Saving on Solar

by Larry Smith

The soaring price of fossil fuel is creating new opportunities for alternative energy sources like solar and wind power.

The Economist magazine says global sales of solar panels will reach $11 billion this year, up from $7 billion last year. And wind turbine sales also showed big increases this year.

Although proposals for wind farms and trash incineration plants have languished on official desks for years, the government took a big step this summer by eliminating the 35 per cent Customs duty on solar panels.

Until recently, solar energy systems in the Bahamas made sense mainly for new buildings in isolated islands where power generation is expensive, sporadic or non-existent. For the average homeowner, even an efficient solar water heating system was not usually cost-effective.

But now that the import tax has been removed, installation of these systems makes good economic sense. Solar panels can not only reduce the homeowner's power bills, but also ease the strain on our overloaded electricity grid.

Unfortunately, the limited demand in recent years for this relatively high-priced solution has led to a lack of suppliers. in fact, we could find only one local company set up to install solar water heaters - Mike Garraway's Solar Dynamics on Mackey Street.

But does it make sense to spend $2400 to get hot water from the sun when your conventional heater works fine? Well, the best way to look at investment in a solar system is the equity rate of return.

Installing a solar water heater will cut home electricity costs by up to 25 per cent, so a $300 monthly bill will drop by $75. This $900 a year “dividend” equates to a 37.5 per cent annual return on an initial $2400 capital investment.
 
For example, if a family of four replaces their 2 kilowatt, 40-gallon conventional water heater with a $2400 solar system they will pay for the investment in just two years through lower energy costs, as the following analysis shows:

The current cost of electricity in Nassau is 26.9 cents per kilowatt-hour - based on 18.41 cents per kilowatt-hour plus a fuel surcharge of 8.492 cents per kilowatt-hour. And this cost will only be going up.
 
During a 24-hour period, the conventional 2 kilowatt heater will consume 48 kilowatt-hours of electricity, for a yearly consumption of 17,520 kilowatt-hours costing $4,713.23. If the family has a timer that runs their heater for just six hours a day, yearly costs fall to $1,178.30.

So, at current rates, the investment in a new solar heater will be paid off over two years. After that, water heating will be free over the expected life of the unit, which is 10-15 years. And if the BEC rate goes up, the payback time will be reduced.

If the government would now go the extra mile and increase the duty rate on conventional heaters, or offer other incentives for homeowners to switch, BEC’s overloaded power plants might see lower demand. And since water heating is the biggest energy consumer in most Bahamian homes, we could save millions in foreign exchange just by facilitating this changeover.

According to contractor Godfrey Lightbourn: "I have used a solar water heater at my home for over 30 years. It's a big saver, and I wouldn't live without it."

Comments

[Nellie Thomas]

Read with much interest the article on solar power by Larry Smith. Had the opportunity to see firsthand a home in Key Largo, FL which was built to harness the sun! ... and the pluses were just amazing. It seems a shame to me that our commercial power companies (worldwide) couldn't utilize techniques to this end as well!

[JB]

NRGmanager distributes solar products in the Bahamas and other areas of the Caribbean. We are always looking for qualified contractors to provide quotes for systems. It is the contractors who interface with the public and recommend systems. Typically solar hot water does not make financial sense up front and the need for quick replacement, however if more plumbing contractors would offer a closed loop solar tank to their customers when performing replacements of broken water heaters then later solar could be installed at the roof by another qualified contractor.

If any contractor needs a quote or assistance with solar or wind systems please feel free to contact me. Cape Canaveral, FL
www.nrgmanager.com

[fuel saving]

fuel saving is what we need