We’ve been in business for about a year and half at Spark Applied Efficiency, and have had the pleasure to work with great clients on several interesting projects.
Election day is Tuesday, November 4.
If you live in Brunswick, Freeport, Harpswell, North Yarmouth or Pownal, you’ll see me on your ballot under State Senator, District 24, as “Horch, K. Frederick, Brunswick, Green Independent.”
To learn more about why I’m running and what I’ll do for you as your next state senator, please visit www.VoteHorch.com.
Dear friends and colleagues,
I am delighted to share the news that I am starting a new venture.
After selling the F.W. Horch store in 2011, I was able to spend a year in Japan thinking about a wide range of business ideas (in between trying to learn Japanese and being the tour director for our family’s global travels). Since that time I’ve run for office, volunteered for many worthy causes, contributed to a report on sustainable agriculture, and helped organize a Climate Solutions Expo and Summit that brought a thousand people together to consider what we should do next here in Maine about climate change. Now I’m ready to get back to business.
I’m excited to announce a new venture with my partner Pat Coon. Pat and I are developing a company to help businesses be more energy efficient and convert from fossil fuels to clean power. We will help our clients find cash-positive energy upgrades that prevent pollution and save money. Our experience is that many small businesses are inefficient simply because the owners are busy thinking about other things besides energy. We will bring our passion and experience to help business owners reach a higher level of efficiency. We’re starting with food service businesses, as they tend to have specific problems that we can solve immediately.
But we need a name! We’ve been using Coon & Horch Energy Partners (CHEP) as a placeholder. We like the Energy Partner’s piece, but Coon & Horch sounds a bit too much like a law practice (and I just can’t imagine myself going back to the practice of law). I would be most grateful if you would think about a name for us. It can be funny — or serious — but should invoke our vision, which is to “unleash a wave of change in how our partners use energy.”
I’m really fired up about our new venture. I see helping businesses transition to a more efficient and more sustainable energy future as an incredibly worthwhile challenge and a great opportunity.
Once we have a name for our new business, I’ll be sending you my new contact information.
I look forward to your ideas for what we should call ourselves. And if you can think of any restaurants, resorts, coffee shops, spas, hotels or other food service or hospitality businesses in the greater Portland area that might use our services, we would love it if you could let us know.
I recently gave a talk in Brunswick (“Clean Energy Independence”) at which I handed out a document that I had prepared for the 2013 solar tour. Here is a copy for those who missed my talk and have requested a copy:
Fred & Hadley Horch, Green Buildings Open House 2013
Our house was built in 1828 and has been falling down ever since. Ever the optimists, in 2012 we had a new metal roof put on over our existing shingles. This gave us a nice platform which should last 50 years on which to mount solar collectors. For 184 years our home’s roof was simply heating up all day and cooling off all night without any of that energy being harvested; we’re eager to make up for lost time.
Our goal was to maximize the amount of energy we collect from our roof, so we installed both a hot water system and a photovoltaic electric system. Trees owned by the Town of Brunswick and our neighbors partially shade our roof some of the year, but otherwise our roof is ideal for solar. Our roof slope allows an unusual configuration: our hot water collectors are on the north side, while the PV panels are on the south.
Our solar hot water system provides domestic hot water with an electric back up; it heats a large tank of water that we use for sinks, showers, dish washing and clothes washing. This system is not tied into our space heating system, nor is it powered directly by our solar electricity panels. Instead, the pumps and the electric back up heating element are powered by the grid. We chose evacuated tube hot water collectors for two reasons: first, wind blows around the tubes so we can tip them up on our roof (and keep them up out of the snow in winter) with less risk of problems, and second, they perform better in cold temperatures than flat plate collectors.
Our solar electricity system is grid connected with no batteries. However, unlike older systems which are unusable in the case of a grid failure, our inverter does have a plug that allows us to use our solar electric power even if the grid goes down. In case of an extended power outage, this “solar plug” might come in handy to keep a freezer going or to charge our electric car. Recently we had the chance to test this plug when the grid went down in Brunswick. It worked!
