How to save the planet (and my wallet) one electron at a time

My last quarterly electricity bill showed that the price of electricity had gone up by 10% fro 1 June, and the price hikes are expected to continue for many years. The $800+ quarterly bill showed that our daily household electricity consumption is around 48 kWh a day - which is much higher than the 'typical' household usage figure - so it is worth looking for areas where we can save power. I made up a list of all the electricity consuming devices in our home that I could think of, and used average hourly 'cost-to-run' figures and our estimated hours of use each day to calculate where our electricity was being consumed:

The grand total was surprisingly close to our actual bill, and it is immediately obvious what the most power-hungry devices are, and which devices get the most use. Some of these are definitely needs rather than wants (for example, turning off the fridge/freezer wouldn't be a smart move), and some of the power-hungry devices are used very little, so there isn't much scope for saving electricity. However, the stand-out items that are ripe for making significant savings are our computers (currently often left running all day and night) and the reverse cycle air-conditioning/heater.

Simply shutting down all our computers at night apparently could save around $50 a month! We could also save a significant amount by running the a/c intermittently, and wearing a jumper indoors, although that might be a tougher sell for DW and the kids. After those items it gets harder to find significant savings, but running the swimming pool filter for a shorter period (especially in winter when it's not being used), turning off the TVs when no-one is watching them during the evenings, and making sure lights are turned off in unoccupied rooms could save another $10 a month (although a cold, dark, silent house would be depressing). All up, we might be able to cut our power consumption by 20% with a few simple changes in our behaviour. Every little bit will help, as our supplier charges $0.1753 per kWh for the first 19 kWh/day, and the price rises to $0.255 per kWh for higher usage.

Another potential way to cut our power bill is to have a photovoltaic (PV) power generation system installed. A typical 1.5 kWh system (six panels) with an inverter costs around $13,000 installed, but, due to government rebates and credits, some providers have such systems advertised as 'from' $1900. However, the fine print adds in a couple of hundred dollars for 'extras' (such as installation on a tiled roof ($300), or a metal frame to install the panels at the correct angle on a flat metal roof, such as my garage ($300)), and for that price you also have to arrange and pay for the 'feed-in' smart meter to be installed by the electricity company (around $500). Our local government council also doesn't class PV systems as an 'exempt' development, so I'd have to put in a development application and have it approved (takes ~4 weeks) before signing a contract for the PV system. Fortunately the DA for a solar power system 'probably' won't cost anything according to the council planning department. So, all up, a 1.5 kWh system should cost me a bit under $3,000.

In Sydney the system should produce 5.85 kWh each day on average (the supplier quotes 7.3 kWh/day but I prefer to believe the official government 'green energy' website), which will earn $0.60 per kWh using a gross feed-in meter. That $3.85 a day adds up to around $1,400 each year, so the pay-back period should only be 2-3 years. The feed-in rate is fixed until the end of 2016 in NSW, so after the system has paid for itself we should 'make' about $1,400 a year for the following four years. After that the situation isn't so clear, as the feed-in tariff is likely to be cut to be closer to the usage cost. Once that happens the PV system output will cut our net electricity consumption by around 15%-20%, so there will be some ongoing benefit. The system has an expected life of 25+ years, although the PV cells lose around 0.5% efficiency each year.

I've also considered buying a 'heat-pump' water heater to replace our current 'off-peak' electric water heater (which is getting close to replacement age anyhow). However, even with the $600 government subsidy on heat-pumps, the new system would cost over $1,000. And apparently installing the 'smart meter' required for the PV system doesn't mean you automatically lose access to off-peak electricity (according to the electricity company rep), so it wouldn't be worthwhile having a heat-pump system (using electricity at $0.17 per kWh) replace the current off-peak system (using electricity at $0.076 per kWh). If it turns out that having the PV system installed does result in the removal of our off-peak electricity supply, I'll have to reconsider getting the heat-pump.

It will be interesting to see how well our energy saving efforts work out, and how convoluted, lengthy and expensive if turns out to be to have a PV system installed. I'll keep you posted on developments.

In a couple of years I'll be able to work out our actual savings - both in dollars and 'black balloons' of carbon dioxide emissions.

