My goal to build an all-electric, net-zero energy home relies on a small building footprint, meticulous airtight construction, a thick thermal envelope, and good-enough windows and doors. All that extra effort and material cost will be partially offset by replacing a standard furnace and separate air conditioner with a small all-in-one ductless mini-split. Of course, I’ll chose energy-efficient appliances and go with all LED lighting. Even so, is it really possible to achieve net-zero in Wisconsin? Can I afford it? What’s a reasonable payback? How many solar panels will I need? Will the solar panels detract from the good looks of my home?
My first step was to find out how much energy my home will use. I looked at a number of energy modeling programs before choosing REM/Design. This user-friendly software is recognized by Energy Star and comes with a free 14-day download. I knew my foundation, wall, and ceiling R-values from my plan, and I looked up the manufacturer specifications for windows, heating/cooling equipment, appliances, and lighting. Here’s what I found out:
Hot Water: 3040
Lights & Appliances: 4601
TOTAL ELECTRICAL DEMAND: 13,414 kWh/year
So what size PV system do I need? After consulting with Mike Dearing of Driftless Solar, we decided on a 7.32 kW system with a year one estimate of:
TOTAL OUTPUT: 10,664 kWh/year
This falls short of my net-zero goal by about 20%, but I’m okay with it for several reasons. For one, I’m pretty confident that my personal energy use will fall under whatever “typical” use patterns may have been assumed in the energy modeling program. If I’m wrong, or if another families use pattern is more demanding, more panels could be added. The other reason why this system makes sense is cost. Mike has advised me that a 7kW system is the largest he can economically install in a residential application given current electrical codes and existing technology. Several other solar installers I contacted advise sizing a system to 2/3 of demand where “monthly true-up” is in place (more on this below).
To figure payback, I need to understand how the yearly demand calculated by REM/Design breaks down to monthly demand. The best measure of monthly energy need is historical weather data called “heating degree days” and “cooling degree days”. I found the numbers I needed at BizEE. I chose Lone Rock (a neighboring village also located in the River Valley) as my nearest weather station. It gave me a 5-year average by month for both heating and cooling, based on a desired 70 degree indoor thermostat setting. I found out that January is the coldest month, accounting for 18% of my annual heating demand.
To make things easy, I assumed hot water and lights & appliances demand to be the same each month—-although of course more lighting is needed in the winter when daylight is in short supply.
My next step was to find out how much energy my panels could generate per month. I used another calculator—-this one by the National Renewable Energy Lab called PV Watts. The calculator asked for my location and details from my plan including:
array type: fixed, roof mount
tilt: 14 degrees (3:12 roof pitch)
azimuth: 173 degrees (7 degrees east of south)
I had to fiddle around with a few parameters on the calculator like system efficiency to get PV Watts’s calculation to more closely align with my solar installer’s estimate. From there, the calculator gave me the system’s estimated output per month. No surprise that July—when the sun is high and skies are clear—is my best month, and that December is my worst performing month.
Now I had to understand my utilities rate structure. Alliant Energy serves my Village, and their standard residential rate is $0.12 kWh. My surplus in July won’t help me in December—this utility calculates my bill by what’s known as “monthly true-up”. Each month, I can produce or use as much electricity as I like but it never carries over to the next month. When I use more than I produce in December, I buy from them at $0.12 kWh. When I produce more than I use in July, they buy from me at $0.03. Here’s how I put it all together:
Jan 1581 kWh-534 kWh generated=1047 kWh x 0.12=$126 pay
Feb 1476 kWh-639 kWh generated=837 kWh x 0.12=$100 pay
Mar 1319 kWh-1016 kWh generated=303 kWh x 0.12=$36 pay
Apr 1109 kWh-1033 kWh generated=76 kWh x 0.12=$9 pay
May 899 kWh-1193 kWh generated=(294) kWh x 0.03=$(9) rebate
Jun 812 kWh-1189 kWh generated=(377) kWh x 0.03=$(11) rebate
Jul 812 kWh-1255 kWh generated=(443) kWh x 0.03=$(13) rebate
Aug 812 kWh-1159 kWh generated=(347) kWh x 0.03=$(10) rebate
Sep 847 kWh-976 kWh generated=(129) kWh x 0.03=$(4) rebate
Oct 1057 kWh-709 kWh generated=348 kWh x 0.12=$42 pay
Nov 1214 kWh-520 kWh generated=698 kWh x 0.12=$83 pay
Dec 1477 kWh- 441 kWh generated=1036 kWh x 0.12=$124 pay
TOTAL COST OF ELECTRICITY PER YEAR=$473
How much will my PV system cost? My installer quoted me:
Installed cost of 7.32 kW system =$20,345
Focus on Energy incentive =($2,000)
Federal Tax Credit (30% for 2019) =($6,103)
MY COST =$12,241
Unless things change in Washington, the federal tax credit will decrease to 26% in 2020, to 22% in 2021, and then it’s gone for residential applications. The Focus incentive is a Wisconsin program that is subject to change each year, and can run out of funds if there are too many applicants. The current eligibility is a cash-back of 12% of installed costs, not to exceed $2000.
