Tag Archives: solar

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.

Noma Outdoor Solar LED Lights

I was flipping through the Canadian Tire advertising flyer this weekend and I noticed a number of solar powered LED Christmas light options. For example, here is a 200 light solar outdoor LED light kit. At first glance, it looks like the prices are a little steep for what you get. The Multi-coloured set (linked above) is $60 for 200 lights for a total length of 86 feet (two 43 foot strands).

I poked around on the Canadian Tire website just now and found the Noma 100 LED light set for $25. This strand is about 33 feet long. Two strands would be $50 and about 66 feet in total. It would seem that the lights are spaced out more on the solar LED light kits.

For only $10 more, you do get solar powered lights. Now, at the minimal cost of running LED lights, you’d probably never pay off the $10 difference in electricity consumption alone. Just think of the decorating possibilities though! You don’t need an extension cord to reach your trees outside that you want to put lights on. That’s a good savings of $10-$15 right there so maybe it is worth it to buy the Noma outdoor solar LED lights.

The biggest question I have is in the middle of December, how much daylight do you need to charge the batteries? It would really suck to get these and find out that a typical Canadian winter day doesn’t have enough daylight to charge the batteries. I’d hope to get 6 hours out of a charge too. With the sun going down around 4:30PM these days It would be nice to have the lights stay on until around 10PM.

Well, I likely won’t be buying any of these solar LED lights but at the rate my blue spruce has been growing this summer, I’ll be buying a couple more sets of the “regular” Noma LED Christmas lights for outside.

I’m not an Environmentalist!

I’m not an Environmentalist! Honest!

I’ve been finding myself spending a lot of time checking out sites like Treehugger and AutoBlogGreen over the last couple months and that has lead to me a number of other fantastic sites that are all focused on “saving our environment”. Now, I often ask myself why the heck I am reading these sites because I really don’t care about the environment. It’s not something I worry about on a regular basis and the theory of global warming isn’t something I subscribe to. Now don’t get me wrong, there are some global issues that affect our environment that need to be addressed.

Anyhoo, I’m not an environmentalist. I’m just cheap.

I keep doing all these things like converting to compact fluorescent lights, using LED Christmas lights, using a programmable thermostat to reduce energy consumption, etc. It’s all rather earth friendly (at least according to Treehugger) but I’m not doing it to save the world. I’m doing it to save my pocketbook! Heck, now I’m even thinking about how to install stuff like solar hot water heating in my house.

I guess the end result is the same though, I am helping to reduce the energy required to sustain my life style. There’s nothing wrong with that.