different sized solar systems

• Is initial investment for solar energy a better option than standard electricity?

–For period of 10, 20, 30 years

Fixed Parameters

• Fixed average power usage (kWh) for both cases

• Analysis periods of 10, 20, and 30 years

• Solar System life of 30 years

Conventional Energy

• Sum of average monthly energy costs

• Rate according to SCE

• Increasing rate of 2.8% per year

• Considers decreasing consumption– For example, family members move out

Solar System

• 3 Systems:– Small (45% of energy is solar)– Medium (65% of energy is solar)– Large (100% solar energy)

• Each system is financed with a 10 yr loan with a 7% interest rate

• Remaining cost is based on conventional energy costs

Irvine, CA

Present Worth Analysis

• Cash flows:– Conventional energy– Solar: Monthly loan payments + additional

energy costs

• NPW (NPV function) used for each analysis period

Conclusion

• Conventional energy is the better alternative for a 10 and 20-year period

• System 2 (combination) paid off and actually was the better alternative after the 30 year period– 65% solar and 35% conventional energy

Other Considerations

• Solar is environmentally friendly

• Better benefits depending on location

• Many state incentives– CA State Cash Rebate

• if system is connected to utility grid

Resources

• U.S. Department of Energy: – Information on incentives, etc.

http://www1.eere.energy.gov/solar/

• Heritage Solar:– Installs solar system in Southern CA

– Can get estimates for your home online

http://www.heritagesolar.com

• http://science.howstuffworks.com/solar-cell.htm