Image Credit: Alex Cheimets
More Musings of an Energy Nerd
For our country to achieve the carbon emission reductions necessary to avoid a planetary catastrophe, many experts contend that almost every house in the country will need to have retrofit work that achieves deep cuts in energy use.
There’s a major stumbling block, however: deep energy retrofits are frighteningly expensive —in the range of $80,000 to $250,000 per house. With costs so high, many homeowners are asking: how long is the payback period for a deep-energy retrofit?
A new high-R skin
A deep-energy retrofit is a remodeling project that aims to reduce a home’s energy use by 50% to 75%. In cold climates, these retrofits specify R-40 walls, R-60 roofs, and triple-glazed windows. This usually requires the removal and demolition of the home’s existing siding and roofing.
Once the walls and roof have been covered with a thick layer of rigid foam, new siding and roofing are installed, along with new triple-glazed windows.
Only the wealthiest Americans — or those with easy access to credit — can afford a deep-energy retrofit:
- A deep-energy retrofit in Marlboro, Vermont cost $107,000.
- Alex Cheimets estimates that the cost to complete a deep-energy retrofit of his duplex in Arlington, Mass. — including the value of donated materials — was about $140,000.
- The deep-energy retrofit of Peter Yost’s single-family home in Brattleboro, Vermont cost $85,000 — not including labor.
- The cost of a partial deep-energy retrofit (not including the basement or attic) at the 3,000-square-foot Somerville, Mass. duplex owned by Cador Price Jones was $117,000.
- The cost of the deep-energy retrofit of a single-family home in Boulder, Colo. was $675,000. (This amount included a 6-kW PV system and extensive remodeling work that was not directly related to energy efficiency.)
Is that much insulation cost effective?
When skeptics question the cost-effectiveness of these expensive retrofits, superinsulation advocates point to the flawed logic behind cost-effectiveness calculations based…
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57 Comments
Glad to see this
Martin-
I'm happy to see this point being made, although I would propose some minor modifications to your final advice.
I would not consider a kWh provided by PV to be completely equivalent to a kWh saved by a more efficient building. The efficiency kWh will likely last longer, have a smaller environmental impact (PV production isn't pretty), is less susceptible to breakage, and may provide other benefits (like comfort). I'm not sure how much to penalize PV but I would probably compare efficiency improvements to the cost of PV plus 20% or so.
Also, when comparing the next efficiency step to PV, we should assess the actual efficiency-related cost of the improvement net of any non-energy benefits. You do mention this some -- if the efficiency improvement leads to a new roof or new siding then I would only count how much more it cost than the value of the home improvement (including the value of increased lifespan of the materials replaced). This can get a little subjective but of course there's lots of uncertainty in making these trade-offs. I think the bottom line is that it usually doesn't make much sense to make an energy improvement with a payback far longer than PV.
Given the RD&D nature of deep energy retrofits today, I'm glad people are willing to try these things out to help us all figure out what we can actually accomplish and how much it costs and how well it works or doesn't. It's key that people document these projects so we can learn. But for the broader replication, we need to look at all the options carefully.
I agree
Michael,
Although the advice I gave in the last paragraph of the blog could have been more nuanced, I tried to address the points you raised in the four bullet points near the end of the blog. You're right.
It's all a bit confusing...
The energy-efficiency pyramid approach to energy conservation has always made sense to me.
If a payback scenario favors renewable energy then what is achieved is the consumption of resources for the sake of producing more energy (instead of consuming resources to reduce the same home's energy demands).
If the critical need is to reduce energy consumtion to avoid global catastrophe, then doesn't it make more sense to invest first in a deep-energy retrofit?
It depends on the measure
Lucas,
There's no shortcut to performing an energy analysis before deciding on retrofit measures. Prioritizing (and costing out) proposed retrofit measures should be part of any home energy audit; there are many software programs available to help.
Does it make sense to install R-40 wall insulation? For new construction in a cold climate, the answer is often yes. When it comes to adding R-40 as part of a retrofit, however, the issue becomes complicated. It's expensive to strip the siding off a home, install thick rigid foam, and address all of the window flashing issues that accompany such work. It's possible that there are cheaper ways to reduce fossil-fuel use than retrofitting foam onto an existing home.
The answer to the question is project-dependent. It depends on the climate, the condition of the siding, and the cost of the proposed work.
Heating a home with PV and a ductless minisplit system is expensive; there is also an embodied energy cost associated with purchasing tens of thousands of dollars of new equipment. However, once the PV array is installed, it should easily last for 30 years, and it will produce electricity without emitting any carbon.
We are facing a global climate crisis. There is no single magic bullet to address the crisis; our response will necessarily include energy retrofit work as well as new PV capacity. Since the required work will be very expensive, it makes sense to spend our money well. Sometimes, an investment in PV makes more sense than extreme insulation measures.
Gaps in your story
Though I agree that your question is a question worth asking, I believe your story has not included important information, including some information we discussed.
1) A Deep Energy Retrofit would be done in phases. Insulating the walls ONLY when re-siding, the roof ONLY when re-roofing. Nearly $60,000 of the $140,000 cost you quote for our project is a cost we would need to carry anyway for the roofing and siding.
2) About $15K - $20K of our project was windows which are not strictly required, though very nice to have.
3) So even though a research project, the marginal cost of installing super insulation and 2 HRVs was $60K - $65K divided between two households (this is a 2-family condo). That's about $30,000 per unit to use rooms which were un-usable in winter (comfort) and efficiency that will last as long at the house (savings and security). Most of the projects you mentioned included the conditioning of unconditioned space, that is increasing the size of the home without increasing the footprint.
4) You indicated that the materials of super-insulation will "probably" last longer than a PV system and a mini-split system. Probably? It would be unbelievable if PV or min-splits survived longer than 1/3 or 1/4 the life of a deep energy retrofit, though a small mini-split system is a great addition to a Deep Energy Retrofit to take carbon out of the project.
