Thanks Tom for the opportunity to focus some thoughts in need of some
mental herding.
Suppose I have 3 not-so-hypothetical projects available to me, and I
need to decide which to tackle first. (Invalid assumptions used for
simplicity of the exercise: I have the time; additional manpower is
available for free from other household members; no parts are made of
unobtainium.) All should reduce carbon emissions slightly, but I'm not
taking the relative GHG values into account.
1) Solar heating system repair.
The blower motor on my existing system caught fire last fall. Due to
good luck and some good design, no damage to anything other than the
electric motor. I now have a surplus furnace fan motor on-hand which
looks like a reasonable substitute.
Estimated cost of project: 4 hours of my time (let's call it $25/hour
due to no taxes on work I do for myself).
Estimated return: about $200 annually of heating fuel.
Risk: motor may not fit, solution may not work - assign 50% probability.
Payback period: 1 year [($100 deemed labour cost / ($200/year fuel
saving x 50% success probability)]
2) Solar water heater rebuild
The insulating box for my batch solar water heater rotted out a few
years ago. It saved me about 6 months of water heating fuel a year. We
are about to replace our refrigerator, and I think the old one (which
has multiple issues) could make a good candidate replacement box. I
have the donor fridge on hand, and a piece of thermo-pane tempered glass
that looks about the right size as the collector glazing (measurements
are required, but I'm feeling optimistic this morning).
Estimated cost of project:
a) take fridge to appliance service depot, have refrigerant removed by
authorized personnel (estimate $60), return to pickup the emptied unit
($20 vehicle fuel for 2 round trips, 3 hours travel time @ $25/hour) > $155
b) labour to remove unwanted parts, add insulation, modify door to
accept thermo-pane glass, fit new hardware, install tank (16 hours @
$25) > $400
c) additional hardware, insulation, reflective material, paint > $100
Total: $655
Estimated return: $120/year
Risk: glass may not fit - assume 95% chance of success
Payback period: 5.2 years [($655 x .95) / $120/year]
3) Temporary PV panel install
My son is storing a number of PV panels in my back yard which he won at
auction, plus I have 2 surplus golf-car batteries (about 1 kWh storage)
and a 1000-watt true-sine inverter (for use in power outages). If I
build a frame to carry the panels in my sun-facing back yard, I can
create some summer shading and take my freezers off-grid. (Additional
assumption - son won't need at least 6 of the panels for at least 4
years based on current life plan.)
Estimated cost: 8 hours design, construction and wiring ($200), plus
$100 in framing materials, cabling, connectors, etc. > $300
Estimated return: $91.25/ year (0.6 kWh/day x 365 days/yr x $0.15/kWh)
Payback period: 3.3 years [$300 / $91.25/year]
Sadly, the project that most excites me (#2) has the worst payback of
the 3. Payback period says project #1 should be my priority, with #3
getting second place on the 'todo' list. In fact, the payback on #2 is
so bad, I'm now considering putting the seasonal water pre-heater at a
seasonal residence, where it will be a better match (supply/demand), and
could put off another upgrade (antique small electric water heater) at
that location currently estimated at $500 initial outlay, and about $15
a month (4 months/ year).
[Project 4: rebuild solar water heater for seasonal property)
Estimate cost: $700 ($655 from #2 above, additional fuel and install costs)
Estimate return: $500 deferred other expenditure + $60/year
Payback: 3.2 years [($700 - $500) x .95 / $60/year]
Project 4 - invented in the course of this exercise, is now the 2nd
priority based on payback period (but eliminates Project 2 due to
resource constraint - only parts for one solar water heater on hand).
2 of the projects reduce heating fuel consumption, and 2 reduce
electricity consumption, but I can compare them based on dollars as a
common unit. Try to be fair and honest in building your assumptions to
get a useful result. Payback period likely won't be your only tool in
prioritizing projects, but I find it useful.
I hope this helps.
Darryl
On 25/06/2014 8:29 AM, Thomas Kelly wrote:
Hello Darryl,
You wrote: Personally, I love 'payback period' as a means
of ranking different alternative projects open to me,
.....
Out of curiosity, could you give an example?
Maybe I should rethink how I do things.
Tom
Hi Thomas,
sadly, such examples are still sufficiently rare that they
still
constitute news, and small enough they only warrant local
coverage if
any at all. When I find these nuggets, I like to share,
in hopes they
will inspire other 'small' victories.
