Op Ed: What If U.S. Gas Remained $2/gal For 25 Years?
The average 2 vehicle US household could easily spend $40,000 more over 25 years by continuing to fuel with $2/gallon gasoline opposed to switching to EVs powered by a photovoltaic (PV) solar array.
This article will address the following issues.
- Though the variables vary greatly, $2/gal gas remains the more expensive source of energy.
- The switch to PV can be made even for a mobile society.
Range and cost are the top reasons given today for postponing the purchase of an EV, and the $2/gallon gas argument is given as conclusive evidence that it is not fiscally responsible. While in a handful of states this can be true when buying electricity from utilities, it will rarely be the case when the consumer makes their own solar connection.
Solar photovoltaic (PV) combined with an electric vehicle (EV) is a winning combination both environmentally as well as economically. While the idea of going solar is intriguing, the vast majority dismiss the notion due to their lack of available roof, real estate, or personal mobility.
Peder Norby, recently made the fiscal case here on InsideEVs. He built his model around $3.5 per gallon gasoline with a 3.5% annual increase in cost. Though Peder’s estimate for picking an average value for gasoline over the next 25 years seems reasonable, there are some who would still point to the weather of the current price per gallon rate as a reason to wait, opposed to the long term climate of cost. Peder made a detailed case for sizing the solar array of which will be followed in the following example.
So what if the effective price of gas remained $2/gal for 25 years? There are a number of variables to be considered, and they vary by region, person, and a host of others. I will attempt not to cheery pick either the best or worst case scenarios, but rather make a single case built around US national averages. The reader can make their own adjustments accordingly for their situation.
Here are my parameters:
- The mean number of vehicles per US household is 1.8, so I have selected 2 autos per household. here
- The annual miles driven are set to the national average of 13,476 miles per vehicle. here
- The average miles per gallon (MPG) is currently 24.1 . This number also includes SUVs and trucks, so I have chosen to increase the MPG to that of most compacts, coups, and sedans at 32 MPG. This number can be raised or lowered. The primary reason for setting this in my example is to match the available EV market and to tighten the size of the solar array for this example.
- The size of the solar array will vary based on available location, regional climate, and energy required to power the size of your vehicle as mentioned above. PVWATTS calculator is one resource to help calculate your specific requirements. By focusing on compacts and midsize sedans, I have set the average array size for two vehicles to 5 kW array.
- The average cost for solar is set to $3.5 per watt. here
- 25 years is the normal warranty life of the solar array. This becomes the time baseline.
- An annual growth rate is set to 3.0%
13,476 miles / 32 MPG * $2 per gallon * 2 vehicles = $1,685 annual household cost. At 3.0% annual increase over 25 years = $61,416
A 5 kW solar array * $3.5 per watt = $17,500 less 30% federal incentive that extends through 2020 = $12,250. Additional funds are required based on the interest and terms of the loan. A 60 month loan at 6.5% could add $2,131 for a total of $14,381.
$61,416 for gas vs $14,381 for a 5kW solar array leaves a $47,038 delta in the given example.
There are other variables to consider that both add or subtract, though $2 gas never converges as the cheaper energy source.
The EV-PV connection is not only environmentally sound, it is fiscally responsible. So how low would gas have to go to equal the EV-PV duo? Somewhere in the neighborhood of fifty cent/gal …. for 25 years….
Some DIY adopters like myself have cut this number in half by doing the labor and filings themselves reducing the cost to roughly $2/watt here. For those like myself who installed their own system, it now forces gasoline to nearly 25 cents/gal…. for 25 years….. Though few are capable of taking this frugal option, I think it is worth mentioning, for there is no equal option with gasoline, natural gas, or hydrogen.
At this point, someone will want to point at the tax credits supporting the system. I want to take on that argument in this article other than to say I call their renewable tax credit subsidy and see them our medical subsidy for death and lung disease caused by the particulate matter of burning fossil fuel. Most get lost in the CO2 warming our climate, that they totally disregard the cost of particulate matter. Not to mention the trillions of dollars spent in foreign occupations. So as for subsidies? You don’t want to go there.
