A COST-BENEFIT ANALYSIS OF ENERGY EFFICIENCY IMPROVEMENTS TO RESIDENTIAL SCALE PROJECTS

MATT SCOTTCEE 421 - CONSTRUCTION PLANNING

UNIVERITY OF ILLINOISSPRING 2013

CONTENTSTABLE OF

01 ABSTRACT 04

02 INTRODUCTION 02

Background

Renewable Energy Systems

03 PHOTOVOLTAIC PANELS 08

04 WIND TURBINES 14

0505 CONCLUSION 18

06 REFERENCES 20

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ABSTRACTThere are a countless number of driving forces behind energy efficiency that are effecting nearly every sector of the global market. Perhaps the field that has been influenced the greatest by these new ideas and technologies is the building profession. In recent times, many programs have been created to help implement and incentivize energy efficient strategies and systems. One of the fastest growing and most influential programs regarding energy efficiency of the built environment is the LEED certification process. Leadership in Energy and Environmental Design (LEED), is a voluntary, consensus-based, market¬-driven program that provides third-party verification of green buildings, has been one of the most prominent in bringing energy ebuildings, has been one of the most prominent in bringing energy efficiency to the fore of public attention. Developed by the United States Green Building Council, the LEED rating system works by providing building owners and operators with a framework for identifying and implementing practical and measurable green building design, construction, operations and maintenance solutions .In many countries, especially in the United States, the domestic sector has been highlighted as an area which has a significant potential for improvement. However, unlike many commercial and governmental building projects, domestic clients often do not have the monetary resources to implement many of the proven, large-scale energy efficient schemes. The relatively tight budget and small size make all the more important to evaluate whether these 'green' schemes make good economic sense. Heretofore, most economic evaluations of energy-efficiency systems have concentrated on large scale projects with huge potential gains and the energy savings that result. HoweveHowever, residential housing accounts for close to 30 percent of the United States' total energy usage; while each domestic home may be small compared to its commercial counterparts, these minute changes in energy-efficiency have the potential to make a great impact.

This paper aims to analyze the cost effectiveness of many different small scale energy-efficient strategies that can be applied to moderately sized domestic homes located in the temperate climate of the United States' mid-west. What is to follow is a comprehensive template for applicable 'green' strategies that have the greatest impact on energy-efficiency with the shortest return on investment. This study demonstrates how energy savings, environmental benefits, and health and comfort improvements may be achieved in an economically viable manner.

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As the United States works to reduce its greenhouse gas emissions and fossil fuel dependence, the role of energy efficiency in reducing energy consumption must be recognized. In 2010, residential buildings were responsible for 37 percent of the country’s electricity consumption and 1,174 million metric tons of carbon dioxide emissions2. Numbers of this magnitude make it impossible to hide the significant impact that improvements in residential energy efficiency can have on the country's total energy consumption.

Whether planning a large urban development or a quaint residential home, it is essential to assess Whether planning a large urban development or a quaint residential home, it is essential to assess the potential of the many different energy efficiency schemes and technologies available on the market and consider the costs and paybacks of such investments. Through environmental performance and economic evaluations, the results of this report provide clear evidence as to which energy efficient improvements have the greatest positive impact on the environment while remaining economically feasible for homeowners.

BACKGROUND

The following analysis considers the costs and benefits of a residential home located just outside of The following analysis considers the costs and benefits of a residential home located just outside of Cincinnati, Ohio. Constructed in 1999, this 1,200 square foot single family home represents the average tract housing style and development of many suburban neighborhoods found throughout the United States. The home is a 3 bedroom ranch style home with 2 bathrooms, full size basement and attached garage. Constructed in just a few months, this home represents the standard tight construction of many residential contractors with single pane windows and lightly insulated doors. Below is a table showing the gas and electricity consumption for each month throughout the entirety of 2012:of 2012:

These values exhibit the electricity consumption of the home without the addition of any energy efficiency upgrades therefore these figures will serve as a baseline for this study. Gas usage, for space heating and hot water heating, has been omitted since this study is focusing on the generation of electricity.

INTRODUCTION

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ALTERNATIVE ENERGY SYSTEMS

Many homeowners have at some point or another been wooed by the all too common slogan stamped all over home improvement stores, "How would you like to never pay an energy bill again?" or "How would you like your power company to pay you?" Pair this with soft energy performance promises from manufacturers and no money down, and it all begins to sound like a fool-proof plan.