5) All of the projects you mentioned (except Colorado which I know nothing about) were research projects. Explorations of materials, methods and performance. It is far too early to generalize on the costs of these types of retrofits based on prototypes.
6) As an idea of what current single family home projects look like. A 1200 ft2 home in Milbury, Mass. is getting new siding, new windows, new roof, passive house super insulation and a backup heating system for $70K. About 1/2 of that is the insulation system and heat exchange which makes the conditioning of the house virtually free.
The questions you ask are valid, but your answers seem incomplete.
Thanks, Alex — excellent points
Alex,
I appreciate the numbers you have shared. All of the points you raise are excellent.
Some homes shouldn't be remodeled
I like your take on this subject, Martin. I have been skeptical of the value of some of the extremely expensive deep energy retrofits, and have had arguments with people who advocate for them. I think that we need to look at each house individually, and when we do, we will likely determine that some homes are not worth improving, rather they should be deconstructed and a new house built to replace them. I think that we might find that you will end up with a better house at little or no additional cost.
I would suggest that space
I would suggest that space heating scale solar thermal should be on the table in this discussion in addition to PV,
Response to Mark
Mark,
All retrofit measures should be on the table; every measure needs to be looked at closely to see whether the expected energy savings attributable to the measure are justified by the measure's cost.
The cost of a PV system is a uniquely useful benchmark, however, since it has the potential to set an upper limit on retrofit measure costs.
Renovation costs
Martin,
This is a very complicated discussion, as people have already commented on. The major issue is that Deep Energy Retrofits are rarely performed in isolation. They are almost always linked to renovation, and often significant renovation at that. We are working on several projects that would qualify as DER's, but they all came to our office as renovation work first, and the line between the DER and the remodeling is very difficult to draw.
Should the cost of the DER be the total cost of the windows or insulation that were installed? The incremental $ amount that was more than code required? Those are two very different quantities, especially considering that both are still a sub-set of the total project cost.
What I do know as an architect is that people can spend large amounts of money on any renovation for pleasure, and some kitchens we have worked on could easily pay for the equivalent of two DER's... We have had clients who have clearly enjoyed tinkering with ACH50 and insulation as much as others have fussed over countertops.
Good conversation.
Jesse Thompson
Kaplan Thompson Architects
Renovation for pleasure
Jesse,
You have identified an important subset of those interested in deep-energy retrofits: the hobbyists who take pleasure in having the lowest energy bills in town. I love these hobbyists. Their hobby makes a lot more sense to me than scrap-booking or motorcycle racing. God bless 'em.
Eventually, though, our policy-makers in Washington will need to devise programs to encourage deep-energy retrofits on a huge scale. If these programs ever get off the ground, it's a fair guess that most of the homes that the programs will target will not be contemplating a major home renovation project. They're just going to be addressing very high energy bills, or new carbon taxes, or new government mandates to limit home energy use. These people aren't necessarily in the market for a new kitchen. The question is, does a deep-energy retrofit make sense for such a homeowner?
Before we ramp up such programs, we need more data from completed projects. And we need designers to be sharpening their pencils -- so they realize that their ultimate goal is carbon reduction, not just lower energy bills.
If a PV array can reduce carbon emissions at a lower cost than thick insulation, then I'm all in favor of incorporating PVs into our deep-energy retrofits.
Pricey energy retrofits
Some of the costs mentioned with the energy retrofits show all the more need to build new homes with low energy demands. Retrofits are expensive and in most cases not cost effective, the energy saved does not begin to cover the cost of the energy upgrade.
Update from Alex C.
Hi Alex,
thanks for being a pioneer
(you know....the guys with arrows in their backs ;-0)
How are the 2 homes performing compared to pre-retrofit?
Have you learned anything that you might do different next time?
Advice for others?
Deep Retrofit
I am glad to see you addressing this issue. So far the deep retrofit costs are all over the map. This is a good beginning to see if these costs can be bounded in some way.
I have done two retrofits by thickening the walls to the inside by building another 2 x 4 wall some distance away the existing walls. I stripped off the sheet rock and old insulation, much of which had settled.
Another question that has yet to be addressed is just how much of the PV energy generated that goes into the grid is used. Currently the amount is so small that its in the noise level. My knowledge of power systems is that there is a lot of complexity in managing the grid and power plants are scheduled well in advance to make sure loads can be met. This is well known for wind systems. So how much of the rated PV electricity is actually going out to uses on a grid tied system.
Finally, the same PV panel in different locations generates twice the energy for example Seattle vs San Diego. Thus the price comparison to retrofitting can have quite a range.
Pat Murphy
Is the PV electricity from grid connected systems being used?
Pat,
The brief answer to your question — "Is the PV electricity from grid connected systems being used?" — is "Yes."
Grid operators are skilled at adjusting peak-load plants (generally small natural-gas fired plants) so that they are fired only when necessary. On sunny afternoons, when PV power generation is at its peak, electricity use is generally high, and grid operators are happy to put the PV power to use. The greater the available PV electricity, the less likely that gas-fired peak plants will need to be fired up.
The problem you bring up — PV power production that goes to waste — is a problem with off-grid PV systems, not grid-tied PV systems. My own house has an off-grid PV system, and my summertime PV production is often wasted. If my house were connected to the grid, the electricity could easily be put to use.
Policy vs. Private Behavior
Martin,
This is the key issue: what Federal or State policy should be towards DERs in terms of financial incentives.
We need to make all the classic innovations happen (since we're still at the early stage in this experiment): continue the research, bring costs down, and drive innovation. If we're talking about which policies we should be advocating for, then it makes a lot of sense to better clarify the point at which renewable generation is more cost effective than energy retrofits.
