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Alternative Energy for Housing

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)

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Alternative Energy for Housing

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

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

  3. 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

  4. 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

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

  6. 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

  7. 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

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

  9. 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

  10. 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

  11. Resources • U.S. Department of Energy: • Information on incentives, etc. http://www1.eere.energy.gov/solar/ • Heritage Solar: • Installs solar system in Southern CA • Can get estimates for your home online http://www.heritagesolar.com • http://science.howstuffworks.com/solar-cell.htm

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