Jim McGregor, Tirias Research, on Sustainable Homes and the Cost of Power03 September 2019
Jim McGregor (Principal Analyst, Tirias Research) describes his sustainable house and discusses the cost of power – solar, wireless and others – with The Charge Guy.
This episode was recorded in August 2019.
Yuval Boger(Chief Marketing Officer, Wi-Charge, @TheChargeGuy): Hello Jim and thanks for joining me today.
Jim McGregor (Principal analyst, Tirias Research): I’m happy to be here.
Yuval: So who are you and what do you do?
Jim: My name is Jim McGregor. I’m a principal analyst and the founder of TIRIAS research. We basically do high tech market research and consulting. We’re not one of the companies that do the quantitative stuff. We don’t do the counting the widgets, but we actually analyze the technology, analyze the market and work with our clients on really coming up with successful strategies to either launch into the market successfully or to continue to build on success and momentum.
Yuval: What kind of technologies do you cover?
Jim: Pretty much everything from sensors all the way to the Cloud. We look at it very holistically. We all have engineering backgrounds and a lot of industry experience, so we get pulled in by everyone from IP companies, to OEM and system providers, to Cloud service providers, to even some of the government entities and research labs.
Yuval: So you and I had a chance to speak a few weeks ago, and I was intrigued by the things you told me about your sustainable house. I wanted to spend a little bit of time talking about power and the cost of power, but maybe you can tell everyone what you’re building and what you found while building it.
Jim: This was kind of supposed to be my retirement project, but my wife accelerated that a little bit. We wanted to build something for retirement that’s fully self-sustainable. So, we spent a lot of time looking at weather patterns, and water tables, and everything, and coming up with a place. We actually selected a place that’s in Eastern Arizona up in the mountains, and we’re building a fully self-sustainable ranch, basically. We live in one cabin now that’s got solar on it. We’ve got a second cabin that also has solar on it that’s being renovated, but we’re building a fully self-sustainable house out of insulated concrete forms using passive solar heating and cooling as well as geothermal earth tubes to augment the heating and cooling, and having fresh air throughout the house. Basically using every technique we could use according to some of the passive home standards in Europe, some of the lead standards in the U.S. to build the most efficient and fully sustainable property that we possibly could.
Yuval: And I’m guessing the first question that comes up is, is it worth it cost-wise? Right? What does it cost to do it with solar versus what would it cost to do it with plain old electricity?
Jim: You know, that is a big question that comes up a lot of times. Now if you looked at just taking a regular house design and putting solar on it, you’re probably going to increase the cost by 25-30%. If you actually build the house around the concept of passive solar heating and cooling and geothermal heating and cooling and really focus on the design of the house with the energy solution you’re using, which in our case is mostly solar, or all solar at this point, it really comes down to maybe about a 10-15% hit. And then you have to look at it over the cost of the house. We’re grid-tied, but we have a hybrid passive solar system, so it basically charges up the batteries and feeds everything back to the grid. But, we can go off the grid at any time. And if the grid goes down, we’re still up and running.
But because of that, we’re actually net positive, in terms of energy production right now, which basically means the solar rate’s paying for itself. So when you consider the fact that in the future I’m not going to have any electric bill, for the most part, and the fact that I am also building a house that has very… It doesn’t have a high energy heat pump or anything like that, and it’s using the passive solar heating and cooling, it’s using LED lighting, and the fact that I’m actually paying off the solar rate even before I move into the house. You got to understand that when I get done, the only thing I’m going to have for bills is property taxes, which are minimal here, and communications expenses. I’m not going to have an electric bill. Matter of fact, we’re on a septic system and a well, so I don’t have an electric bill. I don’t have a water bill. I don’t have any of the typical utilities that somebody would have, and it’s a very efficient, sustainable house.
Yuval: And does that work primarily in Arizona, or that also work in Maryland, or in Illinois, or other states?
Jim: It will work pretty much anywhere. You have to evaluate what the best energy solutions are, whether it’s solar, whether it’s wind, whether it’s a combination of them or other things. If you have water running through your property, you can use some type of a generator, based on the water flow. It’s ironic because I live in the mountains in Arizona. It doesn’t get to the hundred-degree temps that they get down into Phoenix and Tucson, but it’s interesting because my solar array is actually more efficient up here than it is down there because the efficiency of your solar cells goes down once the ambient heat goes above a hundred degrees. So I actually get more power up here out of solar than I would down there.