But that's why your opening paragraph seems needlessly contentious, in claiming that DERs cost from $80,000 - $250,000, when these are the total cost of personal renovations linked to deep energy retrofits. From personal experience, I know that the DER cost of projects like this is nowhere near that expensive. It's perhaps in the $30,000 - $50,000 range, which is still very expensive, and perhaps more expensive than the energy dollars saved, if that is the only metric we judge these projects by.
I wouldn't want sensationalism to slow this innovation down. We'll get a lot cheaper and faster at this in a few more years once these techniques have been better codified and the results analyzed for efficacy. Construction is a very slow process to learn from...
Jesse Thompson
Kaplan Thompson Architects
http://www.kaplanthompson.com
Price and NEBs
The first thing I would point out is that adding a mechanical system 'fix' to drop energy use does not result in an energy efficient building. The technological fix is, in the end, a bandaid solution, with a much shorter lifespan than what could be seen as 'permanent' components of the house. It is always cheaper to save a Watt, right? The environmental cost of PV was alluded to above. Most mechanical systems are not pretty, either, in what is required to manufacture them.
Non-energy benefits are under-represented in most discussions about energy retrofits, with the bottom line being based on total resource cost-esque calculations: all the costs incurred vs. energy saved. Of course energy savings lose out in this scenario.
Adding in the quantifiable value of improving older housing in terms of comfort (always #1 or #2 on surveys), durability (based on materials choices), improved air quality and reduction in health-related costs and minimized use of new resources (vs. demolition and new construction costs on a developed site) change this somewhat.
Less easily quantified is the potential increase in resale value for a low-energy house in a neighbourhood that has established services (ie, public transport, schools etc.) in the immediate vicinity, with an attendant shorter sales window. This would change the balance of the equation again.
Even less easily quantifiable are the reasons why homeowners would choose to have a deep energy retrofit done. And these reasons have value. When I am working with a client who throws down the statement "I'll consider energy efficiency measures if they have a payback of X years or less", I make a point of asking what the payback period might be on other choices being made in the house that are of a less 'permanent' nature, such as stainless steel appliances. Because really, food stays cold or gets hot, dishes get washed, regardless of the finish...And now the comparison is more or less total resource cost vs. total associated benefits, and makes more sense.
On energy-efficiency retrofits
Jesse and Shawna,
For years, I have been a strong advocate in favor of energy-efficiency retrofit work, and I continue to advocate for these measures at every turn. Most houses in the U.S. have very high rates of air leakage, and most houses would quickly recoup the savings from $15,000 work of air-tightening measures, duct sealing, and improved attic insulation.
Jesse, I'd love to see an example of a $30,000 deep-energy retrofit — which I understand to mean (in a cold climate) beefing up wall insulation to R-40, the ceiling insulation to R-60, and the adding a third layer of glazing to the windows, while addressing air leakage and thermal bridges at the rim joists. If you've done it, I'm excited. Show me the photos and document the costs — we will trumpet your success here at GBA.
Shawna, Here's the main reason that we all have to keep the cost of PV-generated electricity in mind: it simply sets an upper limit for the likely cost of energy in the future. Knowing this number doesn't require a builder to put a PV array on the roof of every project. After all, in the future we may be buying our electricity from a central utility that produces electricity from PV arrays and wind generators at central locations. But this upper limit on the cost of energy focuses our attention on whether a proposed retrofit measure makes economic sense.
Some retrofits are cash positive
Shawna,
Your post is one of the best I have read on GBA in quite some time. You are correct, the best way to save energy is reduce the use. There are countless improvements to be made to existing housing that will give a good return on investment. Comfort and durability should go hand in hand with any energy retrofit. We really need a better way to evaluate the energy improved residence, something like a total monthly cost, mortgage, taxes and utilities.
We did a modest improvement to our own house in 2005 at a total cost of 8k. The work included a new 95% ECM fan gas furnace, air sealing, attic and foundation insulation. We now save 600 therms annually and the electric bill is 100 kWh less per month due to the ECM fan and cfl's. The 8k investment is saving about $700.00 per year and we replaced an ancient gas furnace in the process.
Our energy performance is not yet stellar but our gas usage is about 62% of what new homes built today use, our house is vintage 1978.
A small addition and a third leg for the scenario
Hi Martin,
Just one small addition to your list of concerns you address regarding your hypothetical case would also be orientation of the house being well beyond 30 degrees (of course one can angle the PV on the roof it just looks bad) of due South. Also, many established neighborhoods have too much shading. So even if one has the space the efficiency of the panels would be low and this needs to be part of our models discounting to understand their true benefit.
One more thing I would like to throw out here for discussion is a third option in the scenario to consider would be a rational individual home buyer who purchase s100% renewable electricity (which is possible in some areas of the country) from the grid. I actually haven't thought through this completely and I really don't know all the considerations to think about with regards to grid purchased renewables. But this seems like a logical third leg in a possible cost benefit scenario (from a rational actor perspective which is basically what Martin's model is). Of course how we assess the risk of energy price inflation becomes crucial when considering grid purchase renewables at least as part of the solution. I realize this gets us away from dealing with demand which is crucial to any viable climate change mitigation and adaption strategy but this might go through the thoughts of many homeowners. It is also not realistic with current tech on a mass scale as well (last summers near brown outs in Texas are a good example). I am all for retrofits because of the societal and comfort benefits but I just wanted to throw this out here for discussion.
New Houses
There should be a National Consumer Disclosure (i.e. water heaters) on new homes that lists heating and cooling costs per year. That might slow the building of inefficient spec houses and condos that will required expensive retrofits in the near future.
If lenders and/or local building codes required PV to be installed on all new homes it might reduce PV costs for all.
