When I first began this journey called Solar Decathlon I never thought I would become a businesswoman. However, I was elected the Team Leader for the Economics Team and began to learn about all that Economics can entail. The Economics section for the competition is a new addition to the decathlon this year, thus few rules were given for the specifics of the necessary reports. There are many areas of economics that can relate to engineering in many different ways; the focus of my economic research has mostly been related to energy and cost analysis.
In the current business world, there is a booming market called Solar Energy. This new economic niche has brought millions of dollars to a small number of business owners and even fewer homeowners. However, the goal of the Economic report is to show how solar energy can be a reasonably priced and efficient for the “average” consumer. And how more homeowners can also enter this new and growing market. To my surprise, economics can be broken down into simple categories of costs; current costs, saved costs and future costs. It can be hard to understand the different types of operating costs that a homeowner faces because homes differ in size, age and efficiency. But one fact remains true with any home that exists; there is always a better solution to save money and energy.
Energy Economic relates to the total amount of energy that a home or building can produce to the actual energy consumption. The more energy that a home can create on it’s own the more efficient it will likely be. Solar panels and collectors add to the effeciency of any building and are a sound investment. There are some speculations that solar panels are too expensive for residential use; however many government and private programs offer homeowners discounts or rebates for buying and installing solar panels on a home. The average payback for an investment on solar panels is about five to seven years. With time, this period is expected to decrease as the cost of solar panels will also decrease. There are many benefits for installing solar panels on a home or building. Not only will the home be more sustainable and efficient, but power costs will drop, too. A consumer whom has solar panels installed and has the capability to store unused energy can actually sell that stored energy back to their power company. This sometimes comes in the form of energy credits or monetary rebates. In either case, solar power is a win-win situation.
The flip side of energy economics is money economics, which nobody likes to talk about. However, when it comes down to the bottom line, may people might not expect to save as much money as is actually possible. There are some surprises when it comes to the costs of solar projects. The total pricetag for the Santa Clara University competition house is roughly $500, 000 including transportation costs to and from Washington D.C. The importance of the Economics portion of the decathlon is to provide a reasonable cost analysis of what a consumer would pay to build our home. Based on research and references it would take a consumer or homebuilder $400, 000 to build a similar version of our home. The beauty of this adventure is the ability for a consumer to customize their home based on their location. A consumer whom lives in an area with a lot of sun may want to include a lot of solar panels, which can be expensive. Whereas, a consumer whom lives in an area with not a lot of sun during the year might spend money differently. The money that we have spent on our house has been added and reflected upon. Our investment is sound and worth the time and effort that our entire team has put forth.
Through it all, I have become a businesswoman and learned more than any business class can teach me. I learned about an interesting subject and picked up a new set of vocabulary. So the next time you hear someone talking about economics ask them how they think EEMs add to the value of a home, or how a BIPV can change the marketability of a home, or how their home or building rates on the LCoe calculator. If they are an economist, they will have a lot of knowledge to share with you. And you too, can say that you have become a novice economist.