By Jeffrey Yago, P.E., CEM

Issue #78 •

Are you planning to install a solar photovoltaic system to reduce your utility bills? How would you like it if your first solar electric power system had invisible solar panels, produced just as much free power at night as in the daytime, cost substantially less than any other system currently on the market, and was never affected by bad weather? Sound too good to be true? Actually, there really is something that does this, and it should be the first thing you buy before considering the purchase of any other solar power system.

Multiple wall transformers being metered

It all started when I was asked to install a solar photovoltaic system on a couple’s home. They lived in a typical 1,500-square-foot, three-bedroom home with attached garage, located in the suburbs of a large city. Their electric bills were getting higher and higher, and that south facing roof of their garage was just perfect to mount a solar photovoltaic array like they had been reading about. There are many different types of solar power systems, but most require batteries, a generator, and lots of controls and wiring modifications.

A new trend in solar installations is the packaged grid-tie system. These systems are easy to install and will reduce your electric bills, but they do not provide any backup power if there is a utility outage. Since by definition, the utility grid is the “battery bank” to absorb the solar electricity produced by the roof mounted solar array, this system cannot function if the utility grid is not operational. These systems consist of a roof mounted solar array, an inverter usually located on an outside wall next to your electric meter, and cables connecting the roof array to the inverter and the inverter to the home’s electric panel. Since there are no batteries, these systems take up little or no interior floor space and can be installed in less than one day.

In most southern latitudes of the United States, you can expect a solar photovoltaic system to generate power for about five hours per day in the summer months and four hours per day in the winter. A more northern latitude may only produce full power for four hours in the summer and three hours in the winter. These systems will still generate some power during the non-peak sun hours, before 9 a.m. and after 3 p.m., but these are reasonable monthly averages considering some days may not have any solar collection at all due to overcast skies.

Typical solar system costs

Fax machine using 11 watts during standby

If you live in a state that requires the local electric utility to purchase excess solar generated power, you can install a typical 2400 watt (DC nameplate rating) solar photovoltaic system which will cover about 250 square feet of South facing roof area. This system would actually transfer about 2,000 watts of 120 volt AC power into the grid after efficiency losses. This averages 8 kWhs per day (2000 watts x 4 hrs/day) or 240 kWh/month.

Since the electrical consumption for single family homes in the United States averages 1,000 kWhs per month, this grid tied solar system will only offset part of the total metered electricity. However, there may be many sunny afternoons when no electrical loads are operating in the home and the solar system can transfer all of its output back onto the utility grid. If your local utility allows these connections, they will provide an electric meter that will separately record the electric flows in both directions.

Although many electric utilities at best only grudgingly accommodate customers wanting to sell electricity back to the grid and will try to credit this “sell back” electricity at the lowest rate possible, some electric utilities in the United States are at system capacity during summer air conditioning and promoting these individual solar electric systems could help reduce their system afternoon peaks. Some states and utilities are offering rebates and “buy down” programs to encourage the installation of solar systems. If this is available in your area, be sure to include this credit in your cost analysis which can substantially reduce the payback period.

Now lets review my client’s situation in more detail from a cash flow point of view. The solar PV system they want to purchase will produce 2,000 watts (AC) after power conversion losses and will cost $16,000.00 or about $8.00 per watt, not including installation. This is fairly typical for a complete packaged system in this size, although the unit cost for solar modules has dropped to below $4 per watt for large quantity commercial installations.

Alternate plan

Table lamp with 26 watt compact fluorescent light

What would happen if our homeowners took less than one-quarter of the $16,000.00 they were about to spend and purchased something that would give them the same monthly utility savings? What would reduce their electric bill the same 8 kWhs per day as the solar system? We soon found out by inspecting their home and making a list of their lights and appliances. They had a 12-year-old refrigerator that consumed 2.7 kWh of electricity per day. We also noted that all of their light fixtures had 75 or 100 watt incandescent bulbs resulting in over 213 kWh per month electrical consumption just for lighting.