This study aims to examine the most common energy eThis study aims to examine the most common energy efficient systems available to homeowners that: 1) are at a manageable scale to have implemented on an average sized home; 2) do not require a large amount of attention or maintenance - no more than one weekend a season of maintenance time; 3) do not require advanced knowledge of the inner workings of the system; and 4) are available at an affordable cost - assuming this is a home for a middle-class family.

TTaking each of these characteristics into consideration, the systems that will be analyzed in this report are solar panels and wind turbines since each system is readily available and requires little maintenance outside of regular cleaning or advanced knowledge of inner workings. The next sections analyze each system, comparing and contrasting different system classifications and configurations - selecting those that allow the system to perform at its optimum level for the given climate - as well as measuring the total output expected from each.

GARAGE

LIVING ROOM

KITCHEN

BEDROOM

BEDROOMMASTER

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Residential solar panels are becoming more and more popular as our search for alternative energy sources expands. Solar panels do not rely on any outside fuel source to produce power so the only cost of operating solar panels is the purchase and installation price. Additionally, without any mechanical systems, the solar panels require virtually no maintenance (other than the occasional surface cleaning). This makes for an attractive alternative energy option for homeowners looking for 'install and forget' options. Undoubtedly as technology for photovoltaic panels improves the price of panels will fall, however with a relatively steep initial investment cost of the present dapanels will fall, however with a relatively steep initial investment cost of the present day, are solar panels an economically viable option for a residential home located in the Midwest?

Let's look at a typical residential use solar panel produced by LG Electronics (LG230P1C). This unit features a 6x10 Multicrystalline cell photovoltaic panel that at its peak, can produce 230W of electricity per hour3. Electricity production at this rate can significantly reduce a home's reliance on the power grid, however, this peak performance was determined under ideal conditions in the production factory. Real world use of any solar panel will yield many different power productions depending on several adjustment factors: temperature, panel tilt angle, altitude and azimuth angles, and cloud cover - all variables that are anything but ideal.

TEMPERTEMPERATURE

Let's begin with the eLet's begin with the effects of temperature on power production. A photovoltaic cell produces power more efficiently at cooler temperatures, therefore despite panel design efforts to reduce the amount of heat from absorbed solar energy, this decreases the total power output of the panel. For this reason, photovoltaic manufacturers also rate their products' peak power production using what is called the Normal Operating Cell Temperature (NOCT)4 along with the panel's total output. This performance measuring method recognizes the inevitable increase in temperature of the system, making a much more accurate estimate of power production. Measured under the NOCT method, our chosen solar panel's peak production drops from 230W/hr to 168W/hour chosen solar panel's peak production drops from 230W/hr to 168W/hr.

PANEL TILT ANGLE (ALTITUDE)

Another variable that effects a panel's electricity production is the angle of the panel in relation to the rays of the sun. While the NOCT measurement accurately estimates production in relation to temperature, it assumes perfect perpendicular alignment to the sun's rays. As the sun moves throughout the day, the angle of incidence fluctuates therefore effecting the peak energy performance of the entire panel. In an effort to maintain panel efficiency, there are a number of ways of installing a solar panel: fixed, 2 season adjustment, 4 season adjustment, and full sun path tracking panels, each having varying degrees of efficiency5:

PHOTOVOLTAIC PANELS

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As you can see, the most efficient system adjusts the angle of the panel so that sun angles are perpendicular to the panel throughout the entire day, however this type of system requires sophisticated computer software and complex installation that may not suitable for small scale use. The 2-axis tracker mounting system also substantially increases the initial costs of the panels, making this prohibitive for many homeowners. Therefore, to achieve the greatest energy production throughout the year with the minimum amount of adjustments, the 2 season adjustment installation system is the most suitable for this study. Performing at 75.2% of optimum production, our previous peak performance once again decreases from 168W/hr to 126.3W/hpeak performance once again decreases from 168W/hr to 126.3W/hr.

