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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.

The Truth about Offshore Oil Drilling

04 Aug 08 | Commentary, Conservation, Environment

You have been hearing all sorts of things about drilling for oil offshore. The White House insists that it is the answer to at least some of our energy problems. Various news organizations have put out some interesting, if not slightly contrary and confusing stories on the subject.

I thought I’d boil it down to U.S. product vs. U.S. consumption.

Oil is a world wide market commodity, which means just because it was produced in the U.S. doesn’t mean it will be used here. Think of it as a huge jug with a bunch of straws stuck in it. Everyone sucks out what they need and then pays for it. That being said, I am going to analyze this as if it where only a U.S. problem, e.g. all oil produced, including the new offshore oil, will only be used in the U.S.

The offshore oil facts:

  1. The U.S. Department of Energy (DOE) proven non-producing reserves are 5.2 billion barrels (5,147,000,000) of oil. Some estimates show about 18 billion barrels (18,000,000,000) of recoverable oil in the offshore areas currently closed to drilling. Other estimates are much higher, about 78 billion barrels. For sake of argument, we will use The President’s numbers (18 billion).
  2. The U.S. currently uses 20.68 million barrels (20,680,000) of oil per day. This is projected to rise at 1.4% per year (source: DOE).
  3. The U.S. currently produces 5.064 million barrels (5,064,000) of oil per day. This is decreasing by about 1% per year (source: DOE)
  4. At current use rates, drilling in the offshore areas currently closed would provide about 2.4 years of oil (18,000,000,000 bl ÷ 20,680,000 bl/day = 870.4 days or 2.4 years ).
  5. It will take at least 10 years to bring the first oil well on line, by that time we will be using 23.77 million barrels per day and producing 4.58 million barrels per day. By this math, the new reserve could supply 938 days (18,000,000,000 bl ÷ (23,770,000 bl/day - 4,580,000 bl/day = 19,190,000 bl/day) = 938 days) or ~2.6 years of oil including current production.

Any way you slice it, clearly we have a problem. Drilling in offshore areas will give us 2.6 years of oil. The Arctic National Wildlife Refuge (ANWR) is though to contain about 10.4 billion barrels of oil. If drilling were allowed there, it would add 503 days (~1.4 years) to our oil supply.

Thus, the total Bush energy plan would add ~4 years of crude oil to our dwindling supply. Clearly not a long term plan. Even if we allow for reduced consumption due to higher prices, the outlook does not look good. During the first part of 2008, gasoline usage dropped by 1% over the same period in 2007. Overall demand for light sweat crude fell by about the same amount. For all the hullabaloo about high prices, not much of a dent.

Start thinking about this, plan ahead and be prepared. Perhaps nothing bad will happen, perhaps somehow energy use will be properly managed and everything will be okay…

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04 Aug 08 | Commentary, Conservation, Environment | Comments (0)

Central Hudson is requesting a rate hike

29 Jul 08 | Solar Electric

In one of the stranger press releases I have read in a while, Central Hudson Energy Group (NYSE:CHG) states:

Higher energy costs induced our customers to use less energy… the weakening economy has further induced our customers to use less energy… As a result, we believe it is necessary and prudent to take two actions. First, we are reducing our earnings guidance for 2008, and second, we are filing a utility rate case to bring our revenues into line with the costs to serve our customers. (emphasis mine)

Which is interesting in a way. The stock holders of a publicly traded company expect a certain payout over time, the utility company does everything in it’s power to provide that payout, including reducing line men and support staff, ect. However, when the economy really hits the floor and people begin conserving electricity so they can still pay for it, it is time to ask for a rate increase. Nice. By the way, I am already paying ¢16.8/kWh. How much higher can it go?

This is the problem with a publicly traded utility company. The most important thing is not the customer or the quality of service, its the bottom line on a P&L. It is more important to the CEO and the board of directors to keep the stock value high so they can get their yearly bonus and retire to Martha’s Vineyard than to provide good, reasonably priced electrical service to the community.

So, what is a homeowner to do? If you have read this blog, you already know the answer to that. Take control of the situation and be your own power company. Photovoltaics are looking more and more competitive these days especially with the state incentives available. As energy prices continue to rise and PV prices either stay relatively the same or drop, the utility companies will find themselves competing head to head with renewable energy products. They may find that they are pricing themselves out of a customer.

Update: It looks like they are filing for 3.5% increase on electricity and 10% on natural gas.

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29 Jul 08 | Solar Electric | Comments (0)

National Grid petitions to Raise Electrical Rates by 21.7 percent

04 Jul 08 | Conservation, Solar Electric, Solar Hot Water, Wind Power

Here it comes; the high price of fossil fuels are driving up electrical rates just like everything else.  I read that headline in Rhode Island over the holiday weekend.  How soon until Central Hudson and NYSEG follow suit? How will this impact your family’s budget? 

Current fuel prices in the Hudson Valley (via NYSERDA) are as follows:

  • Electricity: ¢17.1/kWh
  • Natural Gas: $1.68/CCF
  • Propane: $3.149/gallon
  • Home Heating Oil: $4.809/gallon
  • Kerosene: $5.077/gallon

I am very concerned about home heating this coming year.  Many families may need to choose between heating and eating.  Not a pleasant thought.

There are some things that can be done to reduce heating and electrical costs.  I strongly recommend that people start now by

  1. Adding insulation to the attics, walls and floors.
  2. Seal up any outside air infiltration with calks and foam fillers.
  3. Replace old single pane windows and doosr with new energy efficient units.
  4. Have you furnace or boiler serviced.
  5. Replace old inefficient boilers or furnaces with newer more efficient models.
  6. Replace old inefficient appliances such as refrigerators, air conditioners and dishwashers with newer energy star rated models.
  7. Employ energy saving devices like programable thermostats.

Many of these items will pay for themselves with the money you save in a year or two.

If you have done all those things and still want to reduce you energy usage, look into renewable energy systems such as Solar Thermal, Photovoltaics and Wind Power to generate home energy.

Installing such systems can save you lots of money and free you from worrying about rate hikes and fuel costs in the future.  At current equipment and energy prices, a solar domestic hot water system (SDHW) will pay for itself in 4-5 years.  A photovoltaic system will pay for itself in about 8-9 years.

Interest rates are very low.  If you choose to finance you system, you loan payment will likely be lower than potential savings, meaning you will see a an immediate decrease in expenses.  You may also be able to write off the interest on a home equity loan as these systems are capital improvements.  Of course every situation is different and tax matters are best discussed with an accountant or tax preparer.

If you have any questions, contact us, I’d be glad to discuss your options over the phone.
 

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04 Jul 08 | Conservation, Solar Electric, Solar Hot Water, Wind Power | Comment (1)