Energy retrofits
I live in a 1450 sf brick veneer home built 50 years ago. I know that you consider it as an antique that should be eliminated, however I enjoy living in it and if someone gave me a million dollars I probably would not move. During the last 24 years I have done much to make the house energy efficient. The attic insulation was raised to about R-30. The old oil fired furnace was replaced with a new high-efficient gas furnace. The walls have been foamed. The double paned windows that replaced the aluminum awning windows were properly installed to eliminate air and water infiltration. Now your article is saying that I need to remove the brick to add more wall insulation. And that I must add another 12 inches of attic insulation. I don't understand why I must replace my roof as it has nothing to do with the energy efficiency of the house. I have been a long time subscriber to your magazine and I realise that the moderate low cost home such as mine has no right to exist in your world where a "low cost" remodel costs 50% more than my house would cost to replace totally.
How about broadening your thinking to cover the average home such as mine.
Take a deep breath, John
John,
You seem to have missed the point of my article. I agree with you completely. My article points out that deep-energy retrofits of houses like yours may not make sense.
If you re-read what I wrote, I think you'll agree that we see eye to eye.
Isn't cost what got us here in the first place?
It seems to me that using a strict cost analysis of energy prices for efficiency decisions is the very reason we're in the mess we're in now - specifically because our low energy prices that don't reflect the externalities involved. Continuing on that same path is inviting continued and increasing problems. For that matter:
1) If one makes decisions on cost basis alone, isn't it tough to argue for exceeding the building code minimums? After all, the codes exist to require people to do something they would not do otherwise. Is your supposition that people are currently making foolish cost decisions regarding efficiency? I would argue that they are making very RATIONAL decisions based on the economic costs, but that the signals (prices) are wrong.
2) The issue of excess summer PV energy production is one you have not adequately acknowledged, IM(H)O. In a heating climate, a kWh (or Btu) or energy saved with insulation in winter is not directly replaced by a kWh (or Btu) of PV generated electricity, it is OFFSET by energy produced in summer. This is because the size of a PV system to directly offset winter energy use would be ENORMOUS. If one enters the realm of energy/carbon offset, PV isn't EVEN CLOSE to the most cost effective means of achieving this. Well out in front is replacing inefficient appliances for you and all your neighbors, halting deforestation/reforestation, etc. (see the McKinsey report and others.) In fact, one could even argue that it would be better to DO NOTHING at present, since PV will be more efficient and less expensive in the future - "I'll wait until 2050, then buy a solar system to offset my energy use between now and then!"
I do not pretend that cost is an important issue, it is crucial, but as a nation we have been arguing against the costs of efficiency for decades, and we're the 2nd largest emitter of carbon in the world and 6th per capita. In the meantime, Europeans have taking the cause of efficiency up in earnest, to admirable effect - not only producing vastly more efficient buildings, but more comfortable, durable and heathy too. Somehow, the words "passive" and "house" spring to mind!!! ;-)
Also missing from you discussion is the path we are to take for new construction, which will resume, and continue, in earnest. Unfortunately, the US has a dismal record on energy efficiency, and it is due largely to the reasoning you employ above. It is time for a change!!!
Pricing externalities
Graham,
We agree more than you seem willing to acknowledge.
Of course energy prices should reflect externalities — that is, the environmental costs of carbon build-up in the atmosphere. That's why we're all scratching out heads trying to figure out the upper limit on energy costs in a carbon-neutral future. I'm proposing that the cost of energy in this (yet to be seen) carbon-neutral future will be no higher than the current cost of PV-generated electricity.
You wrote, "If one enters the realm of energy/carbon offset, PV isn't EVEN CLOSE to the most cost effective means of achieving this." I agree. That's why the current cost of PV-generated electricity is an upper limit to likely future energy costs. It is very easy to argue that the actual cost is likely to be lower. Your statement reinforces my point.
Obviously, I agree that the U.S. has a dismal record on energy efficiency. That's why I've been urging (for many years) that builders improve the energy performance of new buildings, that government increase energy code stringency, and that we undertake a massive effort to improve the energy performance of existing buildings.
It's all relative
I think the real or bigger problem is that as I look around my town (Brattleboro) I see that most of the houses most in need of an energy retrofit -not even a DEEP energy retrofit, are owned by people (myself included) who could not spend even 10k.
Bob Swinburne
http://swinburnearchitect.com/wordpress/
Cost is the real kicker in my book
I have a medium sized (1400 sqft) 1925 bungalow in Piedmont North Carolina with a detached story and a half garage. The garage is un finished inside and slated to be my workshop and home office space (as well as parking), so it will get spray foamed (the higher cost relative to batts is offset in my mind by the time saved in stopping all air leaks), as part of the process of finishing and conditioning the space with high efficiency mini-split units.
The house on the other hand already has some insulation and is occupied. It needs a new roof, so I will likely upgrade the attic insulation when I do the roof (minimal additional labor costs). But given that the house was just reshingled a few years before we bought it I can't see any sense in stripping the siding to upgrade the wall insulation. As for the windows we have double pane windows that were installed with daylight visible between the jamb and the wall! If i can find all of them (they are slowly showing up in strange places) I will likely rehab and reinstall the original windows along with install exterior storms. But that will have to wait until I can afford the time and/or expense.
As a side note, Preservation North Carolina (http://www.presnc.org/) just this weekend video taped and will soon be posting a home energy audit of an older local home along with home owner interviews. The aim of the project (which is on going) is to show that it is reasonable (and greener) to renovate than tear down and build new.
Chris
PACE financing
One of the biggest hurdles regarding investing in measures that have a long payback period--such as deep energy retrofits, even in more extreme climates--is the intimidating upfront cost. It might be the "right thing to do", but in reality most people frankly aren't willing to shell out an additional $30-50K (or whatever the relevant cost differential is for a given project) when they might be moving in 5 or 10yrs. Same goes for solar. Thanks to strong incentives in many states, solar's gotten a boost...
But the argument of deep energy vs. PV aside, the upfront cost barrier still needs to be tackled. I think the PACE (property assessed clean energy, http://pacefinancing.org) financing programs that have boomed since Berkeley developed their program a few years ago is a key to overcoming this. When property owners can finance their deep energy retrofit and end up close to cost-neutral (or sometimes even in the black), going forward is a no-brainer--as shown by the rapid selling out of these programs. Santa Rosa has already allocated $24 million to 770 projects in only a year!