You may notice that we have two service entrances and four electricity meters on our house. When we bought the house, we had two meters: the first for the main house and the second for an in-law apartment. One 200-amp service entrance provided enough power for the entire structure.
We upgraded from heating oil to electric heat as part of our commitment to stop directly buying and burning fossil fuel. We replaced our oil boiler with an electric boiler, allowing us to keep all of our existing distribution plumbing and control systems. Switching to electric heat did require adding a second 200-amp service and a third meter for that new service, which is used to heat our house and charge our electric car. CMP decided to replace the transformer on the pole across the street, and the wires from our house to the pole. Once the utility work was done, swapping out the oil boiler for an electric boiler was quick and easy. Everything was done in the space of a few hours.
When we added the solar PV, CMP came out to add a fourth meter to measure the electricity our panels produce and send to the grid. Our panels are wired as DC strings which feed a central inverter in our basement. From our inverter, an AC wire feeds into a panel that supplies our boiler and our electric car. This panel is connected to two meters to allow us to participate in the net energy billing program. One meter measures how much power comes from the grid to our panel; the other measures how much power goes from our panel back out to the grid. Every month, our electricity bill shows these amounts and we pay the difference (if we use more electricity than we generate in a month).
We lower our cost of electricity by participating in CMP’s time of use billing [note: as of January 2014 we no longer participate in this program due to price increases; instead we purchase green electricity through Union Atlantic Electricity]. We generate solar electricity mostly during peak hours when rates are higher, whereas we use grid electricity for space heating and car charging during off-peak hours when rates are lower. As a consequence, we expect to net out all of our high on-peak usage and pay only for low off-peak power. In the summer, when our heating system is off, we have generated more electricity than we have consumed. This extra electricity can be banked for up to year. We expect that in September we will begin using more electricity than we produce. Our PV panels were installed in July 2013 so we do not have much data on their production, but so far they are tracking expectations per the online PV Watt estimator.
Due to the meter placements, electricity that we use directly does not get counted at all. We can tell how much electricity is being used “behind the meter” by comparing the output of our inverter with our meters. For example, if we are charging our car during a sunny day, power is produced on our roof, converted to AC through our inverter, and distributed to our car through our panel, but neither the incoming nor outgoing meter detects it. The kWh log on our inverter increases, but neither utility meter increases.
We expect the pumps on our hot water system will be the first components to fail. Our inverter should last for at least ten years, our hot water collectors at least 15, and our PV panels at least 25.
The upgrade to all electric heat was an opportunity to remove a chimney and eliminate a combustion system that drew cold air into our house whenever our oil boiler fired. Our house is now safer (no exhaust gases are being produced inside) and more snug. We are tracking our total energy consumption to quantify our efficiency gains from upgrading to an electric car and heating system. Anticipating that we will need purchase grid electricity once heating system gets underway, we have signed up for the green electricity program through the PUC. This program promises that all grid electricity we purchase is generated from clean sources in Maine.
People sometimes wonder how our grid can handle the extra power that solar panels are generating and feeding into it. In comparison to other loads that come and go, the amount of power that our rooftop solar panels produce is relatively modest. In full sun, our roof produces about 3,400 watts. That’s about twice as much power as our toaster requires. (On the other hand, that’s also about ten times as much power as all of the light bulbs in our house require, since we use super efficient, high quality LEDs.) So if neighbors on either side of us turned on their toasters, they’d suck up all the solar power we are providing to the grid. Over the course of the day, our panels ramp up from 0 to 3,400 watts, depending on sun angle, temperature, cloud cover, and shading.
We have a lot more roof space that could be covered with solar. Unfortunately, being in a small in-town lot, we are surrounded by trees that we do not own. Assuming a mysterious disease does not suddenly infect our neighboring trees, any additional collectors will need to be very carefully placed for us to get the maximum return on investment. Still, we expect the investment we have already made in solar will more than pay for itself financially. The peace of mind and sense of doing the right thing that you get with solar are a nice bonus!
Fred Horch owns Spark Applied Efficiency, which helps businesses become more valuable and sustainable through efficiency. If you’d like to take personal action to save energy or prevent pollution, he’s happy to provide free advice and compare notes!
