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The blogged wandering of Robert W. Anderson

Use the marginal kWH cost for efficiency savings!

I haven’t done a survey on how green home products present savings to consumers, but my guess is they are generally doing it wrong.  Granted, this might be some mandate from some industry group or governmental body, I don’t know, but it is key that consumers see the difference.

Here is an example, but first some background.

I recently picked up a Kill-a-Watt and have been measuring different devices in the house while on standby.   I want to get a handle on how much vampire power is being wasted.

It turns out that around 60 watts is bleeding from our main home entertainment system when on standby.  That is about 60 watts * 8760 hours = 525 kWH per year.

Aside from a classic power strip with a switch, there are solutions now that supply controlled outlets that only make power available when some master component is on.  One solution is the Zuni Digital smart powerstrip.  Another is the is the Belkin Conserve, though the latter doesn’t have enough outlets (disclosure: those our Amazon links).

So what am I on about?  If you look at the Belkin information, they present a very similar scenario as mine and conclude that the Conserve power strip can save up to $67 / year!  Unfortunately, they are using the wrong price:

Dollar figure based on US Department of Energy average retail price for residential electricity of $0.1132 per killowatt-hour.

Residential electricity rates are often more complex than that, though, and here in the PG&E territory, such a low rate only applies to your baseline usage.  The rates go up based on your usage.  The top rate is actually $0.40352.

If you are a consumer making a decision on saving 525 kWH per year, you should be looking at your top rate — i.e., the top rate you are actually paying to your utilty based on your circumstances.  Because if you shave off kWH, you are saving the money on the top rate, not on the bottom rate.   I’m embarassed to admit it, but our rate is 40-cents.  If I save 526 kWH that saves me $212.    (Of course, if your energy savings drop you to a lower rate, the calculation changs).

The Zuni sells for $39 — that pays for itself in just over two months.  Now, granted, our entertainment system is actually used sometimes, but I estimate it is unused 94% of the year, so that still nets nearly $200.

So, what is the marginal rate you pay?

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1 Comment »

    John Powers wrote @ June 20th, 2011 at 9:33 am

Absolutely correct, Robert — It’s amazing how many energy efficiency / renewable resource companies get this wrong. The ONLY thing that matters to the customer is their MARGINAL energy price. This is Econ 1 stuff. Yet (due to laziness or ease of packaging or ignorance or indifference) companies continue to do analysis on meaningless AVERAGE prices. I actually had a solar installation contractor come visit without understanding the tiered rates PG&E imposes on residential customers. Here’s a guy selling a system for more than $30K, and he’s got the economics completely wrong.

I think most companies assume that if they shout “green” loud enough, they’ll find the part of the market that cares about saving the planet, and that’s good enough. With even a little more care in their analysis, they could find the even larger market that also cares about saving money.

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