PACE type programs, combined w/ properly incentivizing the loading order of improvements on a project (ie--let's see for whole-systems energy efficiency what we've seen for solar) would be huge.
It's all related...
Robert, this is the crux, eh? What I see here in Canada, is the low-hanging fruit being spoiled. By that, I mean we're short-circuiting deeper energy retrofits because of government-run energy efficiency programs that look at 20 to 30 percent reductions as adequate, and any rebates/incentives are tied to minimal reductions.
In terms of making deep energy retrofits cost-effective, we look at phases (as someone above mentioned) that tie in with regular/sporadic maintenance and durability issues. F'rinstance, I don't recommend my clients strip siding off until it's time is due, and then, instead of the 1 inch of foam being recommended by our national energy reduction program, we go for 3 or 4 inches, and ensure we've got a really good exterior air barrier (where windows can be replaced at the same time, that's good, but inserts can be planned for a later phase, for example). Extra costs due to energy efficiency measures are then a premium on straightforward maintenance and upkeep expenses.
The cost to purchase additional foam to wrap a reasonably typical house in a large market in Eastern Canada is roughly $500 to $700 per inch of thickness. There is, of course, additional expenditure on fasteners to accommodate thicker walls, trim details around windows, etc. which vary according to house type, age and style.
Of course, one needs cash or adequate credit to do the siding replacement in the first place...
I am concerned that, while deep energy retrofits, by definition, will cost more than a minimal energy upgrade, that we are seeing a marginalization of the possible work because the 'showcase' retrofits are just that: all the work done at once, with all the bells and whistles that make a good case study. Weatherization/air sealing work, as was noted above, is the least expensive measure that can be taken with the biggest bang on most houses. Unfortunately it's the least sexy aspect of any building project, unless you're a energy efficiency wonk for whom pictures of crappy buildings gives a whole different twist to 'homemade' porn.
So, just like high-end 'green' and 'net zero' houses, deep energy retrofits become something that is out of reach for most homeowners. It's been my experience that demonstration projects have a way of demonstrating what not to do, but if they were more ordinary, they wouldn't get any press.
What about night and winter?
You theorize that the cost of energy at any time will never be higher than the current cost of PV power. Even if this theory is true, the price you quote for PV power is a yearly average, which does not reflect the cost of procuring power when it is needed for heating. In summer, the cost per watt is quite a bit lower than the yearly average, in winter, quite a bit higher.
So, again, even if your theory is correct, the specific calculations are WAY off. As an example, suppose we run out of fossil fuel tomorrow. How much PV is needed to heat a house in winter? Answer - a LOT MORE than the average yearly output times the demand. Since the power isn't stored, a watt saved in winter is quite a bit different than a watt generated in summer. In a heating climate with little summer cooling load, a winter watt is a good deal more valuable than a summer watt due to scarcity, no? Unless we get a Buckminster Fuller worldwide grid set up and start getting winter PV power from Chile, along with winter fruits and vegetables, your proposed solution to the energy and climate crisis has a big problem...
Furthermore, if you do the math on supplying the country's current energy needs with PV, we need a PV array the size of the state of Arkansas (http://www.sacbee.com/ourregion/story/1910379.html) Even if PV power is the most expensive, and demanded, it doesn't mean it's AVAILABLE in the quantity required.
I'm gonna have to bet on the European approach on this one...
why would you do this?
Your premise is flawed, there is no coming "planetary catastrophe". It is not a bad idea to make homes more efficient but it is ridiculous to spend the kind of money this article is talking about to never break even (50 yrs) or see a pay back. When the light bulb was invented it didn't have to be forced on everyone, it was a good idea, it worked great and everyone wanted one (or more). People can do what ever they want with their own money, but at the current costs for deep energy retrofits and PV systems are only a novelty. My customers want pratical solutions, no one is going into debt to buy this kind of stuff.
Winter cost of renewable energy
Graham,
It would be illogical for a utility to depend only on PV arrays to generate electricity in the winter. Fortunately, other sources of renewable energy are available, including wind, hydro, wave, and tidal power.
None of us knows for sure what the future cost of energy will be. But my proposed guide — to assume that the cost of electricity is unlikely to be higher than the current cost of PV-generated electricity — makes a lot of sense. After all, wind-generated electricity is already significantly cheaper than PV-generated electricity.
Response to Anonymous
Anonymous,
Your question — "Why would you do this?" — is the same question I am asking. Right now, the answer is quite murky. There are very few homeowners who see any reason to borrow money for a deep-energy retrofit, so I agree with you.
I'm not so sure...
Anonymous,
What makes you so sure? Have you discovered a harness for zero-point energy?
my great grand daughter disagrees(she's not born yet)
Martin,
Your prime assumption that "the cost of PV-generated electricity sets an upper limit for the likely cost of energy in the future" seems a little simplistic. Forecasting upper limits for the cost of energy seems extremely difficult. You say it's "likely" but can you tell us specifically what this is based on? I certainly can't refute your idea, but I have a feeling that my great grand daughter will be able to explain why this is not correct. Conceptually, Graham Irwin's points are much more powerful than yours. I can't help but think that in the future, the value of a kWh in the middle of winter when everyone is using mechanical solutions to heat their home will have little to do with yearly average PV outputs. But you seem to think otherwise...Is this because of big wind farms, or some other renewable systems not yet developed? That would have to be a heck of a lot of wind power.
On energy prices
Dave,
Forecasting is tricky, and people who make forecasts are putting targets on their backs. Of course I don't know the answer to your question.