“How can we make solar power affordable, viable? Pay people for it,” an op ed I wrote about solar energy policy in Maine, was published in the Bangor Daily News this week.
Several interesting questions and concerns came up in comments. Many of them related to the specific costs of our system. For anyone who would like to know those details, here they are.
Solar Photovoltaic System
|Pre-incentive Installed Cost||$19,835|
|Maine state rebate||-$2,000||No longer available|
|Federal Tax Credit||-$5,951|
|Actual Installed Cost||$11,885|
|Incentivized Cost||$3.46||per Watt|
|Electricity Price||$0.14||initial price per kWh|
|Inflation Rate||2.4%||projected increase|
|Annual Value of electricity||$621.33|
|Production Price||$0.24||before incentives|
|Incentivized Price||$0.14||fixed for 25 years|
|Cost of Capital||2.74%||per year|
|Annual payments||($586.14)||principal plus interest|
|Annual degradation||0.60%||per year|
One commenter asked about our financing. We used a home equity line of credit with a 30 year term and a 10 year draw, at a 2.74% variable rate. We are actually only paying interest, deferring principal payments, but I’ve included both principal and interest to give us a full picture of our loan obligation. One of the points of my op ed is that such low-interest financing or ability to pay cash for solar energy systems is not available to every Maine family. The policy question is, Do we want to make solar more affordable for more families?
In addition to a photovoltaic system on the south side of our roof, we have a solar hot water system on the north side.
Solar Hot Water System
|Pre-incentivized Installed Cost||$12,983|
|Federal Tax Credit||-$3,895|
|Actual Installed Cost||$7,088|
|Incentivized Cost||$1.82||per Watt|
|Energy Price||$0.10||initial price per kWh|
|Annual Value||$584.40||averaged over 15 years|
|Production Price||$0.14||before incentives|
|Cost of Capital||2.74%||per year|
|Annual degradation||0.67%||per year|
The above data explain why more photovoltaic systems and fewer thermal systems are being installed in Maine. The warranty period for PV is 25 years versus 15 for thermal, which has a dramatic impact on the total value of the systems. The reason PV systems can offer longer warranties is they have no moving parts, whereas thermal systems have pumps to move antifreeze.
In my solar thermal calculations, I have made the very optimistic assumption that we obtain value from all the energy we collect. This is not likely. In the summer we probably have excess energy that we cannot use because our hot water tank is already at temperature, and we cannot send our extra heat to our neighbors. In contrast, when our PV panels generate more electricity than we can use, we can share that with my neighbors over the grid and get net energy billing credits for it.
Many families are choosing to install heat pump water heaters that use electricity. When combined with solar PV, these offer a fantastic long-term value.
The reason we installed solar thermal and not more PV is that we wanted to use both the south side and the north side of our roof to harvest the maximum possible amount of solar energy. The evacuated tube solar thermal collectors are able to be “tipped up” and installed on the north side of the roof, while the PV panels lie flat on the south side. The problem with tipping up PV panels on the north side is that they would trap snow and catch the wind. Evacuated tubes can have the bottom portion in snow and allow wind through.
Additional Comments and Responses
You mentioned in an other comment you generated 454 KWH. It seems very low for August based on 7.71 KW of capacity but did you consume all the power or is it a mix of consumption and sales which were netted against your bill? Do you have a breakdown of consumption and excess power sold? Are both your PV units hooked up to the grid? Did you do a sensitivity scenario analysis comparing SO versus the “use plan”?
We have 3.43 kW of PV and 3.888 kW of thermal. (I think I mistyped the size of our PV array in one of my comments.)
The 454 kWh in August is electricity that we did not consume on site and was recorded by CMP’s outgoing meter on our house. Solar electricity consumed “behind the meter” does not show up on our power bill.
Our inverter records all of the energy flowing through it. So I could calculate solar electricity consumed “behind the meter” by taking a reading from my inverter and subtracting the reading on CMP’s outgoing meter. But for my purposes, periodic checks on the inverter (when I happen to be down in the basement) and CMP’s bills give me enough information to determine whether my system is working properly.
