Tag Archives: real world

Natural Gas Standby Generator

I was recently looking at natural gas standby generators on the Costco website. Given the current electricity rates during peak Time of Use hours, I then started wondering what the cost per kWh was for a natural gas standby generator. Especially considering how low the natural gas prices have been.

So let’s do some math. Fun!

According to EnergyShop.com, natural gas is currently 25.04¢/m³ in my area. That includes all of the “add ons” that are over and above the posted natural gas rate. It excludes taxes though. As we saw before, your real electricity rate is not the same as what is “advertised” by Hydro One. We need to add in a number of extra charges to get the real rate. With the recent switch to the summer Time of Use pricing, the advertised rates increased.

Based on the current Hydro One Residential Delivery Rates, the real Time of Use prices are (based on Urban High density) 12.01¢/kWh for off-peak, 15.24¢/kWh for mid-peak and 17.18¢/kWh for peak usage. Again, these are the rates without taxes added (and minus some monthly charges that don’t translate well into a per kWh price).

So, let’s take the Generac 17 kW Standby Generator that is available on the Costco website, and figure out the cost per kWh. According to the website, it is capable of producing 16kW using natural gas and consumes 6.9m³/h at full load. So, that translates to 2.32kWh/m³ at full load. Given the current natural gas rate in my area, that means the standby generator costs 10.80¢/kWh.  WHAT?

Well, hang on, let’s not get too carried away with this. Natural gas prices are currently at all time lows.  Let’s see how much it would cost with the ~50¢/m³ that we were paying a couple years ago.  At that price, the generator costs 21.55¢/kWh to run.

Let’s not forget about the cost of the generator – $3699.99 plus around $1000 of installation/other costs (based on some rough numbers I found while Googling). To cover that, you’d have to run the “standby” generator at full load during Time of Use on-peak time for about 67142 hours all while hoping that the natural gas price doesn’t go up. Oh, and don’t forget that peak time is only for about 6 hours a day and only 5 days a week.

Oh well, that satisfied my curiosity.

Well, almost.  I poked around a bit and found a couple industrial natural gas generator sets. Unfortunately most of the large scale (2500kW – 3000kW) units I found didn’t have fuel consumption values. The $500k for a used (with no warranty) 3000kW generator set was interesting. (Yikes!)

I did manage to find the Kohler Power 400RZX which is 400kW natural gas generator. It’s capable of around 3.3kW/m³ at full load or a cost of 7.5¢/kWh. Of course, no price is listed so I’m going to assume its payoff time would be greater than the 67000+ hours of the Generac unit.

Solar Hot Water vs Natural Gas Hot Water

Natural Gas FlameToday we will do a cost comparison of solar hot water and natural gas hot water. This is the third part of the Should I Install Solar Hot Water? series. Yesterday we looked at Solar Hot Water vs Electric Hot Water.

Background

Currently in eastern Ontario, you can have a solar hot water system installed for about $4000-$4500 after all of the rebates and incentives. While this is a huge discount from the roughly $9000 regular cost, does a solar hot water system actually make sense financially?

The Numbers

The typical solar hot water system (EnerWorks 2 panel system) we have been using in this series can produce about 2800 kWh/year of hot water here in eastern Ontario. This of course is when it’s installed in an ideal location/orientation.

According to the ACEEE, a high efficiency natural gas water tank is 65% efficient at converting natural gas into heat.

The current combined price of natural gas in Ontario is approximately $0.3022/m3. That’s $0.2354/m3 for the gas with a price adjustment of -$0.0616/m3 plus delivery of $0.1285/m3.

Now, price per cubic meter is fine and dandy but we need to convert to kWh to make this easier. A quick Google search tells me that 1 m3 of natural gas is roughly equivalent 10.5 kWh (it varies but we need a number to work with).

This is a little more difficult than the electric hot water example so I’ll show the steps so I don’t screw anything up and so you can check my math. :)

Our example 65% efficient natural gas hot water heater needs to consume 4300 kWh to produce the equivalent 2800 kWh/year that the solar hot water system can produce.

2800 kWh / 0.65 = 4300 kWh

4300 kWh is approximately 410m3

4300 kWh / 10.5 kWh per m

3

  = 410m

3

And 410 m3 costs about $124 at current market prices in eastern Ontario.