I know that right now, tens of thousands of Americans are getting full credit on their electric bills for the electricity generated by their net-metered rooftop PV arrays. I know that PV power makes up a trivial percentage of the electricity generated in the U.S., so that the grid can absorb orders of magnitude increases in PV production before any seasonal imbalances might arise.
I know that the cost of PV module production is dropping.
I know that wind-generated electricity is now competitive with fossil-fuel-generated electricity in many parts of the world, and is already much cheaper than PV electricity.
The fact of the matter is, in almost any location in the country, an interested homeowner can purchase a PV array right now that is sized to supply the owner's annual electricity use, and should end up with minimal bill that only reflects meter-reading charges.
Other selling points
Our firm has been working to get a viable DER business off the ground for the last two years. We practice in an extremely cold climate (MN). After the first year, we found that there were not enough selling points to overcome the first-day cost—and even calculations favoring a DER approach in the long run may not entice owners enough to go into debt—let alone their banks who cannot begin to understand what DER actually is and why it would create value and equity.
Year two has been more successful for us, as we have been focusing on more immediately tangible advantages of indoor environmental quality and health, as well as comfort (a big thing in a cold climate) and survivability. In addition, we are trying to single out the DER measures as incremental costs when tackling obsolescence like new siding or roofing. This makes DER costs much more palatable, and in essence, may be closer to the truth. IMHO, any ROI calculation should be based on the incremental cost, only.
I agree with Jesse's earlier comment that most DER projects end up being a mixed bag of deferred maintenance, solution to architectural inadequacy, and general improvement of a structure. Within that scope, it's easy to incorporate DER measures, but only if the overall cost for the project is large enough to do the whole thing in the first place. Short of that, we offer our clients master plans that outline a holistic and comprehensive project, including all of the above fixes and improvements—and then help them to create a roadmap to how to tackle the issues over time.
Only time will tell if this approach can prove successful. In the meanwhile, I agree with others like Graham that the cheapest kWh is the one that is not used, and that "embedded" and "dumb" technologies like insulation, that last the entire lifecycle of a building and do not need any maintenance or replacement, will ultimately prevail over renewable energy solutions. Think of an insulation-$ spent as a lifecylce-$, whereas a mechanical-$ may be a 15-year-$, and a renewable energy system-$ maybe a 30-year-$. Arguably, that insulation-$ is the better investment based on this paradigm.
In general, I feel that we have a demand-issue, and not a supply-issue, and I wish that this were recognized more publicly. This entire discussion could be obsolete if we had that understanding. At the end of the day, we are talking about resource-management. We can either chose to use what we have left wisely now and create assets, or see how long it will last operating a bunch of liabilities (as in energy hogs).
Once again, thanks for kicking off a great subject, Martin. I am excited to chime in with so many other smart designers, many of which I had the pleasure of meeting in person already.
Insulation $ vs. mechanical $ vs. renewable $
Tim,
Great points. I've spent 15 or 20 years writing about the importance of improving homes' thermal envelopes, so it's strange to be in the position of defending the proposition that PV sometimes makes more sense than insulation. This is the opposite argument from the one I'm comfortable with.
Although I've lived with PV for 30 years, I usually tell people that PV is an expensive toy.
As I've written before, whenever I realize that a retrofit measure (or a new-home measure, for that matter) is more expensive than PV, an alarm bell goes off in my brain. I think, "More expensive than PV? But PV is really, really expensive!"
As designers and builders of energy-efficient homes, we need to be smart, and we need to give good advice. Every time we cross the line beyond the PV-cost threshold, we need to do so with our eyes open. We need to stop and think. We need to ask ourselves, "Does this investment of $20,000 make sense?"
It's important that we don't design a bunch of projects that are so expensive that they are used as laughingstocks or examples of irrelevance.
Final point: my 30-year-old PV module is still chugging away. I plan to pull it off the roof this summer and put the digital multimeter to it to see how it's doing. I'll write it up for an upcoming blog.
Combining retrofit work with PV
[The following comment comes from Ward Lutz]
Martin,
I performed a deep retrofit of my small house (580 ft2) last summer. I am in the process of monitoring energy use to compare pre vs. post electricity use. Extrapolation of data to date indicates 7600 kWh [pre-retrofit] vs 1700 kWh [post-retrofit] annual use.
I have made some PV panel cost estimates for my situation using the following website: http://www.find-solar.org/index.php?page=solar-calculator
PV panel costs to provide total annual use before retrofit (7600 kWh/yr) $60,030 without state (Ohio) & federal government support $22,011, cost to provide total annual use post retrofit (1700 kWh extrapolated from data to date) is $15,000 without - $10,500 with government support. Ohio supports only 2kW and above. My retrofit cost was $36,000.
My south facing roof surface area is 14x24 feet (336 sq. ft.) which will accommodate PV production of 3800 kWh / yr. Cost of PV panels for 3800 kWh/yr is $33,400 without - $13.360 with government support.
Obviously, government support plays a big part in the current cost of PV panels. One has to wonder how much longer this support will be available. Given the limited area available for siting PV panels it is appropriate for me,in my opinion, to use a combination of retrofitting (energy use curtailment) and PV panel production to provide electricity using non fossil fuel energy sources. Further, it appears to me that it is unlikely that there is any situation in which energy use curtailment is not an important part of the mix. The portion of energy curtailment to PV panel installation is situationally dependent.
Ward Lutz
Thanks for the details on your house
Ward,
Thanks for providing the data and cost information on your retrofit. It sounds like you are performing exactly the type of analysis I recommend.
I agree with your conclusion: most energy retrofit jobs that aim at significant energy reduction (in the range advocated by deep-energy retrofit advocates) will require a combination of energy-curtailment measures and PV modules.
One more response to Tim
Tim,
One more comment on your stated preference for "dumb technologies like insulation, that last the entire lifecycle of a building and do not need any maintenance or replacement" — a preference I share.
