Alternative Energy for Housing Team 2 Lindsey Jantz – Organizer/Leader Gerald Spotts – Techie Johnny Lo – Summarizer EGR 403 – 03 Fall 2007

Overview Background Description Scenarios Factors (environment, cost, power, efficiency) Analysis Approach (Present Worth) Sensitivity Analysis Conclusion

Background Living in a world with increasing and alarming global warming concerns, people are going green. Solar Energy: photovoltaic cells in panels convert the sun’s rays into useful energy Solar panels can get expensive –May take many years before the investment pays off

Scenarios Family of 4 living in a 2200 sq-ft home in Orange County area. Conventional Energy vs. Solar Energy –3 different sized solar systems Is initial investment for solar energy a better option than standard electricity? –For period of 10, 20, 30 years

Fixed Parameters Fixed average power usage (kWh) for both cases Analysis periods of 10, 20, and 30 years Solar System life of 30 years

Conventional Energy Sum of average monthly energy costs Rate according to SCE Increasing rate of 2.8% per year Considers decreasing consumption –For example, family members move out

Solar System 3 Systems: –Small (45% of energy is solar) –Medium (65% of energy is solar) –Large (100% solar energy) Each system is financed with a 10 yr loan with a 7% interest rate Remaining cost is based on conventional energy costs Irvine, CA

Present Worth Analysis Cash flows: –Conventional energy –Solar: Monthly loan payments + additional energy costs NPW (NPV function) used for each analysis period

Conclusion Conventional energy is the better alternative for a 10 and 20-year period System 2 (combination) paid off and actually was the better alternative after the 30 year period –65% solar and 35% conventional energy

Other Considerations Solar is environmentally friendly Better benefits depending on location Many state incentives –CA State Cash Rebate if system is connected to utility grid

Resources U.S. Department of Energy: –Information on incentives, etc. Heritage Solar: –Installs solar system in Southern CA –Can get estimates for your home online