410 m

3

 * $0.3022/m

3

 = $124

Therefore, if you are reducing your natural gas bill by $124/year, it will take you between 32.24 to 36.29 years to recover the costs ($4000 – $4500) of the solar hot water system and start saving real money.

Over 30 years to recover the initial investment? The lifespan of a solar hot water system is only “over 20 years” which means you could easily still be paying for the thing after it’s been replaced.

Of course, that is using current natural gas pricing which is extremely low. It dropped more than $0.10/m3 as of April 1, 2009 and the summer prices are usually much lower.

When would it make sense to install solar hot water with a natural gas system?

Using the examples above, the combined natural gas price would have to reach almost $1.00/m3 before a solar hot water system could pay for itself in 9 years. $0.50/m3 is definitely a possibility in the near future (if I remember correctly, last winter was just shy of $0.40/m3) so the payback period starts to get closer to what it currently is with electric hot water heating.

Now, for my particular house, I’ll don’t think I’ll ever install a solar hot water system for domestic hot water. We have a Polaris high efficiency gas hot water tank that we use for both our domestic hot water and for heating the house. That puppy is 95% efficient. At today’s natural gas prices, it would take about 50 years to recover the initial investment in a solar hot water system.

In a future post, I’ll explore the difficulty of designing a solar hot water system to augment a combined natural gas heating system like we have.

Image Credit- ARRG.ch

Solar Hot Water vs Electric Hot Water

Solar ElectricToday we will do a cost comparison of solar hot water and electric hot water in eastern Ontario. This is the second part of the Should I Install Solar Hot Water? series.

Background

Currently in eastern Ontario, you can have a solar hot water system installed for about $4000-$4500 after all of the rebates and incentives. While this is a huge discount from the roughly $9000 regular cost, does a solar hot water system actually make sense financially?

The Numbers

On average, 25% of your total household heating costs are for heating water. In eastern Ontario, solar hot water systems can produce an average of 50-60% of your household hot water needs.

The typical solar hot water system (EnerWorks 2 panel system) we have been using in this discussion can produce about 2800 kWh/year of hot water here in eastern Ontario. This of course is when it’s installed in an ideal location/orientation.

According to the ACEEE, an electric hot water tank is 95% efficient at converting electricity into heat.

The current combined price of electricity in Ontario is approximately $0.095/kWh. This price is the base $0.055/kWh plus all of the other charges that are billed on a per kWh basis.

Therefore, the 2800 kWh of hot water that the solar system can produce will replace approximately 2950 kWh of electricity per year. At $0.095/kWh that is a grand total of $280.25/year in potential savings over a typical electric hot water tank. If you are reducing your electric bill by $280.25/year, it will take you between 14.27 to 16.1 years to recover the costs ($4000 – $4500) of the solar hot water system and start saving real money.

Of course, that is using current electricity pricing which is extremely low.

So, should I never install solar hot water?

Hell no! I’m all for solar hot water and I’m still a little sad that it doesn’t make economic sense given the current market pricing. Now, if the combined electricity price jumped to $0.15/kWh then we would get the approximately $444/year savings required for a 9 year payback of a $4000 investment. Will the prices get to that level? I’m willing to bet it’s going to happen, just not this year. Probably not next year either.

Electricity costs are going to rise. At the same time, as electricity costs rise and more people start to demand solar hot water system, the initial cost of a solar hot water system will likely drop.

Would you install a solar hot water heater if electricity prices went over $0.15/kWh?

No. Unfortunately (well, fortunately) I don’t heat my water with electricity. I use natural gas. Using natural gas to heat is quite a bit cheaper than electricity and that makes the payback period even longer.

Next we are going to look at solar hot water vs natural gas hot water.

Image Credit – Yellow.Cat

Should I Install Solar Hot Water?

Solar PanelsShould I install solar hot water? This is a question I have been asking myself for almost 4 years now. Basically, as soon as we purchased the house I started wondering if it made sense to install a solar hot water system. The biggest reason was due to the fact we heat with hot water. I’ve spent many days and nights reading information on the internet and researching what the best options would be. I was thinking we might be able to get some added benefit out of heating with the sun. So, should I install solar hot water?

The short answer is – No.

