We’ve talked about Bullfrog Power here before, but we have only just today signed up with them. (Ooops.)

We just had that down as one of those small tasks we’d take care of once the house was built which was going to get underway any day now for the whole year. But since we’re now officially on house-building-hiatus, our plans have been getting shifted around.

Another task we put off last year was replacing our awful, scary fridge because we thought “We don’t want to have to move a brand new fridge into storage, when we could just dispose of this one when construction starts, and buy a new one when we’re ready to move in.”

This fridge was so old it proudly boasted an Energuide rating of 1742kWh/year. But that was when it was new. We had put a UPM EM-100 usage meter on it (~$25 @ Canadian Tire) and found it was actually running at a rate of almost 2400kWh/year. You would think the fact that our old fridge used almost $250/year in electricity would be incentive enough to get rid of it right away, but for some reason waiting just a couple more months seemed like a good idea at the time (and the next time, and the next time).

Our new fridge (18.2 cu.ft.) is a fantabulous Whirlpool ET8FTEXRQ (note to marketing: not the catchiest name) and uses just $39/year or 412kWh of electricity. So, our electricity bill just came down by about 40%! We selected this particular fridge because it is the close cousin of the 21 cu.ft. ET1FTEXRQ which is currently the top rated fridge at Consumer Reports.

A call to Whirlpool’s “Customer Experience Centre” (yes, it’s an awful name but the staff there were top notch) revealed that, mechanically, the ET1 and ET8 are the same fridge, just different sizes. In case you go looking for it yourself, you should know that the ET8FTEXRQ has been replaced by the ET8FTEXSQ. I did not call them to ask what the difference was.

We made the semi-mistake of buying it from Lastman’s Bad Boy because they had a great price on the fridge we wanted, but I’ll blog about that experience another day.

In a previous post about using Bullfrog instead of buying Solar Panels, I used 5% as the amount by which energy costs would increase each year. I also noted that it was probably unfair to apply this rate to Bullfrog since the costs of wind power and especially solar power would likely decline over time.

Oddly enough, energy prices seem to have dropped for both Toronto Hydro AND Bullfrog Power. I didn’t make careful note of the energy cost breakdown last time, so here it is for future comparison:

Other than the rate for power from Bullfrog, the energy pricing information comes from Toronto Hydro’s web site. In addition to the above amounts there is a flat ‘customer charge’ of $12.68 ($13.44 with GST) per 30 days.

So the standing question is whether you can afford a small markup to your electricity bill to know that your power usage is coming from low-impact hydro, wind and solar sources, instead of nuclear, high-impact hydro, and coal? It seems like a ridiculously small price to pay, to me.

The helpful folks at SESCI have pointed me to a web site that details the rebates available for those putting solar power onto the grid.

For each kilowatt-hour generated, the producer will be paid 42 cents. That rate is “set for the entire 20-year length of the contract.”

Since we only pay 10.3 cents to take the energy off the grid, that sounds like solar panels would be a LOT more affordable; even profitable! However, there are a few catches.

For example, “new contracts will be subject to review every 2 years,” which sounds a whole lot like the guaranteed term for the $0.42/kwh offer is 2 years, not 20. Additionally, to put power onto the grid, we would have to pay an $800 initial fee AND $800 per year. (There are efforts under way to reduce or eliminate this fee, but that’s how it is today.)

If we assume that energy costs will increase at a rate of 5% per year, and we will always use 4200kwh/year (for simplicity) our energy costs over 25 years will be $28,189.53 from Toronto Hydro, or $35,806.78 from Bullfrog Power. (This latter number isn’t quite fair since presumably wind power will not become more expensive to produce over time.)

Solar Panels come with the previously mentioned up front cost of $25,000 and we are assuming the cost of borrowing that money is 5%. We also have an up front cost of $800 to be a power generator and must pay $800 per year to put power on the grid. (These costs should probably also increase at a rate of 5% per year, but we’ll leave flat for this example).

[Update 2007.11.03: It seems our (relatively low-light) region would require us to purchase a $50,000 solar panel array to cover our current electricity requirements. I have not updated the numbers below to reflect this amount.]

Even if we assume we are consistently paid 42 cents/kwh over 25 years for power we put onto the grid (though I think it’s more likely it would actually drop) and we assume we would be buying power back at the market rates from Toronto Hydro, our electricity expenses on a solar home would be $49,336.80.

So the ‘incentives’ that were missing from the previous calculation actually revealed the additional costs involved in putting power onto the grid. Solar panels would appear to be 38% more expensive than just buying clean power from Bullfrog.

I believe these numbers now factor in all financial incentives, and the projected increase in energy costs of 5% per year.

Alex had mentioned that as a general guideline, energy prices are assumed to rise on average 5% per year, even though they’ve risen 7% per year in recent years. I actually find it hard to believe this would be the case over a 25 year period. This would mean energy costs would be over 3x more expensive than they are today (without factoring in inflation) by 2031.

As energy prices rise, the viability of various technologies to make energy generation more efficient rises. But if we do assume this number is correct that just removes the interest portion from our calculation and results in a monthly cost for solar panels of $83.39, which is still more expensive than simply buying the power from Bullfrog.

This advantage might disappear if there were financial incentives offered for providing solar power to the grid, but so far I’ve been unsuccessful at finding any. I had heard that the price paid for adding power to the grid was significant, but have also heard from someone else that those incentives are no longer available.

In addition, when those subsidies were offered, there was no commitment as to their term. An incentive that can be withdrawn at any moment is not much of an incentive at all. I’ll have to investigate further.

As mentioned previously, we aren’t going to be able to afford solar panels for our house, initially. We are planning space and wiring for them, and are confident solar technology will become quite affordable within a decade. Unfortunately, even our smallish appetite for 350kWh/mo. can only currently be sated by a $25,000 photovotaic array (factoring in the amount of sun we’d receive in Toronto).

But considering 350kWh/mo. only costs $49.22¹ from Toronto Hydro, I decided to run the numbers on the approximate cost of ownership for solar panels and was very surprised at the result. The disruptive force in the calculations was Bullfrog Power.

Even though I’ve skewed the numbers in support of buying solar panels, that option is still 60% more expensive, for no real benefit to the environment (considering one can buy clean power from Bullfrog).

When I first thought about writing this entry, it was supposed to be about the revolution of distributed power generation that will come with low-cost, high-efficiency solar panels. But now that I’ve run the numbers I don’t see that happening.

A relatively small power generation company like Bullfrog can already sell green power at very reasonable prices. Given the overhead involved in managing one’s own power generation, Bullfrog are in a much better position to take advantage of changes in technology than individual consumers are. When prices drop for individuals, they’ll drop even more for Bullfrog, and other power generation companies.

In fact, companies are just the sorts of long-lived entities that thrive on long term capital investments such as solar panels… when there is actually any profit in it. The fact that no power-generation company is generating with solar (at least not around here) leads me to believe that buying solar panels for home power generation is terrible investment (financially and environmentally). For those living anywhere near an urbanized area, it seems likely there will always be a company able to generate green power with the latest technology far more efficiently than any individual could.

Using solar water heaters in the home still seems like a good idea. (Water can’t be heated ‘cleanly’ by someone else and then piped into your house.) But this also raises a question: If heating our home or water via non-solar means, is it better to do it with less efficient but green electricity, or more efficient but dirtier natural gas? I will have to do a few more of these types of studies on the cost of solar water heaters for tap-water and radiant floor heating vs. electrical heaters.

At the moment, I’m thinking the answer might just be Bullfrog.

FOLLOW-UPS TO THIS POST ARE NOW AVAILABLE (Follow-up 1, Follow-up 2).

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