GS1140 Problem Solving Theory

High Energy Cost
By Gabriel Aragon

September 20, 2015

Typical Electricity Bill Data for Large Nonresidential
RG&E Customers
Interested in what comprises a typical large nonresidential electricity bill? The graphs below compare average monthly electricity bills over the last 10 years for large nonresidential customers who purchased their electricity supply from RG&E.
Monthly Large Commercial and Industrial Electricity Costs
Based on average use of 2,000 kilowatt, 720,000 kilowatt-hours per month

The data in the above chart is based on average usage for a typical customer.
Individual bills will vary depending on specific usage.

There is a huge problem that I want to talk about, that problem is high energy cost which drives increase in cost to the consumers. As you can see from the chart above there is a huge opportunity for alternative energy sources. I feel if we install solar power grids on every retail business they would pay for itself over time. This would also increase customer satisfaction because with the decrease in costs this could be transferred to customers. This solution to this problem not only benefits the consumer in just one way. This also uses fewer natural resources to produce the electricity for so many large businesses. So this is a great alternative to using electricity through the traditional way of getting energy and helps save the earth from so many pollutions. Not only is it good for just those reasons think about how many additional jobs that would be produced by adding these to every business. So would this solution really be cost effective to outweigh the cost of the panels let’s take a look at the cost involved. “Let`s start by evaluating the solar system costs for a single-family home in Los Angeles, California. To make things simple, this family chose to pay for their solar system in cash – you`ll learn more about other ways to finance a solar system further down on the page.
In order to supply 70% of the household`s electricity consumption, 5,600 kWh per year, we decided to install a 3 kW solar system on their roof.
5,600 kWh is the equivalent to: * 6,000 lbs. less in carbon emissions * Planting trees on half an acre * Not driving your car for 7,500 miles The calculations below are based on the following assumptions: * Electric bill of $100 per month * Cost per watt at $6.50[1] * Electricity rate at 14.78 cents per kWh[2] * Annual growth of electricity rate at 2.8%[3]
These numbers are all based on recent data from credible sources – see reference list at the bottom.” Costs Total Costs | $19,500 | System | $9,000 | Solar Panels | $6,500 | Balance of System | $2,500 | Installation | $7,500 | Labor | $3,000 | Permits, Inspection Fees | $4,500 | Operational Costs | $3,000 | Note that costs have been rounded to closest $500 in order to generalize the case study. Incentives | $9,252 | LADWP Solar Incentive Program | $4,860 | 30% Federal Tax Credit | $4,392 | Net Costs | $10,248 | Tax credits and other benefits that are received over time have not been evaluated. In other words, the homeowner would pay less in reality than what our calculation suggests. Savings Total Savings | $21,989 | Net Present Value | $2,919 | Rate of Return (ROR) | 11% | Payback Time | 9.5 years | Return on Investment (ROI) | 215% | Increased Property Value | $16,720 | Total Savings represent the sum of electricity savings for the next 25 years – typically how long a solar panel warranty lasts. The solar system will more than likely keep generating electricity after 25 years, which will result in more savings and a higher ROI in the years to come.

“Above is an overview over how much the family from California saves every month for the first year. In the graph below, you can clearly see net savings from 1st to 30th year. The payback time is when the net savings reaches zero, about 10 years after initial investment.”

As you can see from the charts above and the information that I got from a website the overall savings in the long run outweigh the cost to set up the system these figures are based on a home but you can still see the bigger picture.

In conclusion I feel the solution to this problem is definitely feasible and would help in so many ways on saving money not only for the consumer but also the business. Based on the results that I found I have no idea why we aren’t putting more effort to switch to alternative energy resources to make everyone’s life easier and more efficient.

References: Word Apa format

Electricity Bill Amount. (n.d.). Retrieved October 1, 2015, from http://www.rge.com/YourAccount/readingyourbill/largenonreselectricitycost.html

How Much Do Solar Panels Cost - Energy Informative. (n.d.). Retrieved October 1, 2015, from http://energyinformative.org/solar-panels-cost/