The Laughlins’ PV Costs & Savings

Corrections or additions?

This article by Terri Bookman was prepared for the October 30, 2002 edition of U.S. 1 Newspaper. All rights reserved.

Solar Energy’s New Payoff: Residential consumers can now be producers

Walter and Melody Laughlin of Flemington had photovoltaic

(PV) energy panels installed on the roof of their 23-year old home

in December, 2001.

In August of this year, their electric bill was $0.

"It won’t last," Walter Laughlin laughs. "But it got our

attention."

The Laughlins’ recent electricity bill reflects credits for overpayments

made shortly after their PV installation, before bill-averages were

adjusted by the power company to reflect their new system. When those

credits are exhausted, the retired sixth grade science teacher and

his wife, a retired home economics teacher, expect their 3.6-kilowatt

photovoltaic system to supply 70 percent of their home’s electricity

needs — and they expect their electric bills to be 70 percent

lower than they were prior to their PV installation. Before PV installation,

the Laughlins’ energy bill was $171 per month. They expect future

bills to be between $50 and $60 per month.

The Laughlins’ savings calculations do not take into account the possible

impact on electricity prices of energy deregulation. Price caps on

the rates charged by New Jersey utilities are scheduled to come off

next summer, in 2003.

"We were watching the deregulation mess in California. We were

worried that the same kind of situation would come into play here,"

says Laughlin. Laughlin says he was particularly concerned with guaranteeing

a comfort level for his wife, who is disabled. "We were reading

about predictions of energy prices going up. But the sun is up in

the sky every day cranking out that energy. The power is there."

"And there was an environmental consideration," says Laughlin.

"You’re not burning coal in the power plants. This is pollution

free."

Around the same time the Laughlins heard about the New Jersey Clean

Energy Program, implemented in the summer of 2001 (www.njcep.com).

Installation of residential photovoltaic panels costs between $20,000

and $30,000, depending on the size of the system. But the Clean Energy

Program offers rebates of up to 60 percent of installation costs.

The Clean Energy Program rebates are augmented by energy buyback,

or "net metering," programs put into effect in New Jersey

in 2000. Under the buyback programs, homeowners install PV panels

to provide their own electricity but remain connected to the New Jersey

power grid. The PV panels generate electricity for the house when

the sun is shining. On days when there is a lot of sun, or electricity

usage is lower, the panels sometimes generate excess energy —

more than is needed for the home. At those times, the excess electrical

energy is fed back onto the grid, and the home’s electricity meter

runs backwards. The homeowners receive a credit on their energy bill

for the excess energy generated, at retail rates. At night, or in

inclement weather, the home draws power from the grid, like other

homes, and the meter "runs forward" just as in homes without

PV panels. In this way, houses with solar panels send energy back

onto to the grid during daylight hours (when overall grid demand is

highest), and draw from the system at other times.

When he saw the newspaper article about the Clean Energy Program,

Laughlin says, "I saw the article and showed it to my wife. We

said `Let’s go for it.’" Laughlin’s power company provided a list

of contractors, and he selected Lambertville-based Rick Brooke of

Jersey Solar (609-466-8362) to handle the installation.

Laughlin also elected to install a battery "backup" for his

system, for emergencies. If there is a power outage, and power is

not available from the grid, his PV panels automatically switch and

route power to continually recharge a battery backup system. The battery

system works indefinitely, if enough sunlight is available. Even if

sunlight is not available for recharging, the battery backup will

work on its own in an emergency for up to two days.

In this way, Laughlin feels assured of never being without

power. The emergency battery backup added 10 to 15 percent to the

total cost of his system. The total cost to the Laughlins? For their

system, the Laughlins’ pre-rebate cost was $30,760. Their Clean Energy

Program rebate (they are impressed that their rebate check arrived

only three weeks after the paperwork was filed), was a whopping $17,640.

Total cost of the system to the Laughlins: $13,120.