Now I’ve looked at wind too, but typically most of the wind solutions, first off require a lot of maintenance, and you pretty much have to have a sustainable wind speed of around 11 miles an hour or more. I have some high winds, especially during the spring. I have gusty winds, but I don’t necessarily have sustained winds, so I haven’t really put in a wind solution at this point. But, I am looking at it for the future.
Yuval: And you had the luxury of deciding where you’re going to build a home-based on the energy parameters that you were discussing, right?
Jim: Well not just the energy, but also to build around sustainability, you have to think about water. When I first started looking, I didn’t even think about that. You know I started looking at, “Okay, I just need to be close to an international airport for what I do.” Well, one of the areas I looked at, which is just about an hour outside of Phoenix called Payson, I was looking there because it’s a 5000 feet, nice weather pattern. I could do a lot of the same design techniques. The only problem is they don’t have water. So if you’re really thinking about sustainability, you have to think more than just power. You have to think about water. You have to think about everything that’s going to impact your life.
Yuval: Last time I looked at the average cost of electrical power in the U.S., I saw something like 12.5 cents per kilowatt-hour. Now, I don’t know if you run the numbers, but if you assume, say a 20 year or 25-year lifestyle with the solar panels and take into account the extra cost of installing them, and batteries and what have you, do you have a sense of what the cost per kilowatt-hour comes out to be?
Jim: I looked at that, and it really depends on how efficient your solar array is. It can actually be considerably lower than that if you’re in an area that gets a lot of sunshine, like what we do. I think it’s about anywhere from two thirds to three-quarters of that 12 cents a kilowatt figure, and it can be a little bit more. The one key thing that really keeps it below some of those figures today is the incentives for installing this renewable energy, especially solar. The fact that starting in about 2011 when the Chinese really came on, they drove the price of solar power panels down drastically. Now those are going to start coming up with the tariffs that have been put in place this year, but also on top of that drastic reduction, the solar panels, not to mention the inverters and everything else, there’s the federal tax incentive, which is 30% of your installed costs. That’s huge. Some states offer incentives. Arizona offers $1000 per installation. And then there’s also sometimes incentives by the power companies.
When I first put my first solar array in, they were offering $3 per watt. Basically, for an 8.5-kilowatt system, I got almost $30,000 back. In other words, I put… My initial system was around $55,000. A couple of years earlier, it would have been around $85,000, but with the price of coming down, it was about $55,000. With all the tax incentives and everything else that came back, I paid about $8500 out of pocket after I got the tax incentives, and that paid for the solar panel. With the energy production it was producing, the array, it actually paid for itself in about four years.
Now, I’d say the average payback for consumers with the federal tax incentives and just at least minimal incentives on top of that, you’re typically talking 10-12 years. Now if there are no incentives, it may be closer to 15 or higher, even closer to 20. Once it gets above that 10-15 year rate, you got to start thinking about it, but you also have to think about what’s the cost of energy going to cost in 10 or 20 years if I’m living in this house.
The reason I really got interested in this was that I tried reducing the energy in my house in Mesa, Arizona over three years. I managed to reduce energy consumption by 5-10% per year for three straight years by putting more insulation in the attic, going to double pane windows, doing extended overhangs, going to compact fluorescent lighting, all this stuff. I did everything, but my energy bill still went up 5-10% per year because they were starting to charge surcharges for some of the fuel charges and everything they were going through. That’s one thing that most people don’t figure out is the cost of the energy you pay today, no matter what you look at is probably going to go up over time.
Yuval: And I suspect that part of the motivation for you to do it was social reasons, right? Maybe you believe in sustainable energy, maybe you want to get off oil or coal, or other methods of producing energy. Is that the case?
Jim: That was part of it, but I’ll be honest with you. The major reason was, I’m cheap. I want to be able to retire in the U.S. on almost nothing. I don’t want to have to retire down in Ecuador or Honduras, or some of these places they say are really cheap to retire. I want to be able to live here in the U.S. and enjoy all the aspects of it, but I don’t want to have utility bills that equate to a home mortgage payment.
Yuval: So at Wi-Charge, as you know, we use infrared light to deliver power wirelessly. So, we don’t use solar, but sometimes we jokingly call it indoor solar because just like you use the infrared light from the sun to power your house, we can use infrared light that we send internally to power small devices. It was very interesting that you spoke about the cost difference between new builds and retrofits; putting solar in your existing house versus building a completely new house. We see the same things. You used to see them with network connectivity. People Would build new homes with Ethernet cables in the wall, and now they don’t need to. They just do wifi. If you go to… If you want to deliver wireless power in a bathroom for instance, or power in a bathroom, tearing up the walls is really a major project, and delivering it wirelessly is much, much easier. So I was curious to hear what you think about it the same way for solar, and as far as the difference between new builds and retrofits.
