Achieving 100% Carbon Neutrality at Just 10 Cents per kWhr
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Chapter 1: The Path to Carbon Neutrality
Transitioning to a fully carbon-neutral energy system for your home is now possible at a cost of about 10 cents per kWh. This can be achieved through a combination of solar panels, battery storage, and an efficient ducted heat pump for heating and cooling.
However, this setup requires more solar capacity than usual and a sufficient number of Powerwalls. Additionally, a high-efficiency reverse-cycle ducted heat pump is essential. The calculations take into account energy needs for appliances, lighting, heating, cooling, water heating, and charging two electric vehicles (EVs). Remarkably, you'll be able to generate energy at a lower cost than traditional utility providers, around 10 cents per kWh.
As a side note, utility prices are also expected to drop to approximately 10 cents per kWh over time, as the costs associated with solar and wind energy decrease. Yet, it's prudent not to rely solely on this expectation. In regions like Australia, where utility distribution costs are elevated and current prices hover around 15 cents (US), rooftop solar offers even greater advantages. If only the Tesla Powerwalls or their alternatives became more affordable in these regions...
Implementing these technologies will significantly alleviate the increasing pressure on the distribution grid, especially as we advance towards electrification and anticipate a threefold increase in energy generation in the next 15 to 20 years.
Chapter 2: Cost Assumptions for Viable Carbon Neutrality
To achieve an estimated price of about US$0.10 per kWh, which is roughly 25% lower than the current average retail price in the US, several assumptions must be made:
- The initial installation investment is calculated over a 25-year period. Even if you relocate, a 100% carbon-neutral property could enhance your resale value, particularly when marketed for its off-grid capabilities and premium energy supply for heating, cooling, and EV charging. I believe such properties would attract buyers quickly, and the off-grid trend will likely gain traction in the next five years.
- Rooftop solar prices are expected to halve in the coming five years. Given that solar pricing is already at this level in Australia, it seems reasonable to anticipate similar outcomes in the US.
- Battery costs are predicted to decrease by approximately 25%. This decline is contingent on companies like Tesla achieving significant production increases of Powerwalls, a medium-term goal supported by their forthcoming lithium refinery.
- It’s crucial to have enough rooftop space to meet your energy needs.
While occasional reliance on the grid may be necessary, careful management of energy consumption during low sunlight days can almost eliminate this need if desired.
The Data
Assuming energy prices drop by another 25% (for batteries) to 50% (for solar, aligning with Australia's current rates) by 2027, here are the projected statistics for a typical suburban family home:
- Daily Energy Usage: 80 kWh
- Solar Capacity: 20 kW
- Battery Storage: 5 units of 13.5 kWh Tesla Powerwall
- Cost per kWh: US$ 0.10
- Investment Horizon: 25 years
- Total Outlay: $80,000 (current estimates are around $100,000)
Admittedly, $80,000 is a substantial upfront cost and primarily targets early adopters. However, as prices drop to around $50,000, full off-grid solutions are likely to become mainstream. The government may also consider partially subsidizing these systems, as they mitigate the need for extensive distribution grid upgrades during electrification.
It's important to note that while 80 kWh per day may seem high, this figure includes energy for appliances, lighting, air heating, hot water, and charging two EVs. Presently, achieving 20 kW of solar is feasible on about one-third of suburban homes. However, with advancements in solar technology and integrated solar tiles, many more homes could become suitable candidates for a 20 kW system over the next decade.
Additionally, I have not factored in the costs of ducted heat pumps and electric water heaters, as these are standard home requirements. My focus here is on energy costs, which are set to become standard in the next 5 to 10 years. Expect to add another $10,000 to $20,000 for these necessities.
Cost Breakdown
The total anticipated cost of $80,000 can be broken down as follows:
- 20 kW Solar System: $20,000
- 5 Tesla Powerwalls: $50,000
- Inverter: $10,000
Keep in mind that I'm assuming solar installation costs in the US will align with current Australian prices within five years, which is a reasonable expectation.
Daily Energy Consumption
For a family home utilizing two EVs, the daily energy breakdown is as follows:
- Appliances & Lighting: 30 kWh
- Heating & Cooling: 30 kWh
- EV Charging: 20 kWh
It's vital to increase solar installations closer to 20 kW, as heating accounts for 50% of your energy usage without EVs. With the inclusion of EV charging, appliances and lighting comprise only about one-third of your total energy consumption. Charging two vehicles at 20 kWh per day would provide a combined range of approximately 100 km, based on a consumption rate of 0.2 kWh per km—an adequate range for daily needs.
The occasional need to draw from the grid is irrelevant, as it serves as a backup resource.
Energy Production Calculation
The daily energy output can be calculated using the formula:
Daily Energy Output = Rated Power × Average Effective Sunny Hours × System Efficiency
Thus, for a 20 kW system operating five hours a day with an efficiency of 0.84, the daily energy output is approximately 84 kWh.
Long-Term Energy Costs
Distributing the investment over 25 years is a practical approach, as it becomes part of your home’s value. Initially, this will cater to early adopters, but as prices continue to decline, a $50,000 investment in off-grid capabilities could become commonplace by 2033.
Annual Energy Requirement: 30,660 kWh/year = 84 kWh/day × 365
Total System Cost: $80,000
Average Energy Cost: US$ 0.104/kWh = $80,000 / 25 years / 30,660 kWh
This is worth considering in the next five years as green energy prices keep decreasing. By then, these systems will be a valuable asset for any home.
Furthermore, transitioning to electric vehicles will eliminate fuel costs, making it about three to four times cheaper to operate, along with significantly reduced maintenance expenses.
Chapter 3: Video Insights on Energy Assumptions
This first video titled "Assumptions" explores the foundational ideas behind transitioning to carbon-neutral energy solutions. It delves into the assumptions made regarding costs and installations.
The second video, "Sam Gellaitry - Assumptions (Official Visualiser)," provides a creative visualization of the concepts discussed, enhancing understanding of the energy transition.