Remember, using the cost of PV electricity as a guide to determining the upper cost limit for retrofit measures does NOT mean that a homeowner needs to install and maintain a PV system. The homeowner may prefer to let the local utility maintain a neighborhood PV array and wind farm.
The point of discussing the cost of PV electricity is to establish an upper limit for sensible retrofit costs. I agree that most homeowners don't want the maintenance headaches associated with generating their own electricity.
other musings
Great discussion on this article. This issue is (I would guess) more pertinent here in coastal Southern California. We're working on coming up with a roadmap for existing building types for aggressive energy retrofits, but when you don't need air conditioning and heating bills are minimal, PV looks better and better. (Plus everyone loves their sexy new toy!)
One topic that I thought might deserve some consideration is how energy retrofits interface with the local real estate climate and building lifespans. Someone earlier made the point that people would obviously be loathe to shell out much money at all if they might move in 5 years. PACE programs will begin to address this. Another facet, though, is the building life. Not to be too skeptical about quality, but how long will the hundreds of thousands of housing McUnits that went up in a flash here in SoCal (and elsewhere) over the last decade be around -- 25 years? maybe 50? Probably not 100. How does this timeline change the equation. In other words, if the home will only be around for 20 more years, and whatever follows it will be built to much higher energy standards, maybe a PV system is a better answer - and it could theoretically be salvaged at the end and keep chugging away another 20 years or more (probably more likely to be salvaged since it's viewed as an expensive mechanical add-on).
Obviously this all highlights the need for more stringent energy codes now, so the "advanced" homes of today aren't just the expensive retrofit candidates 5 years from now.
Good points, Brendan
Brendan,
I agree — not all houses are likely to last 100 years. (I got a lot of flak on this issue a while back when I wrote a blog questioning whether durability should be enshrined as an inviolable tenet of green construction; see "Green Homes Don't Have to Be Durable.")
PV modules can indeed be salvaged and reused; when the Carizzo Plain PV plant in California sold off some discolored (but still functioning) PV modules in the late 1980s, I bought some and installed them on my roof. They're still working fine.
Love this discussion
Anyone who has followed you, Martin, with half a brain for as long as you've been at it (through JLC and EDU and now GBA) would have to agree that you are not in a comfort spot recommending PVs over super insulation as a retrofit. I commend your examination and insight. We (anyone with the perseverance to delve this far into the discussion) are lucky for getting our heads rearranged, as is fitting a deep examination.
All I can add here is an appeal that perhaps the issue should never be one of payback but really one of value. What do we really value? Is energy efficiency of buildings something we value or not? Isn't that what's going to drive the decision, ultimately?
Whenever it comes to deciding on energy improvements to building, it seems obligatory that we rationalize the payback. Cost seems to drive the discussion, but why? It does not drive the decisions where most of us spend most of our money. For example, a big chunk of my money these days is going towards two college tuitions. Both my daughters are going to "good" schools, but the "value" is very nebulous. The cost, even with wonderful scholarships from "well endowed" institutions, puts the cost in the range of a "deep retrofit." Yes, I hope that the wonderful education they are receiving will make conscientious, carbon-neutral world citizens out of both of them, but there is hardly a strict accounting of this payback. No one really demands that of the things they find valuable. The same loose accounting goes for most of what we buy. Mortgage (before that deep retrofit), vacations, the car we drive ... Ok, some of us opt for the Prius and Fit, etc. just as some of us opt for deep energy retrofits and/or PV, but the vast majority settle far below this. Point is, what drives the decision is value, not the payback, per se. (I mean, if payback were the issue, we'd all be driving 12-y.o. Jettas, which get about the same mileage as a Prius and on the used market go for a helluva lot less; it ain't just cost that defines that value, even if you are opting, on the face of it, for some sort of energy efficiency).
All of this, though, pertains only to the middle-class and above -- those who can even begin to weigh the choice between a deep retrofit or PVs. What Shawna says deserves another read from us all. As much as I groan about demonstration houses, though, Shawna, it's probably these that hold some sway over our perceptions of value, and little by little begin to shape public expectations of what a building should be. But for a great number of homeowners, she is right, there is no discussion about deep retrofits or PVs, and we'd be so lucky if air-sealing got sexy.
PV vs Efficiency
Martin,
I don't agree with the idea that one should switch from efficiency measures to renewables once the incremental costs are equal, since efficiency upgrades offer continually decreasing marginal returns (after mechanical systems are minimized) and PV is fairly linear. Where I come to disagreement with you is on your costing method, as I've mentioned before. Comparing the cost of energy conserved in the middle of winter in a heating climate with an annual average cost of PV produced power is inaccurate, IM(H)O. If you compare the cost of a kWh saved in winter with the cost of a kWh renewably produced in winter, you're making a rational argument. Otherwise, you are arguing against levels of efficiency that have proven widely accepted elsewhere in the world and are growing in acceptance here. Unfortunately, you're not alone. Here in California, we're spending 2 BILLION DOLLARS subsidizing rooftop PV, which serves to further dis-incentivize efficient construction. Our government-mandated carbon reduction strategy is likewise based on an annual net zero energy model where the energy is measured in time and seasonally adjusted units that heavily reward peak summer PV production. This in a state where the average household uses 31% of its total site energy for heating and 3% for cooling. Does this make sense to you?
No, PV subsidies do NOT make sense to me
Graham,
I agree with you completely on PV subsidies. I don't support them and have often written articles arguing against them. For example, in a blog I posted on May 19, 2009, I wrote:
"While these [PV] subsidy programs are a financial boon to PV manufacturers and installers, it’s worth considering a few points:
PV incentives disproportionately benefit middle-class and upper-class homeowners.
By artificially lowering the cost of expensive technology, PV incentives warp investment decisions and draw money away from more logical investments like efficient appliances and improved ductwork.
As long as the government neglects investments in low-hanging fruit — for example, by failing to enact improvements in residential energy codes — it makes little sense to invest in energy-efficiency measures that are demonstrably not cost-effective."
