You presented a lot of information, very clearly, in a short time. The presentation
was **excellent **and content **very informative **and
useful. Good Class – I’ll recommend it to other engineers.

Carl L Skiles Yalaha, Florida

Engineering, Inc

By Eric H Coffin, P.E., C.E.M. President Green Energy Engineering Monday, November 20, 2017
First came coal, then petroleum, then nuclear, and then alternative energy. The new kid on the block (5 Consider the traveling salesperson that puts 300 miles on their car each week and buys $4 per gallon gasoline. By trading in that 13 mpg for a new 35 mpg they could save over $3,000 per year. Air conditioners also have a “mpg” and it is called Energy Efficiency Ratio (EER) and is defined as BTU per hour of enjoyed cooling divided by watts of electricity painfully purchased at an outside temperature of 95ºF. This paper will show how you, the payer of electric bills, can make an informed a/c purchasing decision that will yield a better rate of return than enjoyed by the famous investor Warren Buffett. According to the July 7, 2008 issue of Forbes Magazine, “The Case for Efficiency” there was a 46% drop in U.S. energy intensity between 1975 and 2005 that did not come from giant plants but instead “zillions of tiny pieces imperceptible to the untrained eye, energy efficiency gets little respect.” A similar story comes from the January 17, 2015 issue of The Economist magazine entitled “Invisible Fuel.” Eleven members of the International Energy Agency, including U.S. and European countries, saved 1.4 billion tonnes of oil in 2011, worth $753 billion. They go on to say “The cheapest and cleanest energy choice of all is not to waste it.” A 2010 McKinsey & Company report entitled “Energy efficiency: A compelling global resource” states that “Globally, energy efficiency represents about 40% of the greenhouse gas reduction potential that can be realized at a cost of less than €60 per metric ton of carbon dioxide equivalent. In many cases, it is an extremely attractive upfront investment that pays for itself over time…”
The wattage draw of this 3 ton example a/c unit is (12,000 BTU/ton * 3 tons) / (8 BTU/hour / watt) = 4,500 watts. The actual hours of a/c use is = 19,751,000 watt hours / 4,500 watts = 4,389 hours. The dollars for operating this example a/c unit is 19,751 kWh * $0.1612 $/kWh = $3,183. The carbon footprint is 40,425 kWh * 1.35 #/year of CO2/kWh = 54,574 pounds of CO2 annually. Step five is to obtain bids and EER ratings on new units and calculate your new operating cost. This example is for a 3 ton unit with an EER of 14. The new wattage draw is (12,000 BTU/ton * 3 tons) / (14 BTU/hour / watt) = 2,571 watts. The new a/c consumption is 2,571 watts / 1,000 watts / kW * 4,389 hours = 11,284 kWh. The savings are $3,183 - $1,819 = $1,364 per year. The original annual kWh consumption was 40,425. The new consumption is 40,425 total – 19,751 old a/c + 11,284 new a/c = 31,958 kWh. The new carbon footprint is 31,958 kWh * 1.35 #/year of CO2/kWh = 43,143 pounds of CO2/y. This yields a savings of 54,574 – 43,143 = 11,431 pounds of CO2 annually. You should construct a table as follows with the bid price and the new calculated cost and annual savings. Note that the EER of 14 has an annual savings of $1,364 (this will be used below).
Step Six is to determine the rate of return on this investment. This can be done by using the uniform series present worth equation shown here.
Where
If you program this uniform series present worth equation into your spreadsheet you can work backwards towards your allowed total installed cost, or P, in the above equation. For instance, using the annual savings calculated above, a ten-year life, and a desired 10% return on investment….one could spend up to $8,381 on a new EER 14 a/c unit. If, however, you wanted a 15% return on your money…one could spend up to $6,845.
If you were Warren Buffett and would only accept 20% on your hard-earned cash…one could spend up to $5,718. By calculating different EER values you can create different annual savings and arrive at different total installed costs. Use this family of savings data to select the best bid and I would suggest at least three bids, (and more are better). The bids should include items such as: equipment, installation, permits, removal and proper disposal of old unit, Freon, and start-up, a new air handler if required, duct work upgrades, thermostat, electrical wiring, circuit breaker, etc. Compare the details of the bids to ensure that you are comparing apples to apples. Some contractors will only quote equipment and a/c installation and ignore any electrical wire cost so as to avoid a high bid, and also to avoid running new wires through walls and attic. The following table is a summary of the before and after results of upgrading to a more energy efficient EER14 air conditioner using our typical 3 ton unit. As you can see from this summary there are impressive savings across the board and the percent savings indicate the power of the 5th fuel. For those of us in the power plant business we know that increasing boiler / steam turbine efficiency is hard, expensive and yields results of less than 1%. To recap from the introduction, we have seen that energy efficiency is the 5th fuel as it allows for considerable reduction in the burning of oil, coal, natural gas, etc. Air conditioning is a very well-known technology and efficiency improvements are introduced each year as the government requires ever better energy STAR ratings. We have shown that the higher initial capital cost pays a better return than your bank without the risk of a stock market fall and this short paper is easy to read compared to the hundreds of annual reports that Warren Buffett reads looking for value. This air conditioner evaluation process has allowed you, the homeowner, some insight into just what a great investment you have outside your home in those bushes. PS – For you hard core engineers looking for a work place application consider that the above analysis can also be performed on large industrial motors, pumps, boilers, turbines, and other large energy consuming equipment. Eric Coffin, P.E. graduated from the University of South Florida in 1978 with a BS in Mechanical Engineering. He specialized in thermodynamics, fluids, and process control. He has experience in Electric Utility, Large Industrial and Heavy Commercial markets. Eric is the founder and president of Green Energy Engineering in St. Petersburg, Florida where he specializes in energy and financial studies for large energy consuming plants around the world. He can be reached at EricCoffinEngineer@Gmail.com.
[1] The 5 [2] The term “Energy Efficiency Gap” was first coined by Eric Hirst and Marilny Brown in their 1990 paper “Closing the efficiency gap: barriers to the efficient use of energy.” Dr. Brown is a professor in the School of Public Policy at Georgia Tech and her research papers can be found https://spp.gatech.edu/people/person/91044ab3-9e96-5940-80a3-46f80924f3d1 [3] See http://michaelbluejay.com/electricity/howmuch.html |