AZMUTH ANGLE

Now that we have addressed the changes in the altitude of the sun (daily), we must address the seaonal change in the sun's azimuth angle as it travels from the eastern horizon to the west. The amount of energy produced by a photovoltaic panel is highly dependent on the angle of arrival of light. The closer the angle of arrival of incident light to perpendicular of the surface of the panel, the higher the relative power output. The following table illustrates the change in power output as the solar angle changes throughout the day6:

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SKY COVER

Another consideration that is frequently forgotten in power output assessments is the eAnother consideration that is frequently forgotten in power output assessments is the effect of sky cover in panel efficiency. All power production estimates to this point in the study have assumed uninterrupted solar rays, however, real world conditions experience a wide range of sky cover from clear blue skies to dreary overcast days. As light passes through clouds of an overcast day, the solar rays are refracted causing for a decrease in intensity as they reach the photovoltaic panel surface. A recent study conducted by Northern Illinois University concluded that under overcast skies, the power output of a solar panel can decrease to up to 47% of its peak performance under clear conditionsclear conditions7. According to the U.S. Department of energy, on a yearly basis the Cincinnati region experiences 59% cloud cover8. The table below illustrates the sky cover adjustment factor:

INSTALLATION AREA

The number of panels to choose to install depends on many unique conditions that vary from project to project. If the panels are to be mounted on the roof, the size of clear roof (unobstructed by chimneys, attic vents, ventilation pipes, etc) limits the number of panels that can be installed. The orientation of the roof will also have an effect since northern oriented slopes are not ideal for capturing direct sunlight. On the other hand, if panels were to be ground mounted on stands, the size of the site will dictate the number of panels that can be installed. Shadows casted by trees, neighboring homes, and other built structures will also play a role in the number of panels that can be installed since panels should be positioned in direct sunlight for every hour of light throughout the be installed since panels should be positioned in direct sunlight for every hour of light throughout the day. The structural capacity of the roof is very important to consider as the panels themselves along with their mounting brackets can add a substantial amount of load to the roof structure.

Taking all of these factors into consideration, the house under review can allow for the installation of 12 panels measuring 16.4 square feet for a total of 197 square feet. With each panel producing 295kW of electricity per year, the total amount of power that can be produced is 3,544kW per year accounting for nearly 34% of the home's yearly electricity consumption.

SUMMARY

After examining each of these variables - temperature, tilt angle, azimuth angle, sky cover, and installation area - it is clear that each have a major impact on the actual performance of a solar

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panel's power output. With an ending yearly energy output of 295kW, the LG Electronics (LG230P1C) panel's optimum power output under actual weather conditions is vastly lower than its measured energy output under ideal conditions.

At an average price of $402.27 per panel (including tax)At an average price of $402.27 per panel (including tax)9, the total investment will be $4,827 for 12 solar panels that can produce a yearly total of 3,544kW - nearly 34% of the total yearly power usage of the home - that with proper saving and budgeting, is a manageable investment for a family to make. This will lead to an electricity savings of $397 per year, paying for itself in just over 12 years. The table below illustrates the breakdown of the return on investment:

As technology for photovoltaic panels improves the price of panels will fall furtheAs technology for photovoltaic panels improves the price of panels will fall further, but even today there are subsidies to help make panels more affordable. The federal government offers incentives, as do many state governments, local agencies, and utility companies. Some states have even passed legislation regarding a feed-in tariff designed to encourage more people to invest in their own solar power generation array and sell the excess back to the power company. This is a particularly attractive option, as you can maintain the safety net of the power grid while taking advantage of the benefits of solar power.

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Wind turbines of all sizes have become a familiar sight around the world for a wide variety of reasons, including their environmental, economic, and social benefits. Because it is free and inexhaustible, the potential for wind energy is immense. With an ever rising interest in wind energy and countless technological innovations, wind turbines are being created in many different shapes and sizes that produce more energy with smaller blade profiles. This makes wind turbine applications possible in small scale projects like residential housing.

Provided there is enough wind in the area undisturbed by hills, trees, or buildings, virtually any home Provided there is enough wind in the area undisturbed by hills, trees, or buildings, virtually any home can install a wind turbine system to start capturing the free energy blowing overhead. However, despite technological advancements in the industry, wind turbines are still relatively expensive compared to the power they produce. Although manufacturers promise yearly energy savings, do these savings offset the initial investment costs making wind energy production a financially viable option for homeowners?

There many micro-climate and building aspects to consider when choosing a wind turbine. Some of There many micro-climate and building aspects to consider when choosing a wind turbine. Some of the main considerations for this study are listed below:

TOWER VS. ROOF MOUNTED

TTower mounted wind turbines are most widely used across the country (particularly in less populated areas) due to the increased wind speeds as you move higher in the air. However, towers upwards of 150' in height cause many problems in a residential neighborhood. Noise, flickering shadows, large guide wire footprint, and ordinances prevent such towers from being used in highly populated areas like suburban neighborhoods.

