Anyone who has shopped for new curtains recently probably noticed a trend: more and more designers are opting for light fabrics with brighter colours rather than the traditional neutral colours. It seems obvious why fashion trends change, but what about eco-friendly décor? Is going green just a passing phase or is sustainable living really taking over?
Wind and solar energy are no longer perceived as expensive add-ons to an eco-friendly lifestyle – they are integral to it. In fact, the Global Market Size of the renewable energy industry will hit 25.9 billion USD by the year 2025, according to Venture Intelligence. So it’s high time for us to review the costs involved in owning and running a generator connected to the wind or the sun.
The first and foremost thing to consider when budgeting for your wind or solar energy system is the investment. As previously mentioned, renewable energy is set to rise as a market size, with the market value projected to hit 25.9 billion USD by 2025. This makes investing in one of the most popular energy alternatives more attractive.
If you’re deciding to go green and invest in a wind or solar energy system, bear in mind that prices fluctuate from year to year. So it’s important to do your research before making any commitments. You might want to visit the Venture Intelligence website to access the latest market value of different wind and solar projects, as well as the CNET website to review the costs of different types of green energy systems. Keep in mind that the general rule of thumb is to bargain clauses when contracting, so that you can secure a better price.
Operation And Maintenance
Once you’ve made the investment, the next step is to consider the costs associated with operating and maintaining your wind or solar energy system. These costs vary from having someone come and check the equipment once a month to replacing light bulbs with more energy-saving models. Unfortunately, the price of these additional services and products is usually incorporated into the market price of electricity.
Since we’re under a time constraint, let’s assume that you’ve decided to go with solar power. The next step is to work out how much you’ll need to budget for solar power systems to make it cost-effective. There are various ways of measuring the cost of solar power, but the general rule is that the total cost of ownership (assuming you don’t own or lease solar equipment) should not exceed 8% of your monthly income. Is this fair? Think of all the money you’ve saved by switching to sustainable living – is 8% really the right proportion?
Maintenance And Replacement
Your wind or solar energy system is not indestructible, and eventually, it will require some maintenance or replacement. This is why it’s important to budget for this eventuality. The good news is that the cost of spare parts can be negotiated as part of your contract. The bad news is that your equipment will be out of commission for a while, so you can’t generate any electricity. This is also why it’s crucial to budget for the initial set-up costs. If you need additional parts or have to temporarily replace some of your equipment, it could end up costing you more in the long run. Are the additional costs worth it?
Budgeting for the costs associated with owning and running a wind or solar energy system is essential. The more you spend on these upfront costs, the less you’ll need to spend on servicing and maintaining your equipment in the long run. So, if you really want to cut back on your energy bills in the long run, consider investing in one of the green energies systems that require less upkeep.
If you own or operate a commercial establishment, you might also want to consider establishing a maintenance fund so that you can cover the costs of emergency repairs and upgrades. The fund can be accessed from your income or from an overseas sources such as the Saving Accounts scheme (UK), so that you don’t have to burden your personal finances.
The Cost Per Hour
Once you’ve installed a small-scale wind or solar energy system, the next step is to work out the cost per hour. This is typically worked out by multiplying the output of your system (in kWh) by the price of electricity (in USD/kWh). For example, a 5kW wind turbine with a capacity of 10 hours per day will yield 50 kWh per day (5 kW x 10 hours = 50 kWh). The electricity will be free because it will come from the sun (and if it doesn’t, you’ll be compensated). Therefore, the cost of generating 1 kWh worth of electricity will be trivial – only 2 cents per hour. Similarly, a 2kW solar power system with a 24-hour capacity will generate 24 kWh per day. This will cost you $0.40 per hour to generate and you’ll receive $0.20 per hour back from the energy company. The total cost per hour will be $0.60 – not a bad return on an investment of $100! However, this also assumes that the sun provides all the energy you need – in most cases, this will not be the case and you’ll have to purchase additional energy from the grid.
The Cost Over Time
Now, let’s assume that you’ve decided to go with wind power. You’ve done your research and you believe that this is the cheaper option. If you add up all the costs associated with building and maintaining a wind power system, you’ll eventually reach a point where the cost will be higher than the cost of purchasing energy from the grid. This is assuming that you haven’t negotiated a better rate with your energy provider (e.g. by bargaining clauses in your contract). In most cases, the price of electricity will diminish as you progress through the years. So if you install a 5-kilowatt wind turbine on your house five years from now, the price per hour will be $0.05 and the cost over time will be $0.15 per hour. This is because prices will fall – even if they don’t affect your electricity charges directly (they will affect the market value of your turbine and the fees charged by your energy provider). Finally, it’s worth mentioning that the cost of electricity will increase over time as more and more people invest in alternative energy technologies, so if you can afford it, why not invest sooner rather than later?
The main thing to keep in mind when budgeting for your wind or solar energy system is that these costs are fixed – they don’t change. This is why it is essential to budget for them rather than trying to negotiate them down once the contract is signed. Negotiating leads to confusion and additional costs – so, unless you’re in a position to afford sudden cost increases, why bother negotiating? The good news is that as more and more people realize the financial benefits of going green, the cost of sustainable living will come down – especially as more and more suppliers enter the market.