Jim: Oh, absolutely. There’s an obvious convenience for the consumer to be able to receive power from anywhere in their home, especially if it’s built into their home, but it’s also in the design of the devices and systems you use. And the fact that, just like with wifi, with having wifi integrate into all these different devices, I don’t have to have them connected to Ethernet when I walk around the house. The same thing’s going to be this… It’s going to be the same thing with power. The ability to have very small portable devices, some things that you carry around, some things are just integrated in your house, that automatically received power. I mean think about trying… Just think about having a smart house. Think about having the door locks, the lights, all these different things around the house, sensors, clocks, blah, blah, blah. All these things that you want to have intelligent, it could be hundreds of devices. As a matter of fact, just attend CES and you will see hundreds of devices, if not thousands.
Jim: The same thing is true for power is it was with wireless connectivity. It becomes cost-prohibitive to use a lot of these solutions if I have to run power to everything or even, as a lot of people are finding out, if I have to change out the batteries on 50 or 60 devices throughout the year, that gets really, really annoying really quick.
Yuval: And then there’s the cost aspect. I mean I was doing the calculation a couple of weeks ago and I wrote a blog post about it, but if you go into Amazon and say, “Okay, I want a hundred pack of AA batteries.” It’s going to cost you 20 bucks and you say, “Well how much power does it give me and what’s the cost per watt-hour?” It’s going to be about maybe 500 times the cost of wire power. But of course, you have the convenience aspects. You can’t run power cords everywhere you want portable devices. We see that wireless power gives you sort of the middle ground.
Yuval: It’s never going to be as efficient as wired power, but it’s going to be a more efficient, lower-cost in batteries, and of course as you mentioned, relieve you from the need to worry about whether your battery runs out. Do I have the right battery? Do I have to climb up a ladder to replace the battery? How often do I need to do it? And so on, and so on. They used to say that the modern dad has turned into the CIO of the home just because of all the network devices, and now you turn into the maintenance group just because of all the battery devices.
Jim: That’s absolutely true. To your point, it may be less efficient, but then when you think about the design and you think about maybe combining this with solar or wind energy, it’s still going to be, in terms of overall costs, not just initial costs but the lifetime cost of all those products, the energy, the batteries, all these different things, not to mention your time, it works out to be a much better solution than trying to go with a whole bunch of battery-powered solutions or trying to install more wall outlets everywhere. It just doesn’t work.
Yuval: So as we come closer to finishing our discussion today, if you were in charge of the Wi-Charge work plan for the next 18-24 months, what would you have in this focus on?
Jim: That’s a very good question. I think the one thing I would see is seeing how Wi-Charge fits in with those other technologies, fits in with wifi fits in with Bluetooth fits in with the other wireless connectivity technologies that I think it matches well with, not to mention with the other alternative power technologies… Instead of batteries, what could you use in terms of maybe even a solar panel that sits in your window, or something like that. Being able to provide a complete platform, in terms of that connectivity, in terms of the power, in terms of everything, that the consumer’s going to see a benefit out of. I think all too often when we think about the smart home or the smart building, or even the smart city, we think about one technology or one aspect of it instead of a holistic design or holistic platform that is going to be usable and have benefits, multiple benefits, not just one or two.
Yuval: Excellent. So Jim, where could people get in touch with you to learn more about your work, or the sustainable house, or all the other interesting things that you’re working on?
Jim: Well, in terms of the technology, you can contact us at http://www.Tiriasresearch.com . You can also reach out to me and email@example.com. I’m also @TEKstrategist on Twitter, on LinkedIn, on Facebook, and TIRIAS research also has those social networking sites. I’m also launching a new blog on sustainability. It’s not up yet, but it’s going to be called greentrademark.com, basically leaving a positive image on the earth instead of a negative one. You can also keep up with us through some of our media partners. We publish through Forbes, EETimes, The Next Platform, and the ECT publications including TechNewsWorld and eCommerce Daily, and there’s a couple of other publications in there.
Yuval: Sounds great. So if people can’t find you, I guess they weren’t looking. It sounds like you’re very, very, very easy to find. Well Jim, thank you-
Jim: If nothing else, you can just Google Jim McGregor and/or TIRIAS research, and you’re going to come up with thousands of hits. You’ll find me.
Yuval: That’s perfect. And we’ll have all the links on the transcript of the podcast. Thanks again, Jim.