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Welcome to 2023! The beginning of a new year feels like the right time to contemplate the past year and the one coming: to review personal growth, lessons learned, recent world events and how we should prepare for the future.
It has been eventful with the Russia-Ukraine war, global energy cost increases, climate craziness and the COVID-19 pandemic, which finally, we hope, is slowing down. The virus has killed about 1 million Americans and at least 5 million others around the world.
We could be facing a recession in 2023, the continuing uncertainty of Russian reactions to military and economic setbacks, more intense weather events — and in the construction industry, many changes as we move away from fossil fuels.
I find it helpful to clear the fake news and rhetoric out of my head by starting a new year with a review of the facts:
1. Heat pump sales are zooming up in the United States
2. Rooftop solar and home batteries are doing the same.
3. Electric car adoption is increasing quickly.
4. These trends are generally supported by citizens and governments at all levels in most countries.
5. Greenhouse gas emissions and intense weather events are still increasing.
• Heat pump sales. U.S. heat pump sales in 2021 increased by 15% over 2020 and 35% in Europe. Globally, the increase was about 13%, according to the International Energy Agency.
• Solar at home. U.S. residential solar installations jumped about 40% in 12 months to October 2022, with about 180,000 homes adding solar in the second quarter, notes a report from global energy research firm Wood Mackenzie and the Solar Energy Industries Association. The “U.S. Solar Market Report, Q3 2022” says that about 20% of these installs were accompanied by home batteries and software.
• Electric vehicles. A total of 4.3 million new electric vehicles were delivered globally during the first six months of 2022, an increase of 62% over 2021. In the United States and Canada, the increase was 49%, despite a weak overall light vehicle market.
In China, which was hobbled in 2022 by severe COVID-19 lockdowns and a real estate market collapse, electric vehicle sales still increased by 131%, reports ev-volumes.com.
• Unnatural disasters. From 1980 to 2021, there were 7.7 storms, floods and wildfire events in the United States each year on average, with damages exceeding US $1 billion, notes the National Centers for Environmental Information, a department of the National Oceanic and Atmospheric Administration. In the past five years, this increased to 17.8 events each year, with 15 in the first 10 months of 2022 (http://bit.ly/3ENqoI7).
• American Society of Heating, Refrigerating and Air-Conditioning Engineers conference. The technical program description for this year’s ASHRAE conference in Atlanta in early February says attendees will learn about the “latest developments in building design and construction, from virtual design and simulation to decarbonization and grid resilience.”
Most of the courses provide insights for construction professionals on heat pumps, building electrification and reduced emissions (http://bit.ly/3Vgbf7z).
Beer Therapy: Connecticut’s Little House Brewing
When I visited the charming small town of Chester, Conn., in early 2021, the two founders of Little House Brewing Co. explained that the brewing equipment, glycol cooler and mini-split HVAC system are all electric, but they consume quite a bit of electricity. Partly for that reason, Sam Wagner and Carlisle Schaeffer decided to take their reputation as early adopters to the next level.
A few years before, they realized they would soon need a new roof for the old house, which serves as the brewery, tavern and an apartment for Schaeffer. The house was built in 1836 and has been a post office, barbershop, bakery, etc. Wagner drives a Tesla and admits that he’s a “bit of a Tesla fanboy.”
Another local retailer had a Tesla Roofs (integrated solar) installer in the family, so the partners at Little House wondered if they could upgrade the roof and save some electricity at the same time.
They worked with the contractor to crunch the numbers and decided to place an order. By late 2021, supply chain problems were finally resolved and the Tesla Roof, plus two Tesla Powerwall home batteries, were installed. After the system was up and running, they held an open house that attracted local beer lovers, solar fans and green-building enthusiasts.
There is an online video of the event (bit.ly/3UQO9Uj). While showing off the system and answering questions about how it works, Wagner announces he could quickly switch from grid power to battery power using an app on his phone. He proceeds to do it right then and there.
It seems as if everyone holds their breath and expects the lights to flicker, but they don’t. The switchover is completely seamless, and Wagner holds up the phone for everyone to see that they are now operating on the batteries.
“The ideal scenario is when a storm knocks out power and all of Chester is dark, Little House is lit up and people are drinking beer, which will pay for the roof real fast,” he notes in the video.
Wagner used the same line in my interview with him, so I asked how much the roof cost and how much it would save. He admitted that it was an expensive system, especially the batteries, which cost nearly half of the $40,000 they spent.
“However, we now have a really good roof and we save a lot on power,” Wagner explains. The partners are already paying about 12% less on an annual electricity bill that was averaging $1,300 each month (brewing is costly) and is likely to go higher.
In addition, they will receive a federal clean energy tax rebate of 26% on the cost of the solar roof and the batteries. And they will soon be able to participate in utility demand response programs, which will add to their savings.
“The alternative was conventional solar panels plus a new roof, which would have cost about the same,” he explains. “The glass tiles of the Tesla Roof are better looking, and they’re on warranty for 25 years.”
When they ripped off the old roof, they realized that the rot was more extensive than believed. Some rafters and decking had to be replaced, vindicating their bet on an integrated roof.