This makes roof mounted wind turbine designs an attractive choice for this studThis makes roof mounted wind turbine designs an attractive choice for this study. Although wind speeds are slower at roof level, the lower profile minimizes shadows cast on neighbors as well as eliminates the need for an expensive and unsightly tower.

HORIZONTAL VS. VERTICAL AXIS

The standard and most recognizable wind turbine has consisted of blades that rotate about a The standard and most recognizable wind turbine has consisted of blades that rotate about a horizontal axis, a design scheme that has not conceptually been changed since the construction of the earliest windmills in the 9th century. Horizontal-axis wind turbines have blades that are designed to be constantly oriented perpendicular to the direction of wind. This efficient design increases wind power throughout the entire rotation since airfoil surfaces do not backtrack against the wind for part of the cycle, therefore greater rotation speeds can be reached. However, the large swept area of the blades axis turbines greatly slow wind creating turbulence behind them requiring a great distance between turbines. great distance between turbines. The large span of the blades may also cast unwanted shadows on

WIND TURBINES

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neighboring homes, prohibiting their use in densely developed areas.

Addressing some of the issues with horizontal axis turbines, innovations in the industry have Addressing some of the issues with horizontal axis turbines, innovations in the industry have brought about complex turbine blade designs that rotate about a vertical axis. This orientation allows the turbine to capture wind moving in any direction, including a portion of wind blowing from the top without the use of motors or fantails to orient the blades toward the direction of the wind. The ability to capture wind energy coming from multiple directions is particularly favorable in turbulent air like that of suburban areas where homes, trees, and fences disrupt a smooth, consistent stream of air. This allows the turbine to produce power at slower wind speeds than their horizontal counterpart, leading to much less vibration and noise and warranting vertical axis turbines horizontal counterpart, leading to much less vibration and noise and warranting vertical axis turbines suitable for roof installation. For these reasons, a vertical axis wind turbine is the best choice for this study.

TURBINE SELECTION

As wind turbines gain popularity with homeowners, manufacturers are producing more and more varieties of turbines to choose from. However, choosing a wind turbine with the highest kW-hr production rate is not necessarily the most effective or efficient way of selecting a turbine for a particular project. The maximum power production of a wind turbine is heavily dependent on 2 factors: 1) wind speed of the area, and 2) maximum power coefficient of the turbine. These factors should be carefully considered when selecting a suitable wind turbine.

WIND SPEED

The greater Cincinnati location of the case-study home ranks low in the wind energy feasibility range at a wind speed average of just 9.8 mph over the course of a year10. This means that the selected turbine must be able to produce power at very low wind speeds. POWER COEFFICIENT

The coefficient of power of a wind turbine is a measurement of how efficiently the wind turbine converts the energy in the wind into electricity. Wind turbines extract energy by slowing down the wind. For a wind turbine to be 100% efficient it would need to stop 100% of the wind - but then the rotor would have to be a solid disk and it would not turn and no kinetic energy would be converted. Albert Betz was a German physicist who calculated that no wind turbine could convert more than 59.3% of the kinetic energy of the wind into mechanical energy turning a rotor11. This is known as the Betz Limit, and is the theoretical maximum coefficient of power for any wind turbine.

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Carefully considering these factors, a WindTerra ECO1200 roof mounted, vertical axis wind turbine12 is the best system for this case study. It's large rotor sweep area captures a large amount of wind while maintaining a low profile to prevent unwanted shadows, noise, and vibration. Also at only 420 pounds (including mounting hardware), this system is the perfect size for roof installation given that the case study site is very small. The table below illustrates the estimated annual energy output per turbine:

SUMMARY

After examining each of the many variables associated with selecting a turbine design, it is clear that After examining each of the many variables associated with selecting a turbine design, it is clear that wind turbines cannot be selected for a project merely by the amount of power of the manufacturer's rating. Taking into account the unique wind conditions of the project site and the power coefficient of the selected wind turbine, this turbine configuration could be estimated to produce 1066kW over the course of a year.

