Southern California Edison (SCE) and Ford
Most auto manufacturers have gotten on the plug-in electric vehicle bandwagon. General Motors electrified the Detroit auto show with the plug-in hybrid, the Chevy Volt. At the Tokyo auto show this week Audi and Nissan both announced that they would develop plug-in hybrids. Toyota already has some plug-in hybrids being tested in California. In July 2007, Southern California Edison (SCE) announced a collaboration with Ford Motor Company to find ways to make plug-in EVs financially feasible to consumers, while reducing petroleum-related emissions.
According to the Department of Energy (DOE), in 2006, 96 percent of our transportation ran on petroleum products, such as gasoline and diesel. There is a small ethanol infrastructure centered in the corn belt counties that are making some headway. Electricity is the only other infrastructure that is in place that could be used as alternative energy for transportation. Electricity is domestically made: over 50 percent comes from coal, 20 percent from nuclear power, 16 percent from natural gas, 10 percent from renewable energy and only 2 percent from petroleum.
Electric vehicles would make sense, but in my area alone, Placer County, California, we have had four rolling blackouts in the past year. All the auto manufacturers say the battery is the hold-up, but unless we have the energy for those engines they won’t be able to run.
Where will the electricity come from? What are the electric companies doing to provide us more electricity during peak periods? What can consumers do to lower our energy costs and use less electricity for our home, so that we can energize our electric vehicles? There are some answers, but they will take time and cost more money.
In December 2006 the DOE produced a study that showed enough excess capacity during off-peak hours that 73 percent of all light-duty vehicles could be fueled overnight on the electric grid without adding a single power plant. But we need to find a way to get people to stop using so much peak hour electricity. It appears that the utility companies are doing what Congress won’t do; raising the rate of the energy to incentivize consumers to consume smartly.
Smart meters
Smart meters are the newest rage of utility companies and could have the added benefit of making people use less energy during peak hours. Traditionally, a meter person drives into my driveway and peers through his binoculars to read my meter, my dog barking his head off, all the while. I can use all the electricity I want, any time of the day because my meter only registers usage, not time of day.
Smart meters will link to a satellite that registers the time of day electricity is used and sends the information to the electric company. According to Edison’s website, they will bill you by the time of day usage as well as pass on the cost of the program. In Edison’s case the program will cost $1.3 billion to their 4.8 million customers.
Edisons website does say, “SCE believes new rates and demand response programs made possible by its smart meter system could reduce peak demand by as much as 1,000 megawatts ” the output of a large power plant ” as customers reduce some peak electricity usage and shift some peak usage to off-peak periods of the day when power costs less. Additional savings include lower labor costs due to the use of wireless data transfer from meters to the utility rather than manual meter reading.”
Stephen Conroy, Director of PR for Edison says, “our intent is to teach people how to use power. If people can see that their air conditioning costs six cents per kWh before noon and twelve cents from 12-4 would people use less air conditioning during those hours? During the summer there is a thirty percent increase in electricity usage between 12-4 because of air conditioning.”
Conroy said that there are devices in our homes that he calls “vampire devices”, “devices that have green lights that stay on, such as Plasma TVs, sure protectors, cellphone chargers. When those green lights are on, those appliances are drawing electricity. These devices eat electricity and cost you money during peak hours, even when you think they’re off.”
Pacific Gas & Electric has already started implementing smart meters in certain areas. Sempra Energy in Southern California has started to roll out smart meters as well. According to Jessie Knight, Executive Vice President, Sempra Energy, “It is not tied to whether or not a home is new or not. It is being done by geographic sectors because it is driven by the infrastructure pathways.”
When this program is fully developed there will be a device in the home that customers can look at in real-time to see how much electricity will cost them. Electricity companies will be able to call the customers on the smart meter and leave an automated message saying that there will be a spike in the peak hour cost of electricity. The electricity companies are hoping that this will help customers cut down on peak usage, especially during the high consumption times.
There will be an increase in energy usage if electric cars plug into the grid and not everyone is going to electrify at night. How do we create more energy during peak hours without creating more CO2 from hydrocarbons?
