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How Re-Fueling Your Car Can Build Equity in Your Home

Posted: 10/02/11 06:01 PM ET

If you are one of the typical Americans who drives about 40 miles a day, then you should consider an atypical scenario if you happen to be planning on building a new home.

If you are taking out a mortgage to build a new home and are willing to take advantage of the falling price of photovoltaic panels, then you have an opportunity to increase the value of your home and stop throwing money away on transportation fuel.

40 miles per day in a car that gets 30 miles per gallon will cost you about $140 a month (assuming a gas price of $3.50 a gallon).

This is $1680 a year that you will never see again.

Solar panels in your home mortgage and an electric car in your garage make financial sense.

It takes about 34 kilowatt hours (kWh) to charge an electric car like the Nissan Leaf for 100 miles of driving.

It takes about 13.6 kWh for a charge equal to 40 miles of daily driving.

Even in cold, gloomy northeastern cities like Boston, with an annual average of 7.5 hours of daylight and 3-4 hours of actual sunshine a day, a 4 kilowatt array of photovoltaics should be able to produce the 13.6 kWh needed for the daily commute.

Assuming a conservative price of $5 per watt to purchase and install the solar panels, you would be adding about $20,000 to the price of your home.

If you are buying an average priced home for about $272,000 with a typical 30-year mortgage

This would increase your monthly mortgage payment by about $80 a month.

By putting solar panels on your house and an electric car in your garage you would reduce your monthly expenditures on transportation fuel by about 60 bucks a month.

2011-10-01-Uyeda_Infographic.jpg

The biggest barriers to implementing sustainable technologies are often financial. True sustainable design considers the financial scenarios that make implementation achievable in addition to the physical and aesthetics considerations of integration. Paying $20k out of pocket for solar panels is a financially daunting prospect but if you can pack it into a mortgage it makes a lot of sense to substitute reoccurring monthly expenses into financed renewable technologies that add to the value of your home.

Electric cars are often presented as a compromised automobile that reduce transportation freedom with a limited mobility range and an unfamiliar refueling process. Personally, if I was going to choose a car that offered freedom, I would pass on 100-mile+ road trips in favor of freedom from carbon emissions, unpredictable gas prices, and reliance on oil companies.

Electric cars and solar panels present the opportunity to own your own fuel supply. This concept of independence should be as just as important to American culture as muscle cars and the open road.

Note: This scenario assumes a grid-tied net-metered house that would avoid the added cost of home energy storage technologies.

 

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11:39 PM on 11/24/2011
Perhaps I missed it somewhere, but before we move towards adding solar to a home or an EV - make your home more energy efficient! Get an energy assessment and make the upgrades. This will ultimately make your home more comfortable, safer, healthier, more durable, and efficient. You can reduce your costs on a pv system if your home uses less electricity to begin with. Efficiency First!
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Moose Luck 99
Rand Paul is a LIAR!
10:31 PM on 11/22/2011
INCREASE MPG 30% ON THE CAR YOU OWN NOW!

Decrease NOX and unburned hydrocarbo­ns.70%!

Fitch Fuel Catalyst

Sonic Spark Plugs (Piezo) or Halo or Pulstar

Tornado Vortex Generator

Even More Mpgs Torque & HP.
http://www.hydrogenboostnow.com/HHO-Dry-Cell.htm

http://www­.brasschec­ktv.com/vi­deos/energ­y/biofuels­-thinking-­outside-th­e-barrel.h­tml

Biofuels: Thinking Outside the Barrel

Why a positive energy future could be closer than you think
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01:33 AM on 10/24/2011
An overview on ROI (Return On Investment) http://buildipedia.com/go-green/green-energy-technologies/roi-behind-solar?print=1&tmpl=component
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01:20 AM on 10/24/2011
Chevy makes an electric vehicle now and will be making two in 2012. Ford will be making one in 2012. There are US companies that do all the installation work for you. Sun Power is one of them. There are many, many more at your fingertips.
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01:18 AM on 10/24/2011
For those who need to be walked through this "scary" transition to sustainable energy and cheaper electricity bills: http://video.forbes.com/fvn/future-tech/ford-to-sell-sunpower-solar-panels
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lbsaltzman
Permaculture and Sustainability
05:08 AM on 10/18/2011
Better yet add solar to an existing house. Building new houses uses a lot of energy that you didn't add to the calculations.
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01:38 AM on 10/24/2011
Better yet, go live in a city where there is adequate public transportation and access to power from a forward thinking energy company. (One that is using more sustainable energy.) Homes are a waste of resources.
09:44 PM on 10/10/2011
here in CA after fed tax credit and state rebate that 4Kw system would cost $12,600
So to buy the solar electric generating equipment at $12,600
It will in 25 years produce $90,222 of electric fuel for my EV
Gee that looks like a profit of $77,622
Wowie like a yearly rate of return on my investment of 12%
Every year 12% return. And is on my house safe on my property under my control, panels guaranteed for 25 years.
And will produce over 30 years looks like a 700% ROI in 25 years.

