Chris Kaiser's Articles
Energy Monitoring: TED 5000 and Google Power meter
I first wrote about the TED 5000 when I installed mine in July 2009. While there are many energy monitoring tools on the market, I am convinced the TED (The Energy Detective) made by Energy, Inc. is one of the best devices for residential consumers. Their new model, the TED 5000 was just picked by Google to be the first device partnership for the Google Power Meter software, so this is a huge vote in confidence in their product and I think validates my opinion.
So why do you need an energy monitor?
Well, you don’t, as long as you are happy just getting the bill from your utility each month. But if you actually want to take a proactive stance regarding reducing your energy consumption then you should consider getting an energy monitor. Studies have shown that an average reduction of 10% is realized just by monitoring energy.
There are two types of energy monitors: appliance level or whole home monitors. Appliance monitors, like the Kill-A-Watt, just measure individual outlets. You plug the appliance monitor into an outlet, then plug your appliance into the monitor. The advantage of these is that they are low-cost ($20-$30). The disadvantage is that they can only measure one appliance at a time (or multiple appliances if you use a Kill-A-Watt strip), but they can’t measure the big loads in your home (like your dryer or AC units) or your whole home’s energy consumption (like the meter that the utility installs on your house).
A whole home energy monitor does just that. It is like the meter your utility installed on your house, but unless your utility has already installed a smart meter, you still have to get your home’s energy usage the old fashioned way: by going outside and reading it yourself or waiting for your utility to bill you. A whole home energy monitor, like the TED 5000, can tell you your home’s instantaneous energy consumption either with computer software or a display unit, or both. The TED 5000 can come with a display unit, but since it will now come with the Google Power Meter software I’m sure more people will rely on that.
What is the advantage of having instantaneous data and computer software?
A whole home energy monitor that stores instantaneous data and comes with computer software (the TED 5000 does) enables you to keep a record of your home’s consumption habits and plot it on a graph. This enables you to see how your home uses energy in a very detailed manner. If you are just relying on your utility, you can probably only see month-to-month history, but this doesn’t help you see how much energy your home used while you were away over the weekend (should be very little, but was it?) or notice the fact that energy use keeps spiking in the middle of the night and you aren’t awake to check a display (was a faulty pool pump at 3 A.M. the guilty party?).
Only by drilling down into your energy consumption can you really begin to understand how your home uses electricity. Once you understand this, you can really begin to take the steps necessary to reduce it. While whole home energy monitors may be more expensive (around $200) than appliance monitors, the amount of data they provide on your home’s consumption habits make them a much better investment over the life of your home.
Chris Kaiser is founder of Mapawatt Blog which focuses on reducing energy and water consumption and sustainable ideas.
MapAWatt Blog: Residential efficiency returns
As seen on MapAWatt Blog by Chris Kaiser:
The bad news keeps rolling in: job loss, falling housing prices, falling stock market, growing national debt, etc., etc., etc. Not only do we have to worry about our wonderful declining economy, but we also get to look forward to rising temperatures and energy prices. Mapawatt Blog is loving the great news these days! Why is Mapawatt blog revelling in our frustration? Because when in the history of the world has there been a better time to be a blog about energy conservation!
If you haven’t caught on to the fact that investments in energy conservation are probably better than current investments in the stock market, then you need to put down your Investing for Dummies book and start reading Mapawatt blog or the book The Home Energy Diet. I actually planned on writing about energy efficient windows today (don’t worry, I will do that later this week) but when researching tax incentives I started down this other train of thought. I decided I needed to write this while looking at the current tax credit from the IRS for energy efficient improvements.
The credit is for improvements installed in 2009 and 2010 and equates to 30% of the purchase of energy-star door/windows/skylights, insulation and sealing, and certain home heating and cooling equipment. The Alliance to Save Energy has a good summary table on their page. This credit goes up to $1,500. So you can spend $5,000 on improvement and assuming you pay taxes, the government will give you back $1,500 dollars next year! Which got me thinking: There is so much focus on falling stock prices and home prices, why isn’t there more focus on investments that are actually improving?
So I had to do an analysis!
I totaled the cost of the energy I consumed from April 2008 to March of 2009 which included electricity (kWh) and natural gas (therms). I didn’t include any service charges charged by the natural gas marketer because these are flat rate charges and do not vary on the amount you used. I did include sales tax on the electricity, because this is only charged on what you use. If you don’t use kW, you don’t get charged tax on them. The total amount I spent in 12 months was $1,318.79! I know Georgia has relatively low energy prices, but I’d be interested to see your comments to see how this compares to other parts of the country!
I then made some assumptions to compare energy efficiency improvement to investments in the stock market. Let’s assume that I had $1,000 dollars to spend at the end of this year and I can use this money to buy more efficient windows/air conditioner/insulation/heat pump/etc. or I can spend this money buying $1,000 worth of stock. I’m going to use the $1,318.79 for my baseline annual energy cost and make the following assumptions:
- Energy (both electricity and natural gas) prices will rise 5% annually (this is seen by many to be a VERY conservative estimate)
- The $1,000 dollars I spend on energy efficiency improvements will save me 10% on my bill annually. (Probably conservative as well)
- The hypothetical stock will appreciate 5% annually (historically this is low, but it’s excellent considering what we’ve seen the last few years)
- The stock does not pay dividends
- The capital gains tax incurred when the stock is finally sold will be 15%.
Based on these assumptions I calculated out to the year 2020 at which point I added up all the money I saved from my conservation improvements (10% of my energy bill each year) and added that to the tax credit received in 2010 of $300. I then compared it to the money I made from selling the stock, minus the capital gains tax. It is important to note that money saved by efficiency measures IS NOT TAXED.
So the results? $1,000 invested in efficiency improvements returned a net profit (money earned minus initial expenditure) of $1,267.26; while the $1,000 invested in the stock market returned a net profit of only $603.79! I must point out that one also has to consider risk when making these decisions. Not only do the energy efficient improvements seem to make more sense on a straight monetary basis, but they are inherently less risky! I can almost guarantee you that energy prices will not be lower than what they are today in 10 years, but as we have seen, the same can not be said about the stock market. Now, with increased risk comes increased reward. So if you need to make a lot of money, the stock market is your best bet, but I like to make smart, safe decisions and not leave my fate up to Wall Street. Looks like efficiency improvements need to start getting some more attention from the investment crowd…
*I’m hiding some cells in an image of my excel analysis below just so it fits on the screen.