Back to $2/gal. If you are anywhere near the national averages, you will spend on average $47,000 extra which could go toward paying a premium for the EVs purchased over the 25 year period. You may choose to lease your first or second EV as prices drop. You may choose to enter the EV waters slowly by purchasing a used Nissan Leaf or Chevy Volt. If that route is of interest, you will find some of the best notes right here from InsideEVs contributor David Murray.
That covers the EV. So what is holding up some EV drivers from making the PV switch to solar as their energy source?
While upfront cost and length of return on investment have stymied solar growth, so have the following. Over half of the population does not have a roof of their own, and of those that do, half of those have trees or other sunlight blockers, or simply have the wrong orientation. To add to that, we live in a mobile society that simply can’t or want commit to a 25 year solution. Here are some real solutions to those problems.
Community Solar :
In the U.S., there are three primary models: owning your solar array, leasing the solar panels, or subscribing to the solar energy output. Each arrangement offers different advantages, from convenience to long-term payback. here
Community solar is an option for those who do not have the roof or real estate of their own to construct a solar array.
Owning Community Solar panels: For those who can afford the upfront cost, and are in a position to transfer ownership of the panels if they move, this is the most lucrative option for those without a roof.
Leasing Community Solar Panels: Requires less upfront money, but will allow you to enjoy the offset of renewable energy. The downside, being that your energy is limited to the length of the lease, not the life of the panels. You also have the problem of transferring the lease if one moves.
Subscribing to Clean Energy: Not to be confused with power purchasing , where the customer pays a premium for renewable generated energy. This subscription model offers immediate savings with no upfront fees to join, and also allowing customers to leave on short notice without penality. While these plans are less financially rewarding, they are gaining popularity with millennials and the rest of our ever mobile society. The benefits of the subscription model are always subject to change, but with no exit penalties, there is little risk.
Check with both your utility and congressman to find out where your state stands on this rapidly growing option that is being offered by both utility companies and third party suppliers.
You Can’t Take it With You
In our mobility society, most feel there is no way to own their own solar array. While a solar subscription offers one strong solution, there is still a road map for owning your own panels, and it is the EV-PV combination use of solar as the offset to transportation energy that holds the key. For millennials and others who are on the move, here is one such tool for marketing your solar panels when you move.
Once again, there are many variables involved, but PVValue is a great resource to place a fair value of your system for the future home owner. If your annual usage matches the tables of PVValue, it will be a reasonable tool. Most of all, it is a fundamental business tactic to negotiate with tangibles, like a solar array in this case, opposed to simply shaving a few percentage points off the sale of your home.
What if you move after only a few years of usage? By using tools to place a future value on your array, you can minimize your risk to a few thousand dollars. In the EV-PV combination, you have also reduced your fuel cost by a thousand dollars or more annually per EV, as well as enjoying many true zero emission miles.
All parameters have not been discussed here. You can argue factors that add and subtract cost to the EV-PV combination, but the final result is always superior to driving an ICE on $2/gal gas for 25 years. You may pay more for your first EV, though most have chosen to lease during the introduction of the now 27 available models. Some have chosen from the emerging used EV market with available models now in the mid $teens.
If you insist on buying vs lease, with the $47,000 saved over the life of your array, there is quite some margin to pay more for your first EVs. Move a decade down the road, and it is almost certain that the margin between EVs and the ICE narrows.
A note on job creation
Currently a third of US electricity comes from coal, a third from natural gas, and less than one percent from solar. Yet in 2014, US solar jobs passed coal jobs 2-to-1. In 2015, solar jobs surpassed oil. This largely happened due to the volatility in the US oil market, but it happened all the same. Congress has passed legislation extending the 30% federal energy credits through 2020. With this legislation, studies show that solar power should reach 5% of the US energy mix through 2020. The impact on job creation for all countries adopting solar is staggering. The 5% increase is noteworthy to the EV community, for more and more drivers are making the EV-PV connection. These two industries fuel each other.
From the rise of hydraulic fracturing, to the slow increase of EVs and PV power, to a plethora of other factors, the oil industry struggles as the US consumer enjoys $2/gal gas and less. Still, the idea that $2/gal gas is cheaper than driving electric just doesn’t hold up. Pick the renewable option that best fits your lifestyle, and start the savings both environmentally and financially while enjoying zero emission miles. Here are two strong closing statements.
Today, $2/gal gas is not the cheaper solution, and, it’s unlikely that gasoline will remain $2/gal for 25 years ……