Their 10-year-old dishwasher consumes 300 gallons of hot water per month (based on 6 loads per week). Their older model clothes washer consumes 700 gallons of water per month (based on 4 loads per week). The energy to heat this water represents almost 90% of the total energy usage for a standard washing machine and 80% for a standard dishwasher. Their old style electric hot water heater had outside surfaces that were warm to the touch which indicated minimum tank insulation was causing high standby losses.

Metered data

Our test metering of their audio/video equipment indicated that it was consuming a total of 9 kWh per month when turned off, just to keep all of the components ready to respond to their individual remote controls. We also found several “wall wart” type plug in transformers for cell phone and pager chargers that were not charging anything. There were also other electronic devices not being used but still consuming power including two portable phones, a phone answering machine, and a clock radio. These devices were metered at 2 to 3 watts each which sounds insignificant but remember, these loads are operating 24 hours per day, 365 days per year, resulting in a total electrical consumption of 15.1 kWh per month for these standby loads.

There should be no incandescent bulbs after your lighting replacement.

We metered their fax machine at 11 watts in standby mode, which is actually low since we have found many fax machines consuming over 18 watts when not in use. Fax machines are considered a 24-hour per day load, but substantial utility savings can be realized by plugging a fax machine into a wall outlet timer. By limiting the operating hours to a typical 9-to-5 business day when most faxes are sent, the operating hours would be reduced from 8,760 hours per year to 2,920 hours per year, a savings of over 64 kWh per year. Another added benefit for this change is a reduction in the number of faxes you receive in the middle of the night advertising free Florida trips and toner cartridge replacement deals.

We all soon realized that it would be more cost effective to replace all low efficiency appliances and lighting in their home, than to keep everything the same and install a solar system just to offset their power losses.

We decided not to worry about replacing the small appliances that only operate a few minutes per week, since their minimum run-time limits the impact of any load reduction technology we could apply to them. Examples of appliances we could not justify replacing included the kitchen blender, electric can opener, and garage door opener.

We began our study by creating an inventory of their main appliances and lighting fixtures to evaluate the utility savings and related costs if they were replaced.

These utility comparisons, which appear in the table, show how implementing these appliance and lighting changes would save an average of 300 kWh/month. This is greater than the estimated 240 kWh/month utility grid sell-back savings generated by the planned solar photovoltaic system.

Action plan

New ceiling fixture with two 13 watt compact fluorescent lamps

After considering this analysis, the homeowner replaced the clothes washer, dishwasher, refrigerator, and electric hot water heater with new, super efficient models at a total cost of $2,400. New Federal energy efficiency guidelines for appliances went into effect for refrigerators in 1993 and for dishwashers and clothes washers in 1994. Efficiency guidelines for many other appliances have gone into effect since 1997. If your appliances were purchased prior to these dates, you can assume they have low energy efficiencies. Do not make the mistake of relocating your old refrigerator to the garage or basement as your beer cooler, as this will be the highest energy wasting appliance in your home. All appliances and light bulbs that you replace should be given to charity or recycled.

All incandescent ceiling lighting fixtures in the bedrooms, family room, living room, corridor, and stairwell were replaced with fixtures designed to use dual lamp 13-watt compact fluorescent PL style tubes. All incandescent bathroom lighting fixtures were replaced with fixtures designed for recessed 50-watt halogen PAR 38 style lamps. The 100-watt incandescent bare bulb light fixtures in the garage were replaced with a dual tube 4-foot fluorescent fixture having T-8 low energy fluorescent tubes. Be sure any fluorescent lamp or tube you buy has a “warm” color temperature rating, which will duplicate the color quality of an incandescent bulb. This is especially important in bathrooms and kitchens to avoid making cosmetics and foods appear off color.

I also recommend purchasing all light fixtures and replacement fluorescent lamps from a lighting distributor, as there are many low cost imported brands entering the market with low quality and short lamp life. My house has all fluorescent and halogen lighting fixtures and I have yet to change a bulb since moving in 1994. How many incandescent bulbs do you buy each week?

All outdoor incandescent porch and flood lights were changed to 40-watt halogen and put on motion sensor or photocell control. All bathroom and corridor light fixture wall switches were replaced with easy to install infrared motion control wall switches.

