Be your own power company (© Stuart Pearce)Click to enlarge picture

© Stuart Pearce/agefotostock

Energy independence isn't just for nations anymore. It's for households like yours and mine.

As fuel prices rise and the necessary equipment inches toward affordability, small solar and wind generators are entering the mainstream. By 2005, at least 21,146 utility customers (most of them in California) around the country were selling electricity they had produced back to their utilities, according to government figures. The bulk of this was wind and solar-generated, but a handful of people have set up small hydroelectric generators. (This last option is severely limited, particularly due to environmental regulations for construction in a streambed.)

But generating your own power still isn't cheap. Installing solar power — easier and cheaper than wind turbines for most homes — isn't likely to pay back your investment in one or even two decades. In the meantime, you can reduce your electric bills and think of the money you spend on the initial set-up as a low-return, long-term loan to the environment.

The charge of being your own power producer
The average 2,000-square-foot house without electric heat or an electric water heater uses at least 8,000 kilowatt-hours a year. To supply that, you'd need a system with about 6.5 kilowatts of capacity — the amount of energy that can be produced at any one time — which costs about $52,000. Figure on paying about $8 a watt. 

Sending electric power back to your utility's transmission lines is called net metering. Geologist Tom Gignoux, a net-metering pioneer, installed a tiny 900-watt solar-panel system on his 1,200-square-foot Missoula, Mont., home eight years ago. Being an early adopter had its benefits: He got in on his utility's pilot project, which paid half the cost of his $9,000 system.

Even with the subsidy, though, it'll be a long time before Gignoux's investment is eclipsed by his electricity sales. His panels produced 1,261 kilowatt-hours of electricity last year, which saved him — after the utility's standard $4.60 monthly charge for reading the meter is factored in — about $117 on his electric bills.

What's your home worth?

Because utilities often cap how much power they'll purchase, Gignoux will never get rich operating a home-based utility. The best a homeowner can usually hope for is to end up spending zero on monthly electric bills. NorthWestern Energy, Gignoux's utility, has about 320 customers who sell power to the grid, and only one produces enough to see a zero balance on his bills, says the utility's net-metering project coordinator, John Campbell. 

Gignoux figures he's earning about 1.5% on his money, an investment he likens to "a bad bank account." But the higher electric rates go, the faster his investment will be recouped.

"The personal pleasure I take certainly makes it worth it," he says, "and this is $117 I didn't have to earn and pay taxes on. As an investment, it's going to be paying (back) for 30 or 40 years."

Solar: What it takes
If you are thinking of producing your own power from the sun, here's a rundown of the basic equipment required, according to Campbell:

  • Photovoltaic panels. The panels, which soak up solar radiation and convert it into electricity, are made of silicon and coated in tempered glass. They aren't difficult to install, but for safety's sake, it's best to use a licensed electrician. Panels can be mounted on a roof or on a free-standing pole and can be installed in a fixed position or made to follow the sun. A less obtrusive option, Sunslates, are roofing tiles with photovoltaic panels built in, but these about double the cost of a typical solar project, says Rip Hamilton of Solar Plexus, a Missoula equipment supplier.
  • An inverter. This regulates the power and changes it to the alternating current that household appliances require. Inverters for a 6.5-kilowatt system run $3,000 to $4,000.
  • A meter that can run backward to show not just how much power you take from the utility but also how much you're sending back.

Adding batteries, which can be done initially or later on, makes you self-sufficient in case of a disaster. But they cost a lot — about $23,000 for that 6.5-kilowatt system — and last only eight to 10 years.

If your home is linked to a utility's distribution lines, any excess power you produce flows back to those lines, sort of like water spilling out of a full bathtub. The question is, will your utility credit you for the power you're sending it? The answer depends in part on your state's energy policies and rules, and whether your local utility works with net-metering customers. Consult "Freeing the Grid" (this is a .pdf file), a report by the nonprofit Network for New Energy Choices, which explains and ranks each state's policies and programs. New Jersey gets a perfect score; the other top-ranked states are Montana, California, Oregon, Nevada, Minnesota, New Hampshire and Wisconsin.

Wind works, too
Wind turbines are another way to generate your own electricity. They, too, are growing in popularity,
says Ron Stimmel of the American Wind Energy Association.

"Generally speaking, it costs $3,000 to $5,000 per kilowatt of capacity" to install a wind turbine, Stimmel says. Because the power of winds vary so much from place to place, it could cost anywhere from $35,000 to $70,000 for a system with the capacity to supply the 8,000 kilowatt-hours or more per year needed by an average household.

Costs aside, wind may not be practical — at least on a big enough scale to allow net metering — for city and suburban homes. Since wind is best captured at higher elevations, most towers must run 80 to 120 feet tall. Towers usually need plenty of surrounding space for zoning requirements, and although new turbines are quiet, the technology is new, so your plans could run into neighbors' objections.