You can read the entire blog here: "Thinking About Net Zero Energy."
Graham, I'm glad to see we see eye to eye on this topic!
Deep Energy Retrofits
I disagree w/ Martin RE: cost of Deep Energy Retrofits (DERS). I'm a project manager @ SMUD and we have achieved 50% annual source energy reduction on 4 DER demonstration projects. The key is to combine the DER w/ work that needs to be done anyway, focusing on foreclosed homes. In the case of our 4 DERs, 3 were abandoned homes that needed extensive rehab anyway. The cost of the upgraded retrofit items were minor, btw. $20 to $37k (the other DER was a market rate "flip" which came in at about $47K). Please note we got these savings in 3 of the porjects w/out solar (the market rate DER project incorporated both PV and thermal). Happy to share the results. I've written 2 case studies and working on the next 2. How do I get the case studies posted?
Case studies
Mike,
Thanks very much for your very interesting post.
Send me the case studies please! I'd love to see them.
You can contact me at:
martin [at] greenbuildingadvisor [dot] com.
retrofit
I am a green contractor and consultant in Miami. In my research I have found a multi-ceramic spray on coating that will give R-19 to R- 60 that is No-VOC, anti-mold, and can be sprayed on any color. It is the same type of coating used on the space shuttles for reentry to keep the shuttle from burning up. This coating eliminates the need for expensive foam and residing projects. This product can be used on roofs, siding, stucco, underfloor and is flame retardent,has an STC rating of 50, has a high solar reflective index. It is this type of product that need to be used in our retrofitting to make them cost efficient Thank you
Martin
Another Martin! What's your last name?
Greetings, fellow Martin!
If you tell me your last name, I'll be able to report you to the Federal Trade Commission for your blatant violation of the Federal R-Value Rule. If all goes well, your scam will be shut down and you will be jailed or subject to a heavy fine.
Let's stay in touch, Martin. Like I said, all I need is your last name, Web site, and phone number. Please.
Adding cellulose to the interior
What is wrong with adding cellulose to the interior of the house by creating a second 10" in thick (2x10) interior wall for and exterior facing walls, filling it with blown in cellulose, and covering it with drywall again. The existing wall doesn't need to be touched, the vents, outlets and (possibly) plumbing might have to be extended and of course the interior of your house shrinks by that much.
We have a 1250 sq ft 1951 brick-faced house and tearing down the exterior walls is never going to happen since it would be almost the cost of the house itself.
If I'm willing to eat the fewer interior square footage, is this not a plausible idea?
Response to TR
TR,
If you are willing to give up that much interior space, your suggested retrofit could work. Problems obviously occur if you have a stairway or hallway along an exterior wall, however. If a bathroom has an exterior wall -- and most do -- the bathroom is unlikely to be big enough to accommodate such a retrofit job.
Such a retrofit would also require opening up the ceilings or floors to insulate the rim joists.
Rim Joists
Thank you for the vote. I have a yen to turn my house into a net zero house just through hard work and a desire to do my part. It's sort of a Victory Garden impulse
I *think* the rim joints for my floor are on parade in the unfinished uninsulated basement and of course the rim joists for my ceiling are in theory accessible in my attic, under that cloud of insulation... somewhere..... ;)
This is a comical question
I have been performing energy audits for over 7 years. At one point I performed Energy audits for a solar company that offered them as a thank you for using them. Most of the homes had little to no insulation and heating and cooling systems that had reached the end of their useful life expectancy. Every time I performed one of these inspections I laughed. What a waste!
For me it all comes down to math. Most solar arrays cost over $40,000-$50,000 and reduce home owner’s bills by $100-$150 a month. If you were to insulate the home and install a new heating and cooling system you may reduce their heating and cooling bills by over 60% and spend $25,000 - $35,000. If they are paying $5,000 a year to heat and cool their home they would be saving over $2,500 a year and they would have a much more comfortable and durable home. To me that’s a real number and real savings.
Why not think in "levels" of energy.
I know this will probably not get read, considering the date on the last post, but I need to put my two cents into this discussion.
There are levels of energy that are relatively easy to generate at low cost. Low grade heat to heat a house and preheat hot water to 100 F is quite inexpensive and quite efficient for solar thermal systems. Next comes domestic hot water at 140 F which is raising that preheated water by 40 F using vacuum tube solar water heaters. These two account for about 80% of my energy use.
The remaining energy is high level energy for cooking, lighting, and such forth. This could be supplied by grid tied PV with battery back-up only on the thermal pumps, lighting, and controls.
Thermal storage? Under the house. If you have a 2,000 sq ft house and a five foot frost wall, use the earth under the house to store the heat. (200,000 BTU/'F). That is at least enough to only lose 1 'F a day.
Have a great day!
Response to Roger
Roger,
I'm glad you live somewhere where the sunshine is abundant during cold winter weather. I don't live in such a place; nor do most Americans living in the cloudy north.
Winter or Summer KW more valuable? Subsidies
For most of the country, its the hottest Summer since 2006 when New England last experienced brown outs due to lack of supply on the electric grid. For the entire Mid West and East coast, peak demand is much more of a problem in the Summer. Peak Demand makes PV production during this time much more valuable. Its an argument of the grid and community being more important than a single house or individual.
Why subsidize an expensive technology? It helps the entire community. All of our primary sources of dirty energy are enjoying heavy subsidies that contain many more Hidden Costs than PV.
Being disproportionate to the lower class is a fair argument and its these people that need help the most. While most of us would completely agree that starting with minimum efficiency standards should be the main priority, is it fair to argue against PV incentives aimed at low income housing?
Even if all dirty energy subsidies ended it would still not be fair to compare up-front costs to Renewable Energy because RE has far fewer Hidden Costs that are impossible to account for.
Up-front cost effectiveness is extremely important. Just be careful about ignoring Hidden Costs.
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