Installed motion controlled light switch

All cell phone, pager, and portable phone chargers were relocated to a common switched strip outlet “charging center” which is now manually turned off when not in use.

All audio and video equipment were plugged into a switched wall outlet so all of this equipment could be turned completely off by the room wall light switch when not in use. The exception for this is any satellite receiver that is required to stay connected for remote billing purposes.

Finally, all family members agreed to increase their efforts to turn off lights when not needed, to stop operating the dishwasher or clothes washer for partial loads, and not to let the hot water flow from faucets and showers any longer than necessary.

Replacing 16 ceiling light fixtures and 51 incandescent bulbs with high efficiency compact fluorescent and halogen lamps was going to cost $1,200.00. Adding this to the appliance replacement costs, gives a total lighting and appliance replacement cost of $3,600.00. Although not an insignificant amount of money, this was $12,400.00 less than the $16,000 they were about to spend for a solar electric system. The remaining balance would easily pay for a new fuel efficient car.

I realize this was not a true investment analysis since we are not including the life cycle replacement cost of the appliances or the time value of money in these calculations. However, my goal was to demonstrate the importance of having the most energy efficient appliances and lighting fixtures in any home before investing in a solar electric power system. Otherwise, you will end up installing a very expensive solar electric system that only makes up for the losses of your low efficiency lighting and appliances you chose not to replace.

Most new homes usually include low cost standard efficiency lighting fixtures and appliances to keep the total home sale price within budget. If you are currently building a new home or about to purchase a home under construction, be sure only the highest efficiency lighting fixtures and appliances are installed. There should be no incandescent bulb fixtures or incandescent bulbs remaining anywhere in your home after a lighting upgrade, except for a decorative chandelier you may decide to keep. The increased cost for high efficiency lighting and appliances over standard efficiency contractor grade equipment will quickly pay back the difference in lower utility bills.

It was my goal to only consider energy saving modifications that you could make on your own without hiring an installation contractor. There are many additional modifications you could make that would also produce similar utility cost savings, but most require the services of an installation contractor and involve much higher initial costs. These major modifications include replacing any low efficiency air conditioning system, furnace, heating boiler, or well pump that is over 15-years-old; adding additional attic insulation; replacing all single-pane windows with thermal windows; and installing awnings or sun screening on any large east or west facing window areas.

Tracking your utility costs

Only two 50 watt halogen flood lamps easily illuminate a large bathroom.

Finally, do not just pay your monthly utility bills and discard. Keep a small notebook to record not only the dollar cost, but also the kWh of electricity, and the MCF or gallons of gas or oil consumed each month. Be sure to use the meter start and end read dates, not the billing date, to determine which calender month each bill most closely represents. Due to fluctuating fuel costs, you cannot compare utility billing dollar costs from year-to-year, but you can compare utility consumption from current month to the same month in prior years.

If a particular month was unseasonably hot, cold or rainy, you should indicate this in your utility notebook for that month. This will be helpful in future year-to-year comparisons. Be sure to collect this utility billing data for the 12 months prior and 12 months after your own appliance and lighting replacement project to compare the results. If you no longer have these actual bills, contact your local utility for copies.

When recording your monthly utility bills, also calculate the unit cost, which is the total dollars due divided by total unit consumption. You will be amazed how they have added all kinds of state sales taxes, city utility taxes, transmission charges, utility surcharges, community benefits charges, distribution charges, fuel escalating charges, base meter charges, and demand charges to your base utility bill. You will find that this true unit cost is much higher than published rates for your local utility, as many utility bills are becoming a very convenient way for the government to raise hidden tax revenue without actually raising taxes.


By knowing your true monthly utility costs and the actual energy consumption for your home, you will have a much better basis to determine how quickly any future appliance replacement or solar photovoltaic project would pay back their initial installation costs. This unit cost information is extremely important in your decision making as some readers will be living in states having electric rates below 6 cents per kWh while others may be paying over 12 cents per kWh.

Light bulb and appliance costs are about the same from state to state, but the utility cost savings for implementing the same utility saving project could be double or triple from one state to another due to different utility rates. Do your homework and start tracking your own true utility costs. You may find it is not only time to install my “phantom” solar system, but a real solar system as well.

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