Subscribe to Enough Wealth. Copyright 2006-2010

I'm happy to save the planet - if the government (taxpayer) is paying for it

Our 315L electric water heater is pretty economical, as off-peak electricity only costs 5.2c per kWhr, but it still accounts for almost 1/3 of our total electricity consumption and a significant part of our quarterly electricity bill. Since the hot water tank is at least eight years old, which is close to the age at which they are prone to start leaking due to corrosion, I'm looking at replacing our existing system with a new "heat pump" system. A 315L domestic heat pump water heater is very expensive to purchase compared to a traditional electric water heater, costing around $3600, but the Federal government recently increased the rebate available for such systems from $1000 to $1600 and there is also a state government installation rebate and the value of the systems RECS rating which all together should reduce the purchase cost to around $300. Installation costs should be similar to that for a conventional system, so due to the government rebates the heat pump should pay for itself through reduced electricity bills in just two or three years.

I'll double check my figures and the fine print relating to the state and federal government rebates before placing an order, but it appears that the ROI on buying a heat pump is very attractive - but only due to the government rebates available. It's very nice that I can help save the planet (supposedly) by reducing our greenhouse emissions AND save money by doing so, but I'm not sure that this rebate program is the most effective use of taxpayer funds to reduce CO2 emissions.

The other government rebate available is $8,000 towards a $13,000 roof-top solar polar grid-feed system. I'm not sure that our house is suitable for such a system, due to the large tree in our front yard casting significant shadow on part of the roof. Also, even with the rebate such a purchase doesn't make a whole lot of financial sense - it would only generate enough power to satisfy around 1/4 of our electricity use (1/3 if I go ahead and install a heat pump water heater). The annual saving on our electricity bill would therefore be around $250pa after paying out $4000 for the system. A 6.25% ROI wouldn't be too bad, but after deducting depreciation of around 4%pa (the system has a 25-year expected working life) it really isn't a very appealing investment. In addition, I suspect that the storage batteries used by the system won't last anything like 25 years before requiring expensive replacement. This is another government rebate that I suspect is rather wasteful. Photovoltaic technology is advancing rapidly, so I expect the cost of solar power generation systems such as this will plummet in coming years. If that turns out to be the case, the money spent on subsidising household solar power systems now would fund many more such systems if deferred for a few years. In fact, within a decade such systems may be cost-effective even without any government subsidy.

Subscribe to Enough Wealth. Copyright 2006-2008

The positive side of high petrol prices

With oil setting record highs on a regular basis, the hip-pocket pain of filling up at the bowser is set to increase. However, increased fuel costs do have a positive side. Public transport use (trains and buses) has gone up around 8% in the past year in Sydney, reflecting the shift away from cars for commuting to work. The reduction in peak hour traffic would be even higher than this, as some people are car pooling rather than using public transport, and there would be some reduction in travel as people focus more on finding work closer to home.

Although I've seen the cost to fill up increase from around $25 to $45 in the past couple of years, during this same period the peak hour traffic has improved remarkably. The typical trip to work in the morning used to take 45-55 minutes, while trips during school holiday periods improved to around 30 minutes. This year I've noticed that the daily commute is only taking around 30 minutes, even during school terms. So, although I'm paying an extra $20 a week on petrol costs, I'm saving around 2.5 hours travel time each week. Unfortunately there is a lower limit to how long the trip to work will take - the distance and the speed limits mean it could never get much less than 30 minutes even with less traffic. So, any further petrol price hikes are not going to be of much personal benefit.

However, there will still be the global benefit of increased fuel costs reducing demand for oil. This will both help to cap further increases in the price of oil, and slow the rate of increase in greenhouse gases.

Subscribe to Enough Wealth. Copyright 2006-2008

Earth Hour is pathetic tokenism

Like a lot of environmental "direct action", Earth Hour is a pathetic waste of time and effort in terms of actual outcome (of course, the counter argument is that it's main aim is education and awareness, rather than actually achieving concrete results, but at some point good intentions have to actually start producing some tangible results). I've seen figures that about 10% of households have actually "committed" to observing Earth Hour. One can expect these households to turn off TV, lights and maybe air conditioners/heaters. I doubt that they'll turn off power at the main switch-box, so they won't reduce power consumption of fridges etc., and a large part of household power use is often off-peak heating of water which happens in the early hours, so it won't be affected. Overall, I'd guess these households will achieve a 50% reduction in power use for the Earth Hour, saving about 2.1% of their daily power use. This translates to a saving of 0.0057% of these household's annual power consumption, or around 0.00057% of all household's power use for the year! I hate to be cynical, but I somehow doubt that this will do much to slow global warming...

Copyright Enough Wealth 2007