Most people think about power ratings on solar thermal systems in terms of BTU per hour, but I’ve used watts since that allows easier comparison across all of our energy systems. We have 3.43 kW of PV on our south roof and 3.888 kW of thermal on our north roof. The thermal output is circulated inside using a pressurized glycol loop. A heat exchanger in our hot water tank transfers this energy to our domestic hot water.
I did do a sensitivity analysis comparing the standard offer to the time of use plan. Our Nissan Leaf electric car comes with a timer that allows us to program when it charges, so we take advantage of the lower electricity prices for that. We have an old house (built in 1828). We did air sealing, added significant insulation in the attic and walls, and installed radiant floor heat on the first floor by putting up aluminum fins and tubing on the basement ceiling. At night our electric boiler heats up our entire first floor by circulating warm water in the aluminum fins on our basement ceiling, using lower-cost energy at off-peak times, so that by the time we wake up our house is up to temperature. During the day the heating system typically does not run.
We pay less for electricity under the time of use plan than we would under the standard option plan.
I looked at my [electricity] bill. I pay no separate fixed monthly service fee. Your service fee is another added expense for your system and nowhere near covers the true cost.
On a residential time of use bill in CMP’s territory, you’ll see a line called “service charge.” This service charge was on my power bills before I installed solar panels, and has remained on it since then.
On a CMP standard office bill you’ll see a line that says, “Delivery services up to 100 kWh.” You’ll pay this fee regardless of how much power you use.
I don’t know how other utilities label this fee, but I believe that every electric utility in Maine charges a minimum monthly service fee.
You may be right regarding true cost. I believe the rate case filings would include some estimates of the median and standard deviation of the cost to provide service. My house is in a downtown area so I’m guessing the marginal cost to provide service to us is actually quite low.
I don’t think you have come to grips with the fact that PV generated electricity is much more expensive [to] produce. It doesn’t matter who pays for it, but somebody must. The tooth fairy won’t be paying for the increased cost. In the end, when it [costs] more to produce somebody pays. Cheap PV panels have been just around the corner for the last 25 years. You also haven’t addressed the cost of storage of power for off hours which is more expensive than the generation.
The concept of a feed-in tariff is to spread the cost of generating electricity with PV across rate payers over 20 years. Due to the dependable nature of the energy source (the sun) and the inherent reliability of the panels (no moving parts), it reasonable to expect that PV equipment will produce power for the warranty period, which is typically 25 years. Any generator that buys fuel cannot realistically guarantee their cost of producing electricity over 25 years. It is an open question whether PV electricity will be much more expensive than natural gas electricity over the next two decades.
Cheap PV panels have arrived. The cost of solar panels is now less than $1 per watt. See, e.g., http://www.wholesalesolar.com/solar-panels.html
In my household, we could store solar power in our car. The Nissan Leaf has a 24 kWh battery. It is possible to buy an inverter kit to allow this battery to be used to power household appliances. We don’t do this, however, because all of the power we generate during the day is used in our neighborhood to power refrigerators, computers, microwave ovens, coffee pots, lights, etc.
The most cost-effective grid-scale storage options today are pumped storage. Maine could develop these because we have the water and the terrain. Other options for pumped storage include bladders on the sea floor and salt caverns.
Many research groups are studying how to transition to 100% renewable energy systems.
We lobby the government that is self interested in providing subsides to fossil fuel players to get subsidies for clean energy. This does not sound very effective.
There is an international organization that sees the problem in the same light as you do. 350.org is pursuing a divestment campaign to “to loosen the grip that coal, oil and gas companies have on our government and financial markets, so that we have a chance of living on a planet that looks something like the one we live on now.” The idea is that a successful divestment campaign would allow policies like feed-in tariff to get fair consideration.
Would you kindly provide proof that “we will have more choices for the clean energy technologies available to buy [if] we pay taxes”?
My conjecture is that well-invested taxes have the potential to provide break-throughs in clean energy technologies that would otherwise not occur. Simply paying taxes, however, is no guarantee that we will have more technology choices. We need to collect taxes and to invest that money wisely.
