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Sun Volt Solar Blog

earth, the final frontier

Clean Energy, Clean Environment

We are at a cross roads in human history, we can choose to continue on as we have been, or we can make a change to improve our future and quite possibly the future for several generations to come. We are here to promote energy independence, a better environment with a higher return on investment for your hard earned money. It is what I believe in, it is why I am in the solar business.

Business Cards

13 May 08 | Sales, marketing

It seems like a small thing, but I ordered business cards the other day, take a look:

sun volt solar business card

These came from Black Bear Printing, a local outfit right here in Kerhonkson, NY. I have to say, they came out pretty good! They have a site called The Printing Den, where you can design your own card online, or upload a design for printing. Since I already had a logo and a general idea of what I wanted, I chose to use the online design application. All in all, it was pretty easy to use. I paid $48.00 plus shipping for five hundred cards.

As part of the marketing effort and generally appearing to have one’s act together, I think this is an important step.

Since this blog is about starting and running a solar business, I am going to post more about the back end business stuff since that seems to take up at least half of my time.

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13 May 08 | Sales, marketing | Comments (0)

Something to think about when calculating ROI

07 May 08 | Sales, solar thermal

In my sales manual, I have a whole section devoted to Return on Investment (ROI) for SDHW systems. Basically, it shows the money saved by reducing energy use vs. the cost of the solar system minus the incentives. I have several charts that show the different conventional fuel type and how they compare with SDHW, when the payback will be, what a payment would be on a financed system, etc. Most clients eat this up as it is the nuts and bolts of any sales presentation.

One problem I have is predicting the future price of energy. For the purpose of the sales presentation, I use a standard 2.3 percent inflation figure. As everyone knows, energy has been rising at a much higher rate than that.

I read a very interesting article on The Oil Drum about the possible future prices of a barrel of oil. It does not look good. Grant it, these guys are the peak oil gloom and doom predictors, however, it must be said that everything they have predicted so far has come to pass more or less. Based on market pressures, their analyst is predicting $200.00 per barrel oil by 2010 and a steeper rise after that. This is supported by Goldman Sachs group which states:

The possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty,” the Goldman analysts wrote in the report dated May 5.

This is a chart from Oil Drum showing predicted prices for the next decade:

price of oil forcast oil drum

As goes the price of oil, so goes the price of electricity, propane, heating oil, natural gas, food and all the other energy sources. Of course, this is a difficult concept to convey to most people because they don’t understand how much our society depends on oil to function.

The current high gas prices at the pump are only a small inkling of what is in store for the next winter’s heating season. I have a feeling that a lot of people are going to have to make some tough choices next winter.

As always, it is difficult to tell what the future has in store for us. Without being too alarmist, I try to convey to the potential client that now is the best time to install one of these systems because as the price of energy goes up, so will the price of materials. A small sacrifice now may reap large rewards later on.

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07 May 08 | Sales, solar thermal | Comments (0)

The price of Solar Energy

16 Apr 08 | Sales, Solar Hot Water

The prices of home energy in New York State, week of April 14, 2008:

  • Heating oil: $3.974/gallon
  • Propane: $2.953/gallon
  • Natural Gas: $1.413/Therm
  • Electricity: $0.175/kWh

Source: NYSERDA

The New York State Energy Research and Development Authority (NYSERDA) tracks energy prices with in the state and posts them to the Energy Prices and Supplies page of their website.

This is a great resource for the renewable energy dealer/installer as it allows you to make direct comparisons to the cost of solar energy. The logical way to do this would be to divide the systems projected lifetime production by the net capital cost.

Example:

A solar hot water system is purchased in Ulster County, NY. It consists of flat plate collectors totaling 80 Ft2, a tank and some miscellaneous pumps, piping, valves etc. The expected lifetime of that system is 30 years ±5 years.

A check of the NREL insolation maps indicates that Ulster County receives 4.4 kWh/M2 per day. Convert 80 Ft2 to M2 (80 Ft2 x 0.09290304=7.432243 M2) The above solar array should expect to produce 4.4 kWh/M2 x 7.432 M2 = 32.701 KWh per day, less efficiency and losses, which total around 60%. Therefore, the above solar system should be expected to produce 32.701 kWh x 0.40 = 13.08 kWh per day, without shading.

Yearly that adds up to 13.08 kWh x 365 days = 4774 kWh/year. 4774 kWh x $0.175 = $835.51 per year. Thus, this home owner can expect to save $835.51 per year in electricity costs.

The net system cost is the installed cost minus the tax incentives, or $7,500.00 - ($7,500 x 0.3 (≤$2,000)) - ($7,500 x 0.25 (≤$5,000)) = $7,500 - $2,000 - $1,875 = $3,625.00

If this system were paid for with 60 month loan:

Principal amount: $3,625.00
Payment amount: $71.61
Interest rate: 6.900%
Interest compounding: Monthly
Total payments: $4,296.51
Total interest: $671.51

Total system cost $4,296.51

Simple System payback $4,296.51 ÷ 835.51 = 5.1 years.

Simple system savings, without utility rate increases, 25 years x $835.51 = $20,887.75 (this is likely low by about $5K).

Therefore, the cost of heating your water with solar is the amount of energy saved, multiplied by the life of the system, divided by the cost of the system, or: 4774 kWh x 25 years = 119,350 kWh. $4296.51÷119,350 kWh = $0.036/kWh.

The cost of solar hot water vs electric hot water is

3.6 cents vs 17.5 cents per kWh.

The average rate of CO2 emissions during electricity production is 1.34 pounds/kWh (source, US Department of Energy). Therefore, the above system will save 119,350 kWh x 1.34 = 159,929 pounds of CO2 emissions, or about 80 tons.

To give you an idea of how much that is, it equates to about

  • 130,000 vehicle (average car) miles
  • 101,000 vehicle (large SUV) miles
  • 347,000 train (AMTRAK, light rail or subway) miles
  • 266,000 air miles
  • 61,500 tractor trailer (heavy truck) miles (loaded)
  • burning 7,175 gallons on heating oil
  • burning 40 tons of coal

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16 Apr 08 | Sales, Solar Hot Water | Comment (1)