Buy a new Camry $19,720
Gas 15 year cost $73,668 assumes historic 7% yearly increase
15 year cost $93,388

Buy a new Leaf $20,280 in CA, - $25,000 rest of US, - $17,280 In San Joaquin Valley,
by my house!
Electric fuel cost $ 4,275 - 25 years. assumes historic 7% yearly increase

Time of use rate, 5 cents a Kwh. Charge at night only why pay high rate?
Cost of fuel from a solar electric generating station making your own little cheaper

15 year cost $24,555

Savings 25 years $68,833 PROFIT

but that is a Profit as you are enriched by $68,000 in 15 years
In what you keep in your pocket do not spend pretty good return on investment.
It is the cost of fuel not price of car that makes difference.
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Ben Uyeda
01:33 PM on 10/10/2011
Thanks for all the input, ideas, and suggestions. This is a very rough financial sketch and I encourage everyone to do his or her own research. The actually cost and benefit would depend on a multitude of factors such as local climate, different rebates for solar, driving style, particular lending practices of banks etc. One important point that a commentator pointed out is that the interest on a home mortgage is tax deductible which provides a greater tax shield. I am preparing to build a home for myself and I will test out this scenario and report back later with more concrete data. I know not everyone can afford a new electric car and not everyone is in the process of building or buying a new home but sometimes there are great but imperfect opportunities in specific situations. I am curious to see if the rebates will offset the increase in the down payment.

In my experience there aren’t a lot of one size fits all solutions that works for every lifestyle, budget, and ideology. The scenario I outlined will NOT work for everyone and will NOT change/save the world but it will work for some. I just it's fun and interesting to look for the specific opportunities that exist today instead of waiting for a miracle technology or massive government intervention.

Thanks again for your time and comments send me a message on twitter @BenUyeda if you have any questions or ideas.
09:01 AM on 10/06/2011
Bogus accounting. So you're currently spending $140/month on gas. You could simply buy an electric car (no solar panels) and eliminate your gas expenditure but you would now be spending about $46/month extra on electricity. So what makes more financial sense, spending $80/month or $46/month in order to eliminate your gas expenses?
02:34 PM on 10/06/2011
Actually, I think you are the one not considering everything. This idea just doesn’t lower your monthly expenses it turns a reoccurring cost into equity in your home. Solar panels last a very long time as there are no moving parts and many are warranted for longer than some roofing products. Another advantage is that interest on your mortgage payment is tax deductable. This strategy would create an additional tax shield and allow you to own your fuel supply. Obviously it requires specific circumstances for it to be convenient but I am pretty sure the author never claimed it was a universal solution. I am glad people are pointing out different ways to think about renewable energy.
08:21 AM on 10/07/2011
Yes I'm sure there are other factors to consider but the point the author is making has been made by many other people. And it is somewhat of a financial distortion. By the author's rational it would make less sense for a person that's already driving an EV to build a new house with solar panels because he couldn't use the gas savings argument to justify the cost. That's obviously ridiculous. The fact is that the EV replaces gasoline and the solar panels replace grid electricity. So when doing a cost analysis on solar panels you should only be looking at the savings from grid electricity. If you also assign the gas savings from the EV then you can't use those savings again to justify the purchase of the EV. BTW, I'm a big proponent of solar and other renewable energies I just think there's a flaw in the author's reasoning.
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01:55 PM on 10/04/2011
Mr. Uyeda: Thank you so much for your wonderful article.
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lambdin1
What's this?
01:34 PM on 10/03/2011
Still based on new homes being built. I'm looking for something cheap for an older home!
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01:54 PM on 10/04/2011
Easy to claim anything on the net. Just how serious are you, really? Here's something for you to check out: http://cleantechnica.com/2011/09/27/solar-leasing-provides-power-for-pennies/ And there's a link to another article on that same page.
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lambdin1
What's this?
08:21 PM on 10/04/2011
The key word in the article you presented was "financed". In other words a lot of up front money! My key word was cheap. Perhaps affordable would be a better word. Solar energy is expensive and not at all affordabel unless you finance the greatest portion. I want something I own, not lease, and is cheap to install in an older payed for home!!!
01:08 PM on 10/03/2011
Excellent article! And it doesn't even consider the federal tax incentives for putting up solar (30%) and buying an EV. The only thing that I'd add is that if you're building a new house anyway, for god sake don't build so far away from your work that you need to commute 40 miles each day!
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Bio-man
An advocate for the middle class
12:15 PM on 10/03/2011
Great article and I’m impressed with the forward thinking. Just having an EV would save a bundle on annual fuel costs. Here are my assumptions on the Chevy Volt scenario in which a commuter drives less than 35 miles a day. By the way, most people drive less than 30 miles per day. For the Chevy Volt, assuming the consumer purchases a 240 volt charger, it takes about 12 kwh to charge it for about 35 miles of driving. Assuming an average electric rate of say 12 cents/kwh would come out to $1.44 per day for 35 miles of driving. For Gasoline and assuming 30 mpg at a price of $3.499 a gallon we get $4.08 a day for 35 miles of driving. Multiply both those scenarios by 365 and we get $525.60 for the EV and $1,489.99 for the Gas vehicle, both assume 12,775 miles of driving. While the EV is obviously much cheaper, there is the issue of road use taxes while are included In the Gasoline prices but not the Electric rate. In addition to fuel cost savings, EV’s have much lower maintenance costs as there are few moving parts. If EV’s achieve a higher scale of production, the initial price would come down. The solar scenario as illustrated in this great article just makes the savings that much better. From a national security and environmental perspective, this would be a winning proposition for the public at large.
09:46 PM on 10/10/2011
the savings profit just gets better all the time
On my electric motorcycle in 4 years commuting I made a $4,500 profit
Taking cost of conversion, cost of solar electricity from what I did not pay for gas for
20 miles commute to work. 80 cents a week to go to work!
lastpost
see biography
09:36 AM on 10/03/2011
"The biggest barriers to implementing sustainable technologies are often financial."
Considering that batteries are expensive, have extended charge times, and are heavy items to transport around. Wouldn’t compressed air vehicles be move advantageous? They can be recharged from a reservoir or compressor run on night time off-peak electricity. Be replenished quickly at (air) gas stations for longer journeys. Be lighter, cheaper and a more practical proposition for commuting.
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02:12 PM on 10/04/2011
Can hook up solar panels to your electric company and get reimbursed for excess wattage produced. No batteries needed. But as far as those considering being off the grid entirely, there are newer advancements in energy storage. Not all of them involve batteries either. See also cleanTechnica.com for starters or importantmedia.org
As far as commuting goes, I recommend a bicycle in the summer and public transportation in the winter (in areas where it snows.) Clean(er) deisel is currently being used by many cities, on public transportation.
On electric cars; pv panels for them is currently under development and that includes the ones that are sprayed on. Soon, they won't be just used by one foriegn car manufacturer to power the ventilation system. Their efficiency ratings are getting better. Also, buses, with their flat roofs, make a good platform for solar panels. Guess what? There are now pv that work at night. In any event, electric cars are being made and more will go into production. They will get cheaper,(at least to make,) have already gotten lighter and more powerful.
This is not the time to think of ways to detract from progressive efforts. But, don't worry. The work is being done without either of us and will continue with or without our support.
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ILoveFiction
That's unbelievable!
04:11 AM on 10/05/2011
Lunar panels?
ThinkCreeps
Seriously, it's time.
07:55 AM on 10/03/2011
In Boston, you'd need twice a 4W system. In sunny spots, you're good with that. If grid-tied - as the small print says - you're fine with the panels, if not then the car needs to be at home during the day.