Solar photovoltaic panels would not be available today if past generations of United States tax payers had not provided the research and development subsidies that allowed the basic science to be pursued and the technology to be brought to market. History teaches that the investment horizons of private actors in competitive markets are too short to provide the resources necessary for sustained basic research programs. Successful large-scale basic science has been pursued with funding from large monopolies or governments. So if we want new technology choices, either we pay large rents to monopolies to allow them to devote resources for long-term research projects or we pay taxes for government-supported basic or applied research.
Low efficiency is an interesting point. If I buy 50 [DIY] solar collectors that produce the same as 30 collectors for $4,000 less, I do not see the importance of efficiency when weighed against affordability. More people afford the tech, the less use of fossil fuels. This idea of a standard seems to be a stumbling block at least with this idea.
People with outstanding engineering and construction skills can design and build home-grown solar thermal collectors that work. Other people can’t. It is actually quite difficult to build your own low-cost collectors that can withstand years of freeze-thaw cycles and maintain their integrity. That is why standards are a good idea if we are paying rebates: we want to reduce tax-payer or rate-payer risk of paying for systems that don’t work. It would be too costly and time consuming to examine every home-built system to determine if it will work for more than a few weeks.
With today’s technology it is not possible to build your own photovoltaic system, except in the limited sense that if you can find a source of photovoltaic material (such as reject panels from a manufacturer) and an inverter you can put together your own balance of system (frames, cover, wiring, mounts, etc.).
A feed-in tariff shifts the risk to the installer and owner of the power system. If you can’t build a system that reliably produces power, you don’t get paid. A feed-in tariff, unlike a rebate, is a “performance-based” incentive.
Competition in the marketplace has historically set higher standards while govt. favors or subsidies lower standards. This, I believe ( and I know I do not have all the answers and am willing to bounce ideas and knowledge around to get a better idea/concept), applies to research and development. If I get a check but don’t produce (govt subsidies) or must produce for return in investment (private), I believe we would be further ahead. I hate to use this example but the medical industry demonstrates this. NIH is way behind everyone in this field.
Actually if you look at peer-reviewed research output and the market valuation of companies that have commercialized technology, I believe the National Institutes of Health has a better track record than any private funder. Here’s how NIH describes itself,
The NIH invests over $30.9 billion annually in medical research for the American people.
More than 80% of the NIH’s funding is awarded through almost 50,000 competitive grants to more than 300,000 researchers at more than 2,500 universities, medical schools, and other research institutions in every state and around the world.
About 10% of the NIH’s budget supports projects conducted by nearly 6,000 scientists in its own laboratories, most of which are on the NIH campus in Bethesda, Maryland.
Setting aside the NIH as an example and returning to the energy market, I understand your point to be that we would be better off to allow competition rather than to subsidize a particular type of electricity generation through government action.
I think the key issue is whether or not you believe there is a market failure that the government can correct. I believe there are two market failures that should be corrected. First, we have not included real but hard-to-quantify externalities in the cost of generating electricity from fossil fuel. This is an intractable problem because the information costs are too high. We can’t measure and add up the actual costs of burning fossil fuel because it would cost too much to acquire that knowledge and because we can’t agree on how to quantify those costs. Second, there are huge transaction costs associated with developing Maine’s vast clean energy resources. A standard contract would eliminate the costs of negotiating individual contracts for every roof in Maine.
A feed-in tariff would be a simple way to fix market failures so that we can maximize public benefit from our energy market.
See your point in selling back the energy. There will be push back if it becomes prominent and then more restrictive regulations. Suggest homes just being energy independent for now. [Set] up a non profit at state level for each state to attract private and/or foundation funds for people to [generate] more clean energy. People who receive the help to do this financially, pay back the amount on a monthly basis that is affordable to them and the returning funds are re-invested into the next home. Seems the most cost efficient and effective way of doing this.
We already have this system here in Maine. It’s called the “Home Energy Savings Program.”
It is less cost efficient and less effective than a feed-in tariff, which is why most other countries have adopted a feed-in tariff.
