The making of a clean energy prosumer: Part one

This article series describes my journey from a standard consumer to a prosumer and from owning a gasoline-powered vehicle to owning an electric vehicle (EV). I was led to making these two decisions to lower my ever-rising electric and gasoline bills, to enhance the resilience of my house to power outages, and to promote clean air. The report includes economic analysis behind the decisions, explains what it took to implement them, and provides the results during the time that has elapsed since I became a prosumer and EV driver.

Introduction

My career as an energy economist ran from 1978 to 2021 and focused on enhancing the energy efficiency of consumption. During this time, I was fortunate to work utilities, regulators and stakeholders on all six continents.

I had entered the field as a graduate student at the California Energy Commission. The focus of my work there was on forecasting the demand for energy in California’s industrial sector. Then I moved to EPRI. There, I worked on a variety of topics, including demand forecasting, rate design, demand-side management, electrification, and retail choice. Later, I worked with several consulting firms on these topics and dug deep into the design of dynamic pricing experiments.

During all these years, I was also a consumer of energy. In the late eighties, we switched houses. The new house had an extra bedroom and bathroom and larger by 600 square feet. Our energy bills rose. A few years later, I switched to time-of-use (TOU) rates for electricity to lower my bills. I had to pay an extra four dollars a month for an interval meter but it was worth it.

In the late 2000’s, a digital smart meter was installed at my house. I remained on TOU rates. But my electric and gas bills kept on rising. In 2015, two of my monthly bills hit $500. That was a tipping point for me. I began to investigate alternatives for enhancing the energy efficiency of my house.

In 2016, I made a significant investment in energy efficiency and participated in the local utility’s whole house energy upgrade program.

The bills, as discussed later in this chapter, went down by about 20% but were still above $200 a month. So, in 2019, I have made another significant investment: I installed photovoltaic (PV) panels on my roof and paired them with a stationary battery. I also traded in my gasoline-powered car for an electric vehicle (EV).

The lure of energy efficiency

In 2015, my electric and gas bills hit the $500 mark twice, first in the summer and then again in the winter. That pushed me over the edge. We were empty nesters living in a four-bedroom two-story house. After exploring several options, we invested a good sum of money in the local utility’s home energy upgrade program. The process was pretty smooth. We contacted an independent expert at the utility-funded program who reviewed our choices with us and then directed us several contractors who did such work. We hired one of these who specialized in equipment made by Carrier.

This involved replacing the SEER 11 air conditioner with a SEER 18, the 80% efficient gas furnace with a 97% efficient gas furnace, adding attic insulation and sealing the ductwork so the leakage went down from 56% to 8%. We did consider installing a heat pump but it was not cost effective given the electric rates. The contractor told us that they were only being installed in homes with solar panels.

Then came the hard part. Estimating how much the bills had gone down, on a weather normalized basis. A friend helped me do the necessary econometric work using bills going back to 2003. The result: 19%. That yielded a very long payback approaching 20 years.

I wrote a long paper for a trade journal about our experience while my wife and I published an op-ed in the LA Times. And, of course, we shared our news with many friends and neighbors. A few said we should have gone with solar. And one said we should have done both. But that was going to be a huge investment. And I was keen on doing energy efficiency first, believing the cleanest kWh is the one that is not generate.

With all the energy efficiency investment, my average monthly electric bill went down from $250 a month to $205 a month. That was still a lot higher than I wanted it to be.

So, in July 2019 I decided to go solar. The system is designed to make me self-sufficient on a net basis with the 8-kW system (comprised of 25 panels rated at 320 watts each) with a payback of 7 years. The utility’s website was quite helpful in estimating system size and savings.

Investing in a battery storage system

I also went ahead and ordered a 9.8 kW battery to make my prosumer experience more fulfilling. That turned me into a prosumer. The combined payback period for solar plus storage is 9 years but the battery does provide enhanced reliability and it has come in really handy during the five power outages I have had in the past nine months. It powers five essential circuits inside the house, including the refrigerators and freezers, lights, and the internet router.

Part two will continue the story with Ahmad Faruqui’s experience buying and owning an electric vehicle in California.