If their expectations of energy savings are correct, the Laughlins

would achieve what installer Brooke calls "positive cash flow"

on their system — a time when the system has paid for its own

installation through energy bill savings — in nine years. If energy

prices rise, that payoff time would be even sooner.

Walter Laughlin, who taught science for most of his career, grew up

in Maine and attended Gorham State Teachers College. He worked as

a teacher for two years in Maine, then four years in Connecticut,

and finally for 27 years in the Flemington-Raritan Regional Schools.

A self described "tinkerer," Laughlin says he is very comfortable

with the idea of having his PV system on his roof. His science background

helps him understand the system, and he enjoys describing how it works.

Melody Laughlin is a Flemington native and a former teacher at Delaware

Valley Regional High School in Hunterdon County. She is a graduate

of Farmington State Teacher’s College in Maine, where she and her

husband met on a blind date when they were both in school.

Laughlin says his neighbors and others are curious about his PV system

and that some are also considering PV installation. Or sometimes people

drive by, see his panels, and pull into his driveway to talk. A little

while ago, "a gentleman was driving up the road and saw the panels.

He pulled in and introduced himself. He asked me if I minded,"

Laughlin says. "So I gave him the Cook’s tour. He and his wife

were thinking of doing the same thing. There has been some interest."

"We’re very pleased with what we got," Laughlin says.

My panels are a better investment than the stock market,"

says Alice Celebre, an East Amwell resident, proprietor of Basil Bandwagon

Natural Market in Ringoes, and an independent energy consultant. Celebre

and her husband, Ralph, have a variety of "passive" and "active"

solar features incorporated into their new custom-built home, constructed

last year. The home’s passive solar features include window overhangs

that shield windows from higher angle summer sunlight, but welcome

lower angle winter light for natural heating. The house is also oriented

with large windows on the southern direction, small windows to the

north, energy efficient landscaping (shade trees east and west), and

water pipes in the floor for radiant heating.

The Celebres have two solar units on their roof — one for direct

water heating (not PV), satisfying all the home’s hot water needs

(including frequent use of their Jacuzzi hot tub — "We use

that instead of Xanex," Celebre says.) Solar hot water heaters

heat water directly, but do not produce electricity like PV panels.

All of the Celebres’ energy-saving features, along with special windows

and appliances, make their home highly energy efficient. Celebre says

her home has qualified as an "Energy Star Home," under another

state rebate program that awards $3,000 to homeowners who make the

investments necessary to maintain such high energy efficiency standards.

With all the energy efficiencies built into the home, the Celebres’

resulting energy needs are very low compared to most homes of the

same size. They installed a rooftop PV system last spring, but with

their electricity usage already low, the couple elected to install

a small 2.8-kW PV system that Celebre says should provide for about

50 percent of their electrical needs. Their installation costs, after

rebate, were about $11,000, so that Celebre says "positive cash

flow" for the PV part of their system could take up to 20 years.

Celebre says the savings from their hot water solar heater (cost:

about $3,500) will be more dramatic, and should result in enough energy

cost savings to achieve positive cash flow from that part of the system

in 10 years or less.

But Celebre is feisty about the economic arguments. "This is my

investment in my family’s future," she says. The environmental

benefits of preventing pollution and reduced contributions to global

warming outweigh other considerations for her. "People have to

do this to reverse the devastation we have caused the planet,"

she says. "I would like to see it become fashionable for people

to install PV and other solar for events like a couple’s 20th wedding

anniversary," she says. "People should get solar instead of

one of those anniversary rings that are so popular."

Even with the financial incentives for PV installation offered by

the Clean Energy Program rebates, Celebre’s reasons for connecting

her PV system are typical, says installer Rick Brooke. "It appeals

to environmentalists," he says. Brooke handled the PV installation

on both the Celebres’ and Laughlins’ homes. For 23 years, Brooke’s

company installed solar hot water heaters for pools and home hot water,

before he began doing PV installations in 2001, when the Clean Energy

Rebate Program began, and interest in residential PV immediately picked

up.

