Grid-tie – A step toward Energy Independence

Off Grid Power – The Price of Independence

I hear you say that “My goal is to be independent; off the grid forever. I want to take the responsibility for generating my own power for free and stop paying for power.” Energy Independence and freedom are noble causes, but what will it cost you and are there any valid alternatives for your ability to pay? Oh yes, there is a cost. But there is also a payback period.

A friend of mine has said that if we don’t do something different now, even if it costs us a lot, we will find that the current power system will cost us far more in 20 years. Return On Investment (ROI) is what most people use to measure the value of their alternative energy system. But that may not be the best way to look at it unless the increase in the cost of grid power over the next twenty years is also factored in. If the cost of grid power triples in twenty years, which it could very well do, then those ROI numbers start to look real good.

In another post in this category, “Grid-Tie Inverter – How Big?”, we specified a four inverter Outback system. At a list price of around $2400 each the four inverters would come to almost $10,000. Then you need the peripheral stuff like charge controllers, solar panels or wind turbines, battery banks, breaker panels, combiner panels, wiring, mounting brackets, installation … need I go on? It is not unheard of to spend $20,000 on a solar grid-tie system. If your electric bill averages $200 per month that is a very long payback period of 8 years and 4 months.

However, should the price of power triple, then that payback period would drop to $20,000 / $600 or only 2 years 9 months. Of course this is an unreal comparison, but it does show the payback time is one third IF the cost of power triples. Your energy system becomes more valuable with age as long as the cost of grid power continues to rise. The cost of power in 1970 was 5.7 cents per kWH*. The 2010 national average is about twice that at 11.58 cents per kWH.

Will the price of electricity triple in the next 10 years? According to the District of Columbia Public Service Commission**, the EIA projects a rise of 2.2 percent in 2011 compared to a 0.6 percent increase in 2010.

EIA's Short Term Outlook

It doesn’t look like it will triple from this chart, but who can predict the future? If it the price goes up, the value of your energy system also goes up. That is all that we can safely conclude.

So I have an opinion that is not new or even original. The technologies available to us are wind, solar, hydro, biomass generators, gassifiers, and the like. Many of these are able to be installed on your property and will generate from 200 Watts to more than 10 kiloWatts. I believe that the best approach to independence is to get started with one of these technologies and replace your baseline power. Monitor your power usage and determine the minimum amount of power that you use every hour of every day. This may be as much as 1000 Watts per hour. Install an energy system which generates this amount and buy the rest from the grid. As you progress, add more baseline power generation and keep offsetting the electric bills. You may find that generating 1500 to 2000 watts of power will reduce your electric bill to 10% of what you now pay. If the price of electricity triples in 10 years your bill will triple, but it will be 10% of the bill that you would have had.

You can buy at least some independence now. Perhaps in the next few years someone will invent a device that grabs endless power from the cosmos and lives to put it into production at a reasonable cost.

* from ftp://ftp.eia.doe.gov/pub/electricity/elecpmas.pdf
** from http://www.dcpsc.org/pdf_files/customerchoice/electric/elecpriceoutlook.pdf
# Marked up from http://www.eia.gov/emeu/steo/pub/gifs/Fig23.gif

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