Rush to Alternative Energy – Does it Make Sense Or Cents For You?


You may have read a few articles I have written for Ezine. I am passionate about good building which in most cases is “green building”. Our company has committed to building homes that are as efficient as possible as well as sustainable. For every home or building we build, I look at alternative energy options and weight the pros and cons. To date we have not been able to fiscally justify an alternative energy option but instead have chosen energy efficiency in the design, mechanical systems and structure. While I am glad Americans have decided to explore alternative energy sources, I am not sure that except in very specific instances are they the most efficient use of financial resources.

As a graduate of the US Air Force Academy, I receive a quarterly magazine from the Association of Graduates. In the most recent addition of Checkpoints, they announced the construction of a 2-megawatt solar power station at the cost of $18.3 million. The anticipated savings reported is $600,000 per year. That means the payback is over 30 years. Given the difficulties our nation faces with budget overruns, is it the smartest deployment of fiscal resources to in effect pay the power bill upfront for the next 30 years?  

Homeowners are faced with similar questions. Do they retrofit their existing house to include solar, geothermal or other alternative energy options? What is the savings? Again, when we are faced with economic uncertainty, is it the best decision to invest 20-30 years of power bills upfront. Unfortunately many who could afford to pay for alternative energy powered systems live in homes whose size and current heating and cooling systems preclude a significant replacement of electrical power usage through technologies like solar power.   

Further complicating the situation is government intervention in the free market. Incentives like a 30 percent tax credit or state tax credits of 30 percent or more incent homeowners to make choices they might not otherwise make. These choices are in turn subsidized by other citizens whose taxes pay for those modifications. When not deployed in a systematic fashion with an engineered plan, often our limited resources are diverted from alternate solutions that might make a bigger difference.  

My analysis is that at least in the near term the decision to invest is more wisely made in making the current house more efficient. For much less money than alternative energy, homeowners can add insulation, seal doors and windows, add radiant energy reflective materials between rafters or replace incandescent light bulbs with compact fluorescent lights (CFL).  

For older homes another good investment is replacing heating and air conditioning systems with more efficient, newer models. Also replacing single pane windows with more efficient double pane windows can reduce heat loss. There are various manufacturers that produce windows that meet Energy Star requirements. Appliances make up approximately 20% of a typical household energy usage ( Energy Star rated appliances can significantly reduce that amount.  

This is not to say that there is not a place in the future for alternative energy powered homes. But in order to most efficiently use those systems, the home needs to be designed from the beginning with that in mind. The limiting factor in all the current, alternate power generation systems is overall capacity. The cost of installing solar power is currently prohibitive. To be able to better afford it the house must be designed to minimize total power required. Probably the single biggest factor is home size.   

A typical US home uses almost 50% of its total power consumption to heat and cool. By reducing the size of the home this will reduce the overall consumption. This can be further reduced by using highly efficient insulation. Insulated concrete forms (ICF) can produce an R-value (measure of thermal resistance) as high as R-55. Depending on the area in the country this could be more than double the requirement. Cellulose or icynene insulation can also be used and are generally less expensive than ICF.   

To further reduce the electricity requirements for heating and cooling, a home can utilize very high efficiency furnaces and compressors for relatively little additional cost above minimum code systems. In some areas of the country geothermal heating and cooling can be used. Geothermal can be more expensive but the resulting reduction in the size of our alternative energy source might offset it. It is important to talk to a professional in your area of the country to decide the best strategy.  

Water heating is the next largest component of energy consumption. It typically makes up 20 percent of the energy bill. Tankless water heaters can reduce electrical usage 25-35 percent over a standard electric water heater. If gas is used in your area it will result in savings on natural gas or propane. Even if using a tankless water heater is not feasible, it is  important to select Energy Star dishwashers and clothes washers. They use significant amounts of heated water.  

The remaining 30 percent of electricity used in a typical household comes from lighting (5 percent) and appliances including refrigeration as much as 25 percent. Obviously efficient appliance selection can significantly reduce the overall electrical requirement. Depending on the type of appliance and manufacture up to 50 percent energy and water savings can be obtained over a standard appliance.  

By using a holistic approach to the design of a new home, it becomes more feasible to use self-generated solar, wind or other alternative power. Even if it is still cost prohibitive today, using this approach will make your new home capable of an easier transition than current, standing homes. For homes not designed with alternative energy power in mind, it is possible to increase the overall efficiency and reduce energy costs. The idea with alternative power is to reduce the overall cost of energy for the homeowner. It is not about just feeling good about green energy. In the end it has to make fiscal sense otherwise it will fail to gain widespread appeal.  

Author is a builder and developer of Montaluce Winery & Estates in Dahlonega, GA. The Beecham family has been building in Atlanta for 4 generations. Their quality is know throughout the Atlanta area. Montaluce is the Beecham’s first large development project. Montaluce is based around its vineyards, winery and restaurant, all passions of the Beechams. The homes built on the property are built using some of the latest techniques of green building. The development was planned in such a way to preserve more than 60% as either greenspace or agricultural. For more information please check our website or follow me on Twitter @MVineyards

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