Solar Panels
The U.S. Environmental Protection Agency says that for every megawatt of an hour of electricity produced by a fossil fuel power plant 2,500 pounds of carbon dioxide are produced. Since solar energy produces no CO2, every 1-kilowatt hour of electricity generated by solar energy saves us nearly 2.5 pounds of carbon being released in the air.
According to my last Pacific Gas and Electric bill, I am actually using fewer kilowatts per hour than I was a year ago. Last year I used 720 kilowatts per hour, this year, at the same time, I used 602 kilowatts per hour. In the last five years, we have re-insulated our home and changed all our windows to dual pane.
I went to a solar website and calculated how much it would cost me to put solar panels on my home.
On average, I spend $170 a month on energy for my 1,800 square foot home and 600 square foot garage. Annually, I spend $2,040 for energy. The PG&E bill alone is around $100 a month. Included in my energy bill is a cord of firewood each year and 400 gallons of propane. I use the propane to heat my house and my water heater. I calculated that, including PG&E increases, I will spend $26,928 for energy over the next ten years.
If I were to install solar panels, how long would it be before my breakeven point?
You cant find out this information with just one phone call. You really need to do your homework and soon you will have the ability to make a choice of whether you want a rebate of a revenue stream.
Rebates or revenue stream
You will need help from a solar installer to figure out how many panels you need for your home and how much sun can be generated. You will also need to decide if your home has lots of sun do you want to add more panels then you need or go with only enough energy to power your home as it stands right now.
Currently, the way the system works is you pay $8.80 per kilowatt system. One kilowatt equals 1,000 watts and most systems are between 2-6 kilowatts. For example, if I decided to put a four-kilowatt system on my roof I would pay $35,200 for the system. Through my electric company, I would receive a rebate of $2.20 per kilowatt, or $8,800. I would also receive a $2,000 federal tax credit (not deduction) for the system. My net cost would be $24,400. Both of these rebates are in effect till 2008.
The rebate from the electric company is actually a fund that was approved by the State and funded by ratepayers. The fund is called the California Solar Initiative (CSI) and each month you pay your bill you pay a few cents into the fund.
The rub
Let’s say I decide to install the system in May. At the end of my fiscal year (April 30) the electric company has what is called a “net metering” or a “true-up” period. Each month I would receive a bill telling me whether I have produced more energy than I have consumed and what my monetary expense for that energy would be, or the credit amount. At the end of the year, if I have a credit on your electric bill, the electric company takes that credit off my account and zeros it out.
According to Rubin, twenty percent of PG&Es solar customers have a credit on their bill at the end of the year. Of that twenty percent only 1/3 of them actually produced more energy than they consumed. So, in effect, six percent of the solar customers had a credit on their bill and produced more energy than they consumed. Those ratepayers did not get paid for the credit and the credit amount did not go back into the CSI account that gives rebates to more solar panel investors.
David Rubin, Director of Services Analysis, Pacific Gas & Electric (PG&E) explained, “the credit is not real dollars, the rates are retail rates that are higher than we would buy energy for from anyone else. We are paying that rate so that consumers get greater value out of their system, we are helping promote solar.”
Rubin acknowledges that this is the “first generation” of solar system rollout and “PG&E is open to looking for ways to be fair to everybody.” The next-generation rollout may give customers the option of taking an incentive from the consumer funded CSI rebate or skip the rebate and build a solar system that produces more energy, normally during peak hours, and sell it back to the electric company.
| Average Annual Utility Savings: (over the 25-year expected life of the system) |
$920 to $1,775 |
| 25-year Utility Savings: | $22,995 to $44,384 |
| Return on Investment (ROI): (with Solar System ave. cost set as asset value) |
360% |
| Return on Investment (ROI): (with Property appreciation set as asset value) |
512% to 265% |
| Years to Break even: (Includes property value appreciation) |
< 1 to 3 years |
| Years to Break even: (Assuming no property value appreciation) |
5 to 10 years |
| Greenhouse Gas (CO2) Saved: over the 25-year system life |
74.0 tons(148,000 auto miles) |
Smart meters should be rolled out by 2009. As peak usage goes up in price more people will look for ways to cut their expenses. One would assume that with smart meters the electric company will also be able to see when the solar energy is being produced and will pay those folks who produce more energy during peak hours more money.
Your house could become another revenue stream. Invest now.
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