Stimmel estimates there are 2,000 turbines big enough to power a net-metered household in use at homes around the country — possibly many more. He figures about half are hooked up to send electricity back to the grid, though no one keeps track of how many are actually selling electricity to local utilities.

Many people generate household electricity using wind or solar power but don't get credit for sending excess electricity to their utility companies, probably because they either don't have a net meter or because their utilities don't offer credits for home-generated power.

What it takes to harness the wind
Mick Sagrillo, a wind-technology expert for Wisconsin's renewable-energy program, says you'll need at
least the following to harness the wind:

  • Turbines adequate for net metering will cost from $5,000 to $36,000. Read Sagrillo and Ian Woofenden's "Wind Turbine Buyer's Guide" (this is a .pdf file), an article from Home Power magazine to calculate the turbine size and choose the right equipment.
  • A tower. Towers cost $3,000 to $15,000, depending on the size of your turbine and the height needed to capture good wind. Additionally, installation can run as high as $12,000 for a large system.
  • An inverter to regulate the power and change it to the alternating current that household appliances require.
  • A meter that can run backward.

Wind systems are relatively complex, so get a professional installer. Find one by asking the manufacturers of the turbines you like for recommendations in your area.

Your best tool may be a well-crafted public-relations campaign. Your ability to get a zoning permit could hinge on it. Prepare by reading "Small Wind Electric Systems: A Consumer's Guide" on the Interstate Renewable Energy Council's Web site and let your neighbors and your zoning officials know precisely what you intend to do early on.

Cut back your use of juice
On a recent day, Gignoux's panels were generating 300 watts — or 0.3 kilowatts — enough to power
three 100-watt incandescent light bulbs (or 12 equivalent compact fluorescent bulbs) or about half of the energy needed to keep a refrigerator going. When the sunlight dims, his system pulls electricity from the power lines. Gignoux's system is small, but it satisfies many of his needs because he has scaled back his electricity consumption.

"Before you buy equipment to take advantage of natural energy — solar panels, wind turbine, whatever — you should actually reduce your usage," says green-home architect Carol Venolia, a co-author (with Kelly Lerner) of "Natural Remodeling for the Not-So-Green House." The less you consume, the smaller (and less costly) the system you'll need. Start by insulating, caulking and replacing energy-hog appliances.

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Gignoux sold his clothes dryer and uses a clothesline. Heat from strategically placed windows warms the house, complementing the gas furnace. Gignoux replaced incandescent light bulbs with compact fluorescent bulbs, which cost more but last longer and use just one-third as much electricity. He chucked his TV and stereo. Now he uses his computer to watch movies (the LED screen uses less electricity). He finds that his iPod, amplified by speakers, works as well and uses much less juice than the old stereo. His refrigerator, stove and washing machine run on electricity. His water heater runs on gas.

Someday, Gignoux hopes, the costs will drop so low that every household will be its own small electric utility. But as far as he's concerned, his solar-power system is already golden.  

How to get going
If you are thinking of generating your own power, this is a good time to do it. Particularly with solar,
"there is now a growing industry of people ready to serve homeowners," says Johnny Weiss, the executive director of Solar Energy International, an education and training organization.  

  • Start with your utility company. If your utility does buy back power, ask what experience it has with net metering, how many customers are selling power back to the grid and whether the utility coaches homeowners through the process. To start figuring the potential cost, ask about the utility's method for calculating credits or payments to you. Most utilities credit your bills rather than pay cash. Remember to inquire about monthly fees, too.
  • Check into permits. Get a building permit from local authorities and a utility permit from your power supplier. See Renew Wisconsin's Small Wind Toolbox for fact sheets and "Information for Homeowners and Installers," particularly the articles on "Planning Your Wind System."
  • Call or visit a supplier. A supplier of solar or wind equipment can help you figure out the costs and practicality of setting up a system. The practicality of home wind and solar systems depends in part on where you live: Do you have room for a wind turbine? What's the local cloud cover usually like? For those willing to do some research on their own, a map-based performance calculator by researchers at the National Renewable Energy Laboratory can help you figure out the production potential of a solar system in your area. You can find wind maps on the Wind Powering America page of the Department of Energy's Web site.
  • Ask an electrician. Electricians can take a look at your home and tell you if your plan is realistic, and give you a cost estimate for installation. The North American Board of Certified Energy Practitioners lists certified contractors by city and state: Click the map on the right side of the page.
  • Find out which incentives and rebates apply to you. Government at all levels is trying to encourage renewable energy. A federal residential tax credit created by the Energy Policy Bill of 2005 lets households deduct 30% of the cost of a solar installation, up to $2,000 per home. Check the Database of State Incentives for Renewables & Efficiency to find rebates and incentives available in your city and state. Don't forget to claim rebates for any Energy Star appliances you purchase along the way. You can also check the Solar Energy Industries Association's "Guide to Federal Tax Incentives."