The business case is sometimes better for residential applications. Hundreds of integrated solar Tesla Roofs are installed in Connecticut, Massachusetts, New York and Virginia.
In the video, a local couple speaks up about their nearby Passive House home, which also has a Tesla Roof, revealing that they are paying only $100 per month for power for their own 2,200 square feet, plus a 900-square-foot apartment that they rent out. The homeowners both work at home, so it reduced their overhead.
The Solar Boom and the IRA
The Inflation Reduction Act (IRA) goes into effect this year. It extends clean energy tax rebates of up to 30% for another 12 years, covering solar panels, solar roofs, home batteries, interconnection costs, air-source heat pumps, ground-source heat pumps, other building electrification gear, Passive House measures relating to building envelope efficiency, and more. It also provides direct cash rebates for medium- and lower-income applicants.
The White House estimates that by 2030, the IRA will drive the installation of 950 million solar panels, 120,000 wind turbines and 2,300 grid-scale battery plants, mostly made in America.
Tesla Roofs are more expensive than previously, but there are rumors that the company will soon introduce new forms that are more affordable and easier to install. They also may increasingly certify third-party installers. Up until now, installations have been a team effort between contractors and on-site Tesla experts.
Patrick Chopson of Covetool in Atlanta developed a web-based software product for the data-driven design of buildings. “With the Inflation Reduction Act, more single-family residential solar and battery installations make financial sense,” he says. “Commercial is a very good deal, too — about $1.83 per watt before incentives.”
Chopson directs me to a blog post in which he writes: “Businesses recover about 45% of solar panels costs within the first year through tax credits and rebate programs.” Regarding residential, he says, “The average family uses 11,000 kWh per year.”
He sent me a link to HomeGuide.com, where the cost of solar in different states and array sizes can be reviewed (bit.ly/3YjWXoD). It says the national average cost for a residential system is $16,168 before incentives.
It also says: “Most solar panels last for 50 years, have a 25-year warranty and start generating a return on investment after eight years. Solar panels generate electricity approximately 30% cheaper than utility electricity over their lifetime. Over 20 years, solar panel savings range from a low of $10,000 to more than $30,000, depending on your location and the cost of electricity.”
Rooftop Solar Financing: Rocklands BBQ
Like the Little House brewery, considerable energy is needed to prepare the mouth-watering ribs and chicken at the Rocklands Barbeque and Grilling Co. in Arlington, Va. Heavy-duty systems are needed for cooling, refrigeration and ventilation.
When I visited the restaurant in January 2022, the business was still suffering the effects of the pandemic slowdown. The owners were happy with the financing option they had selected for the cost of a new rooftop solar system, which would save on expenses without upfront costs eating into their cash flow. The system was funded through a Commercial Property Assessed Clean Energy (C-PACE) model.
“We don’t need to use operating funds, it reduces our utility bills and a 26% federal tax credit applies in the first year,” explains John Sneddon, one of Rockland’s owners. “We took advantage of historic low interest rates; we think the payback will be less than nine years. Then we’ll own the system and our utility savings will increase.”
Scott Dicke is the program director at Arlington C-PACE, which helped make the Rockland project happen financially. He says there are several ways to approach the funding of commercial solar and that C-PACE is ideal as a pathway to equipment ownership by the business owner.
Arlington C-PACE brings together lenders, commercial businesses, building owners, installers and others to make solar deals. Dicke notes that C-PACE programs are available all over the country. The PACENation website reports that about 325,000 residential and commercial solar projects employ PACE programs and nearly $12 billion has been invested (www.pacenation.org). Approximately one-third has gone to C-PACE commercial projects such as the Rockland solar install.
The project consists of 55.5 kilowatts of photovoltaic solar panels split between the rooftop of the restaurant and a retail building next door. It will offset 10% to 12% of the restaurant’s power needs, and about 50% in the retail building.
The Rocklands brand messaging touts its climate-friendly efforts to choose cleaner, more efficient energy systems; minimize waste; use environment-friendly packaging; purchase locally sourced and prepared nutritious foods; and avoid high fructose corn syrup, MSG, artificial food dyes and chemical additives. Its customers tend to be in the 24-to-55 age group.
“We attract families and they care about healthy food and the environment,” Sneddon notes. “We’re thinking of mounting an energy meter so patrons can see how much energy we’re saving. With what’s going on in the world, it strengthens our chances of being here and being relevant.”
Rocklands was the first C-PACE program in the state. Now numerous projects are appearing that use the model, and Virginia introduced a state-wide program.
The U.S. Energy Information Administration says that residential and commercial buildings accounted for about 39% of total U.S. energy consumption in 2021. However, end-use energy was only about 28%; therefore, about 11% was lost in the system, mostly through transmission.
This suggests that locally produced energy could potentially reduce building energy by perhaps one-quarter without even deploying the energy-sharing and optimization features offered by modern technology.
Some see the recent election results for the U.S. Senate as a sign that Americans support clean energy programs such as C-PACE and the Inflation Reduction Act. It seems as if every day, more construction professionals and industry organizations make statements about the need to quickly shift to low-emission buildings. Let’s all go gas-free in 2023!
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