How do I know if I’ve made a good financial decision? I’m definitely all about the environment and doing my part to invest in a fossil-free future for my grandchildren (and everyone’s grandchildren), but I’d like to know (and you probably do too): what’s my payback?
According to the author of “When You’re Financing a Green Home, Payback is Irrelevant”, there are two basic ways to evaluate an energy-efficiency improvement.
The first way is to calculate “simple payback” by taking the cost of the PV system and dividing it by your annual energy savings (total cost / annual savings = simple payback):
7.32 kW system cost =$12,241
cost of energy with no PV system (13415 kWh)($0.12) =$1610/yr
cost of energy with 7.32 kW system (from table above) =$473/yr
energy savings =$1137/yr
payback =11 years
The second way to calculate the value of an energy-efficient purchase, and the one that author Allison Bailes says makes more sense—whether you’re financing the investment or not—is to calculate monthly savings. I chose a 25 year amortization because the system comes with a 25 year warranty. Here’s how it would work for my system:
HOME WITH NO PV
True Monthly Cost=$134/month
HOME WITH PV
Loan for $12,241 with 25 year amortization @4%=$65
True Monthly Cost=$104/month
NET MONTHLY SAVINGS=$30
By this metric, it makes complete sense to buy the PV system because it cash flows positive from the very first month. Mike Dearing of Driftless Solar makes a different calculation. He uses “Years to Cost Recovery”, or the year the system’s cumulative cash flow goes positive. In my case, he calculates:
Cost Recovery=8 years
My design has inherent inefficiencies. The 3:12 pitch is very low and snow pack will be a problem. There will be periods of time—several days or more—when production will come to a complete stop. It’s possible to clear panels with a snow rake, but in my case not feasible unless the panels are located on the lower garage roof. However, because that roof steps back from the south side of the house, there is significant shading by mid-afternoon and I rejected that option after modeling it in Sketchup
I played around with PV Watts to find out what the optimal roof pitch is at my latitude. To make it easy, I just looked at annual production (not winter production). The optimal pitch is 8.5:12—-similar to what you might see on a Cape Cod or Arts & Crafts style house. When I dialed back to my more contemporary 3:12 pitch and increased the system size to match the annual production of the 8.5:12 pitch, I found I would need to add one extra solar panel. The panels from Driftless Solar are $510 each. I think it’s safe to say that a steeper roof pitch or the addition of an angled roof rack would cost significantly more than one extra solar panel. In this case, system inefficiency is best made up by simply adding more panels.
Here’s a drawing of how my panels will look when installed. There are 24 panels, each 39” x 66”. I’ve placed them high on the roof to clear any shading from neighboring trees to the south. This placement will also be less noticeable from the ground. Code requires at least 36” of clearance around the panels for emergency access.
I’m pleased with the way everything looks in the model, and really excited to see how it all comes together in reality. In a couple of years, I’ll be able to look back at this post and see how closely my predicted electrical consumption matched my actual use. Please let me know if you have any questions about what I’ve explained here or if I can help you with your project. Shine on!