This is the first post in a series. I’m trying to break up the information into more relevant chunks as I’m going to look at comparisons with natural gas and with electric hot water.

The Sales Pitch

You can read a lot about solar hot water online. Usually there will be claims of saving over 50% of you hot water heating costs. With the dollar savings mentioned, there is usually some great graphics about how much you are going to reduce your green house gas emissions. By using the ecoEnergy program in Canada, and with the 2009 Home Renovation Tax Credit, you can actually save $5000 (or more) off the cost of installing a solar hot water system.

But, you’re still looking at shelling out around $4000 for a “typical” solar hot water system.

What is a “typical” solar hot water system?

Here in eastern Ontario, a typical system would be something like the EnerWorks 2 panel flat plate collector system. You can get this system installed for about $9000 but with the current rebates and incentives, that gets down to $4000-$4500. This is suitable for a typical family of 4 that consume an average of 240L of hot water per day.

In this typical configuration in eastern Ontario, the EnerWorks 2 panel system can produce about 2800kWh/year of heat energy when installed in the optimal configuration (proper pitch and direction, minimal shading, etc.). This should provide an average of 60% of your household hot water needs.

But solar hot water is good for the environment!

Uh, it might be time for you to stop reading now. I’m not really concerned with the “green” aspects of solar heating. I’m not an environmentalist and I’ll never claim to be. I am cheap though and sometimes being cheap has “green” side effects.

How much will I save with solar hot water?

This is what I’m interested in. I want to know how much money I will potentially save by installing a solar hot water system. The first number I want to know is the monthly savings but the real number I want to know is how long will it take for the solar hot water system to pay for itself. What is the payback period?

The lifespan of an EnerWorks 2 panel system is “over 20 years”. Well, that means we need to have the thing paid off well before the 20th year. Ideally, you want your money back in 9 years or less. Why 9 years? Well, we want the investment in a solar hot water system to payback at a decent rate. If the payback period is to large, we would have been better off putting our initial investment into a regular mutual fund, bonds, etc.

The rule of 72 tells me that an investment at 8% will double in 9 years. 8% interest is pretty easy to average with decent mutual funds.

So, our initial investment of $4000-$4500 in a mutual fund at 8% would be worth $8000-$9000 in 9 years. We need our solar hot water system to payback in the same time or less. If it doesn’t, we’re not making our money work for us in the best possible way.

Remember, I’m looking at this from the purely financial point of view.

In the simplest view, take that $4000-$4500 initial cost and divide it by 9. That gives us approximately $444 – $500/year. Therefore we need a solar hot water system to save us at least $444 – $500/year or $37-$42/month.

Tomorrow we’re going to look at how solar hot water compares to electric hot water.

2006 Pontiac Vibe Gas Mileage Updates

In the next few weeks, my 2006 Pontiac Vibe gas mileage updates will be coming to an end. We are going to be getting rid of the Pontiac Vibe as our family needs a larger vehicle now. The Pontiac Vibe gas mileage tracker will remain online and I’ll make sure I update the information one last time. I’ve got a bunch of gas receipts that need to be entered.

The Pontiac Vibe has been a fantastic car for us and we’re really sad to be giving it up. Unfortunately, it’s the car that is better for us to get rid of at the moment. We’re replacing it with a 2009 Dodge Grand Caravan (the deals are just too good right now!).

2006 Pontiac VibeI would have no problem recommending the Pontiac Vibe as a fantastic car for a couple or for a small family who has kids out of car seats. It’s also a great second car for commuting or piling everyone into for a short drive to the corner store or park. Our problem is we have two young kids in car seats and a stroller. Once you put the stroller in the back of the Vibe, you’re not going to be doing much shopping as there isn’t a whole lot of space left. With the two kids seats, the car is really a four seater. It’s impossible for us to go pickup anyone at the airport as a family. There just isn’t room for a person to sit in the middle between the two car seats.

When we return the Vibe, it will have just shy of 96000km on it.  We’ve had absolutely no issue with it.  It even still has the original brake pads and rotors on it and they are in fantastic shape! It was 85-90% highway driven and maintained according to the recommended schedule.

And hey, if you’re in the market for a used 2006 Pontiac Vibe and you know me, give me a shout and maybe we can work something out. :) I’ll even toss in the barely used winter tires on rims, the roof rack and the trunk carpet.