Regarding the math, I think the reporter jumbled 2 things
together which
create confusion. My reading is that Mr. Sperling figures
a $50,000
investment will allow him to produce most of his
electricity and recoup
his investment in about 2 years from avoided utility
costs. The
reporter doesn't spell that out before shifting
conversation to the U.S.
Vegawatt example, which only proposes to provide 10-25% of
the power
used by their example customer restaurant (not Mr.
Sperling's operation).
Personally, I love 'payback period' as a means of ranking
different
alternative projects open to me, but it isn't the only
factor that bears
on my decisions (personal interest, satisfaction, learning
potential,
ease of implementation, risk factors, impacts on existing
situation and
others are at least as important). There has to be some
way to put a
value on beauty (not necessarily in dollars), or we would
not build art
galleries or put up pictures on our walls.
Darryl
On 17/06/2014 9:25 AM, Thomas Kelly wrote:
Darryl,
Thanks for articles such as these. It's nice to hear
about people who do things. They talk, they listen, but
ultimately they act. Whether it's putting something to
work that they would otherwise discard, or
about someone who scratches in the dirt to grow food
they will eat, without first poisoning it.
I have a problem with the term "payback period".
We don't ask about "payback period" when we go on
vacation, or buy a car with all the options. Does
the gardener really calculate the payback period for
the time and cost of planting and tending the garden?
Why would anyone plant flower beds?
My experience is that "payback period" is often used
an
excuse for inaction. Blessings to those who read,
listen and learn, calculate feasibility and then act
with
the understanding that sustainability is the goal and
joy
is part of the payoff.
Actually another problem:
Article states that:
-cost will be about $50,000
-savings will be about $10,000/year ($900/mo)
-payback will be within 2 years
Are there tax incentives or is this a simple
miscalculation as it would seem that payback would be
about 5 years at their savings.
(Nothing wrong with a 5 year payback as a diesel
generator will live long past that)
Thanks again,
Tom
http://www.leaderpost.com/life/Restaurateur+energized+veggie/9935141/story.html
Regina restaurateur energized by old veggie oil
By Natascia Lypny, The Leader-Post June 13, 2014
A Regina restaurateur thinks the leftover grease from
french fries, fish
and chips, and other greasy goodies could be the
solution
to
Saskatchewan's power grid strain.
Adam Sperling, owner of La Bodega and Slow Pub,
envisions
a Regina
powered by restaurants' waste vegetable oil.
"Right now all that is, is a drain on power," he said
of
the city's
expanding restaurant scene. "It's draining our grid. We
can turn that
into a power resource."
The Environment Advisory Committee member plans to
bring
forward a
motion that the city conduct a feasibility study
involving
a pilot
project of vegetable oil electricity generation at
three
locations of
varying size. Thursday's committee meeting was
cancelled,
but Sperling
plans to bring the motion up the next time the
committee
sits.
It's an idea the restaurateur has been picking away at
for
a decade.
According to his research, a generator would cost
$50,000
installed. In
a restaurant with one deep fryer, such as La Bodega,
the
generator would
pay for itself within two years, then practically nix
the
restaurant's
power bill, said Sperling.
His vision for the generator is ambitious. Vegawatt, a
similar machine
developed by a Massachusetts company, advertises itself
as
providing
10-25 per cent of a restaurant's power and cutting its
monthly power
bill by $890. No examples of such a product exist in
Canada.
Currently, waste vegetable oil is picked up from
restaurants, then
reused for cosmetics, biodiesel and on roads to control
dust.
Sperling hopes the pilot leads to the eventual
installation of
generators at all Regina restaurants and food vendors
with
two or more
deep fryers.
"This is an opportunity for Regina and for SaskPower to
be
leaders and
innovators in recycling and being sustainable, and
relieving the power
grid of so much stress," he said.
SaskPower's grid is currently strained under the
pressures
of increased
demand due to a growing population and the age of the
infrastructure.
Its sections average 30 to 50 years old, said spokesman
Tyler Hopson.
"At the current time, expanding our generation fleet is
something
SaskPower is interested in doing, something we have to
do
as the
province grows in terms of population and demand for
power
increases,"
he said, adding the situation's not critical.
Sperling's idea is far from fruition. He hasn't
developed
the machine,
nor discussed it with SaskPower. The corporation,
though,
is open to
innovation, said Hopson. While he couldn't comment on
this
particular
idea, Hopson said SaskPower accepts unsolicited
proposals.
It also has a
Small Power Producers Program by which people can
generate
electricity
either to offset their own bill or to sell to
SaskPower.
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Project Manager,
Common Assessment and Referral for Enhanced Support Services (CARESS)
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