"Before 2001, residential photovoltaic systems were all off grid,"

says Brooke, and suitable for uses such as vacation homes. These free-standing

off grid photovoltaic systems were most popular and cost effective

in areas that were far from or not connectable to regular power grids.

Most commonly these homes were found in outlying or mountainous areas,

such as in Colorado.

But then New Jersey’s net metering and rebate programs went into effect

in 2000 and 2001, and during the first year of the rebate program

Brooke has installed 20 residential PV systems connected to the regular

power grid, as well as five large commercial systems, in the state.

(Commercial PV systems are considerably more cost effective, Brooke

says, offering 100 percent tax write offs of installation costs, and

other financial benefits.)

Power companies administer the rebate program, approving the connections

to the grid, and processing the state-funded rebate payments. According

to PSE&G Inside Plant Rehabilitation Manager Bill Labos, after the

program’s first year the energy generated by Clean Energy Program

sources on the New Jersey power grid is still miniscule, amounting

to approximately 970 kW of the 18 million kW grid system, on a daily

basis.

But the PV share is growing. Over the past year where the dual Clean

Energy and net metering programs have been in effect, a total of 67

homes in New Jersey have joined the program, according to Cameron

Johnson, director of Renewable Energy Programs at the New Jersey Board

of Public Utilities (BPU).

Brooke has now also installed photovoltaic systems at his own home

in Lambertville. In September, 2001, he installed a 1.6 kW system,

and this September he installed an additional 3.1 kW system. He expects

his PV system to supply about 80 percent of his electric energy needs,

for a savings of about $600 a year at present rates. His installation

cost after the rebate was $12,000.

But Brooke says his motivations were "90 percent environmental,

10 percent economic." Brooke believes interest in the photovoltaic

installations will increase again next year when further deregulation

occurs.

Residents who have installed PV systems report good cooperation from

power companies. Some power company representatives, however, do not

make a secret of their skepticism about the Clean Energy Program’s

prospects.

"It’s just been a trickle of people" who have installed PV

panels and who take part in the rebate and net-metering programs,

Labos says. "Mostly it’s early adopters, techno-innovators, or

people with strong environmental feelings.’

"I’m not 100 percent crazy about the whole thing," he says.

"My opinion is that rebates don’t make sense — because then

I’m paying for your energy use."

PV advocates respond that the Clean Energy Program rebates are a good

deal for New Jerseyans. "Solar power reduces the price of power

for all consumers in the state," says Delores Philips, director

of government relations for Energy Photovoltaics Inc. (EPV), the Lawrenceville-based

PV manufacturing firm. "It reduces the amount of power the large

utility companies are producing and selling," Phillips explains.

"If less energy is sold, the price of that energy is reduced."

More important, says Phillips, is that New Jersey residents benefit

from solar and PV because use of these systems reduce CO2 and other

emissions from power plants. "It’s not only global warming,"

says Phillips. There are concerns related to energy security. Installation

of PV systems helps to decentralize the energy supply.

Agrees Johnson of the BPU: "There are security benefits. People

with PV and a battery backup will have electricity even if the utility

goes down. And PV users’ electricity costs are stabilized."

The rebate program is funded for eight years. "I’ve done a calculation,"

Johnson says. "If all the commercial and residential roofs were

covered with PV, New Jersey could generate all the electricity that

is needed for non-industrial uses. I expect this program to grow."

Top Of Page
The Laughlins’ PV Costs & Savings

Installation charges: $30,760 NJ Clean Energy Program

rebate: $17,640. Net cost: $13,120

Hoped-for savings on energy bills: $1,440 per year. Payback

time for savings to equal initial installation cost: 9.1 years.

For additional information go to the Northeast Sustainable Energy

Association www.nesea.org


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