While you're at it, you'd be well advised to cover the energy consumption of any AC in the new house too. In a sunny place that would dominate your driving energy costs. With a ground-loop heat exchanger system you can avoid having to buy natural gas in the winter too.
10:42 AM on 10/03/2011
Domestic AC is a good way to use solar power, as the AC uses the most energy when the sunlight is most intense. It would make for an interesting comparison with power from the grid.

It seems the author here has identified the most wasteful consumer use of energy, the gasoline-powered car, and chosen that for his comparison, to make solar power appear at its best. However, domestic solar does not really work for commuting as presented here. If the car is charged at night the consumer needs to know the electricity price at night. If the solar panels are powering something else in the daytime the consumer needs to compare his solar investment and his savings on the utility bills.

Otherwise Mr Uyeda makes a well-written and compelling case, and he's right to make us consumers stop and think about our energy usage for a minute.
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oneeasyrider
E=mc2: From light you exist
02:57 AM on 10/07/2011
Don't get the impression you really understand the power exchange happening at the service panel when you add solar panels; consider the following:

The digital smart meter at the service panel acts as your residentia­­l power exchange. What does that mean? Excess power generated by solar panels -- flow past the meter (is recorded) -- continuing along the grid until it finds a neighbor who demands power.

When solar panels are dormant -- desired power flows from the grid -- into the residence (again recorded).

At the end of the year, either you consumed more power -- or delivered more power -- to the grid. Deliver more power and your use is 100% generated by your solar panels. Use more power and you owe the power company for the offset (what you consumed) – which means recalculat­­e and ad more panels if you like.
09:51 PM on 10/10/2011
a 4.6 Kw system would probably do it
grid tie net meter no problem
you produce say 12 Kwh during day use 2kwh you send 10 kwh to grid
you have 10 kwh to use at night to charge
what I like about grid tie is its like having a 100% efficient battery
send 10 Kwh get 10 Kwh back you are using the utility as your storage battery
ThinkCreeps
Seriously, it's time.
05:45 PM on 10/11/2011
The utility likes grid-tie too, as local production matches AC demand.
If there's a feed-in tariff system too, you'd also make a handy profit.