Case Study

At Solare Energy, we typically find higher energy savings with a shorter payback and larger financial return by combining energy efficiency measures and a solar PV system. And we are not alone with these findings. The numbers below were presented by the California Center for Sustainable Energy and the City of San Diego’s Clean Generation program. They are for an actual home in the Tierrasanta neighborhood of San Diego.

Energy Efficiency Only
An energy assessment of the home resulted in the recommendation to implement various energy efficiency measures, including improvements to lighting, insulation, windows, air conditioning, and space heating systems. The recommendations resulted in a total investment of $16,505 (after federal and state incentives) that would produce energy bill savings of $2,570 the first year. Assuming the investment is financed through a 20 year loan with an APR of 6.39% and a marginal tax rate of 37% (combined federal and state), the annual loan payment would be $1,485 before taxes or $1,095 the first year after considering the interest tax deduction benefit. As a result, the homeowner would have a net cash savings on year 1 of $1,475 ($123/month).

Solar PV Only
An assessment of the home energy consumption resulted in the recommendation to install a 4.5 kW –AC solar PV system. The total cost of the PV system is $36,638. The net cost after state and federal incentives is $22,182 and the system would produce energy bill savings of $2,840. Assuming the investment is financed through a 20 year loan with an APR of 6.39% and a marginal tax rate of 37% (combined federal and state), the annual loan payment would be $1,995 before taxes or $1,470 the first year after considering the interest tax deduction benefit. As a result, the homeowner would have a net cash savings on year 1 of $1,370 ($114/month).

Solar and Energy Efficiency
A combined assessment of energy efficiency measures and potential for a solar PV system resulted in the recommendation to implement the same energy efficiency measures identified above and a smaller PV system of 2.4 kW-AC. The total investment cost after state and federal incentives is $28,335 and the energy bill savings would be $3,652 the first year. Assuming the investment is financed through a 20 year loan with an APR of 6.39% and a marginal tax rate of 37% (combined federal and state), the annual loan payment would be $2,550 before taxes or $1,880 the first year after considering the interest tax deduction benefit. As a result, the homeowner would have a net cash savings on year 1 of $1,770 ($148/month).