[Updated April 25]
A public hearing for possibly the most important bill in the 126th Maine Legislature was held on Wednesday, April 24 at 1 pm before the Committee on Energy, Utilities and Technology. Working with 350 Maine, I’m happy to report that we packed the room!
LD 1085, “An Act To Establish the Renewable Energy Feed-in Tariff,” would make clean solar power economically viable for everyone in Maine.
Under current law you get “net metering” credits or fluctuating wholesale prices for feeding solar electricity to the grid. Under a feed-in tariff, you would get paid a fair price for it. This turns every sunny roof in Maine into a money-making business opportunity.
If this bill becomes law, we will unleash private investment to build sustainable energy infrastructure under local control. That infrastructure will require hiring people to do good work. Then we will have abundant, clean, and dependable energy that won’t go up in price to power our economy.
The feed-in tariff for renewable energy bill changes the rules of our electricity system. It gives everyone the right to be paid a fair price under a long-term contract for supplying our public grid with clean energy.
Right now that right is restricted to people (remember, corporations are people, too!) who can afford to lobby and negotiate special deals. For the small-scale projects that most families (and organizations and even towns) can afford that doesn’t make economic sense.
Because dirty energy generators don’t pay the full costs for pollution or depletion, they can offer electricity for less money than it costs to generate with clean technology. As a result, dirty electricity from fracked natural gas and even nuclear power from other states drive down the value of electricity.
Under a feed-in tariff you don’t have to compete on price with fossil fuel companies. A fair price for your clean power is set by tariff. That tariff rate is set so that you can earn a fair return on your investment. That means that a bank can offer you a loan to install solar knowing that you’ll have the income to repay the loan.
Once we have a feed in tariff law in effect in Maine, you can hire a qualified installer to put solar panels on your roof, easily get a bank loan to finance the system, sign a long-term contract with your local power company, and then get paid a fair price for every kilowatt hour of clean power you supply. Maine gets clean power, banks have a safe place to use their capital for a socially-beneficial purpose, and you get income for 20 years.
What this does is gives the little guy and gal a business opportunity. Every sunny roof could be a solar-powered money maker.
Feed-in tariffs have worked all over the world to boost rates of solar adoption. For example, in 2002 Germany got 0.03% of its electricity from solar. In 2012, that number was 5.8%. That’s a 200-fold increase in a decade. Here in the US, we got approximately 0.01% of our electricity from solar in 2012, even though we have a much better solar resource than Germany.
Studies show feed-in tariffs are the most effective public policy to increase investment in renewable energy. A 2008 report by the Commission of the European Communities concludes, “The effectiveness of policies promoting wind energy, biogas and photovoltaics technologies has been highest in countries using feed-in tariffs as their main support scheme.”
A feed-in tariff bill for Maine was killed in committee in 2009. The testimony on file shows overwhelming public support for it. However, the chair of the committee, John Hinck, decided that it was not an appropriate policy for Maine. In a private email message to a proponent of LD 1085, former representative Hinck acknowledged that the feed-in tariff is “really a game-changer” but was afraid of Governor Paul LePage’s reaction to it. His main fear is that the policy makes people not generating renewable energy effectively paying for others to do it. This, he argues, makes the policy ripe for political backlash.
All sides agree that a feed-in tariff accelerates the deployment of renewable energy. All sides agree that this investment in infrastructure creates jobs. All sides agree that the policy gives people an economic incentive to participate in this infrastructure investment. The question is whether we want Maine to have a clean energy future or continue down the path of depending on “cheap” fossil fuel.
What do you think?
If you see the value of a clean energy future, please support a feed-in tariff for Maine.
Thanks to a Maine Technology Institute grant, I’m part of a team doing research and a feasibility analysis “to plan for a one-acre greenhouse using a hybrid composite concrete framework, created at the University of Maine’s Advanced Structures & Composites Center, and a flexible photovoltaic membrane to provide electricity and heat.”
I know a lot more about high tunnels, polycarbonate greenhouses and HAF systems than I ever expected to know! But it’s really fun to learn more about how our food is grown now (check out the Backyard Farms greenhouse tomatoes!) and could be in the future.