Given the short roof line and weight of each turbine, 2 turbines are the maximum number of systems Given the short roof line and weight of each turbine, 2 turbines are the maximum number of systems that the roof will be able to support. At an average price of $6,050 per turbine13, the total investment will be $12,100 for 2 turbines that can produce a yearly total of 2,132kW of electricity - nearly 21% of the total yearly power usage of the home. This investment will lead to an electricity savings of $245 per year, having a return on investment in just over 41 years. The table below illustrates the breakdown of the return on investment:

Under the site conditions of this studUnder the site conditions of this study, the initial investment of 2 vertical axis wind turbines will be returned to the homeowner in 41 years - not an effective investment since the turbine is only guaranteed to generate at optimum performance for 20 years. Regardless of the turbine itself or future advancements in the wind turbine sector, the region in which this project is located is not ideal for wind energy generation. The rolling hills and heavily wooded areas greatly slow wind speeds that can be captured close to the ground. None-the-less, if the homeowner takes proper care of the turbines and plans on living in the home for over 40 years, this may not be a bad option especially considering the environmental benefits of renewable energconsidering the environmental benefits of renewable energy.

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CONCLUSIONThe research summarized in this paper has attempted to analyze the actual energy generation of solar panels and wind turbines implemented at a small, residential scale compared to the amount of energy savings that a homeowner can expect to receive throughout the life span of these two common renewable energy systems. This case study house and location was chosen to represent the average residential home serve as a template for homeowners or contractors experiencing similar project and site conditions to make informed decisions about through the system selection process as well as provide an idea of the power output to expect with the adjustment values explored earlieexplored earlier.

As discovered earlier, the addition of solar panels is an effective way to reduce electricity demands while seeing a return on investment in a relatively short amount of time (12 years). On the other hand, the addition of wind turbines were found to not be as appropriate for this particular case study. While 2 turbines can provide 21% of the home's annual energy needs, the high costs associated with the purchase of the turbine, controller/inverter, and mounting system pushed the return on investment beyond reach at 41 years. These findings show that for this particular location, wind turbines are a financially practical investment, however this does not take into consideration the value of the environmental benefits of renewable energvalue of the environmental benefits of renewable energy. Every watt that is created by the turbine spares the environment of the damage done by traditional power production methods of major power companies. This ethical value must also be carefully considered along with the financial value of the system on the homeowner's checkbook.

Although the return on investment and initial costs of each of these systems may seem daunting to some, there are many governmental programs and grant opportunities that can help cover the high initial costs of these systems, driving down the payback period. Tax incentives are available in many municipalities that can further offset the initial investment and again drive down the expected payback period. Financial options also exist to help with making the transition to renewable energy. In 1995, the U.S. Department of Housing and Urban Development (HUD) created a nationwide Energy Efficient Mortgage (EEG) Program14. EEMs provide mortgage insurance for a person to purchase or refinance a principal residence and incorporate the cost of energy epurchase or refinance a principal residence and incorporate the cost of energy efficient improvements into the mortgage of their home. There are a lot of opportunities to reduce the initial investment of renewable energy systems, decreasing the return on investment time, and in turn generating income for the homeowner while not to mention increasing home value.

While an attempt has been made to evaluate all the factors and costs associated with solar panels and wind turbines, there are a number of assumptions that were made throughout the study. This investigation assumes that the solar and wind generating systems will be properly maintained over the entire life span of the system - therefore wear and tear on the system was not factored into the actual power output estimates. In addition, it is assumed that the weather conditions throughout the year will follow the average characteristics of weather patterns of years past. Lastly, since power

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rates fluctuate on a yearly basis, it is assumed that the costs of energy will remain constant throughout the life of the system.

The above difficulties demonstrate that a perfect methodology for evaluating the actual performance of renewable energy systems is very difficult. Conditions vary widely from year to year, region to region, and even neighborhood to neighborhood. The purpose of a study like this is to not track every watt produced, but rather provide a general picture of what each of these systems are able to achieve, illustrating the feasibility of incorporating each on the scale of a residential home.

11 United States Green Building Council2 Buildings Data Book3 http://www.amerescosolar.com/sites/default/files/lg230_225_220pic.pdf4 http://pvcdrom.pveducation.org/MODULE/NOCT.htm5 http://www.macslab.com/optsolar.html6 http://www.longsgap.com/SolarWind/SunAngle.html7 http://www.vernier.com/innovate/the-effect-of-sky-conditions-on-solar-panel-power-output/88 United States Department of Energy9 http://pvdepot.com/solar-panels/lg-230-watt-lg230p1c-g2-solar-panel.html10 http://www.windpoweringamerica.gov/wind_maps.asp11 http://learn.kidwind.org/sites/default/files/betz_limit_0.pdf12 http://www.wholesalesolar.com/pdf.folder/wind%20pdf%20folder/WindterraECO1200Specs.pdf13 http://trombonist.wordpress.com/2007/08/25/windterra-wind-turbine/14 http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/eem/energy-r

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