Written by: Christian Murphy
Posted on: August 7, 2003

Traditionally, as an individual consumer you are often left out of discussions about electricity issues, since the electricity that you consume is something that is fed to you with very few other options. In some states, with the introduction of deregulation, you now have more choice as to your electricity supplier but you still get your electricity the traditional way, through the electric grid. Another possibility also exists for you for an electricity supply: distributed generation.

Distributed generation (DG) refers to the placement of electricity generators close to the point of use. Currently most electricity in the United States is generated in large central plants running on coal, nuclear, or natural gas with some hydroelectric power thrown into the mix. The electricity is then transported to you through the power lines that make up the national grid. DG does not move these plants into your neighborhood but is actually replaces these huge plants with small generators that will convert fuels or sunlight into electricity.

Much of the national discussion has been about electric utilities' use of DG to improve the performance of their systems. This discussion ignores the fact that you as an individual can buy equipment to be installed in your house that generates electricity. To differentiate these small installations from the utility based DG, residential level DG is called microDG.

This overall goal of this primer is to present to you the technologies that are out there for you to use that generate electricity and also to discuss why you would want to use microDG. We look both at technologies that are currently available and those that will become available shortly. The next section outlines the advantages to you of installing DG in your house. From there we move to a broad system overview and give you an idea of what is required to install such a system. A discussion of the specific microDG technologies that will fill the needs of powering a home will then be presented.

Why would I want to use microDG?

You are probably fairly happy with your current electric service. Sure you would like electricity that is there 100 % of the time and is free, but the cost of your current supply does not really burden you that much and the overwhelming majority of the time when you flip the switch, the light goes on. On those rare occasions when the light fails to glow, the utility company is probably already in the process of fixing the breakdown. Why would you want to add another appliance to your life to cause you problems, especially one that provides a fundamental standard of living need such as electricity?

There are two main reasons to change from your current state of energy supply: Either the new system is cheaper than what you currently have or it provides you with a service that you desire. MicroDG has the potential to fulfill both of these desires.

Currently microDG is not cost competitive with traditional grid power for most uses. If your house is over about a quarter of a mile from power lines it is probably economic to install photovoltaics.

According to EIA the average cost of electricity in the U.S. was 8.10 ¢/kWh in 2002. This cost varies from state to state with a maximum of 13.2 ¢/kWh in Maine (Hawaii comes out on top with 16.3 ¢/kWh but is an island with limited local resources) and a minimum of 5.3 ¢/kWh in Kentucky. It is a challenge for most microDG technologies to compete with these numbers.

That being said, the cost of microDG generated electricity is coming down all the time as new developments arise in manufacturing techniques and as more units are manufactured, reducing costs. Specific numbers about the costs of microDG technologies and when they are expected to be cost competitive with grid generated electricity will be given below.

An argument can also be made that the cost of current centrally generated electricity does not capture its full impact, as its emissions that pollute all of our air are not fully paid for. Some microDG technologies run at higher efficiencies than traditional power plants or rely upon renewable resources. These could result in a reduced environmental impact from our energy use. As the environmental impact is factored into the cost of our electricity generation the use of other technologies will become cost competitive.

Another aspect of the cost discussion that is sometimes overlooked is that if the initial microDG investment is financed as part of home loan, the interest payments for that loan have the potential to be tax deductible. This is getting a tax deduction on part of your energy bill. In addition, there are state incentives for various installations that may additionally help with the equipment costs. Being able to say that your house supplies some or all of its own electricity may also increase its resale value.

MicroDG can also provide you with additional services. One of its primary advantages is for backup power and here cost may not be quite so much of a factor. In addition, dependent upon the type of generator you choose, you will be isolated from the fluctuations in electricity prices that are now possible in deregulated markets.

Generating electricity close to the point of use also provides the opportunity to use not only the electricity but the heat that is generated by some technologies. The heat can be used to heat your home or water or even to cool your house. In a traditional power plant much of the extra heat is merely released into the atmosphere or a nearby body of water creating thermal pollution. If this additional energy can perform a useful task the total amount of energy consumed can be reduced. The result is a reduced environmental impact as well as a decrease in the consumption rate of our energy resources.

In the end the decision to install microDG will probably hinge on whether the benefit you get is worth the cost to you. The determination may not be numerically rigorous but will be appropriate for you.

What are the technologies available to power my house?

This section is under development

The primary technologies that are now most promising for microDG applications in a residential setting are:

• Fuel cells
• Photovoltaics
• Stirling Engines
• Internal Combustion Engines
• Wind Power (for some locations)

This analysis focuses on electricity generation but there is a significant advantage from avoiding the use of electricity through some other technologies which are mentioned below in the Avoiding Electricity Use section.

What is required to use microDG for my house?

What is required to use microDG in your house will be highly dependant upon the specifics of your system. The big differentiation has to do with whether the system is connected to the grid or is a standalone system that supplies all of its own power. A grid connected system can use the grid as a virtual storage structure as it can put energy onto the grid at times of excess generation and draw from the grid during times of insufficient generation.

Most systems require an inverter which converts the electricity into a form usable by appliances. For example, photovoltaics produce DC power while most appliances use AC power. It is possible to create a DC only house, and in the future this may become more common, but for now most appliances run on AC. Some fossil fueled power generators have built in inverters or naturally generate low quality AC power.

For systems that are connected to the grid the inverter has to be designed to provide an intertie to the grid. This ensures that the inverter puts power back onto the grid of an appropriate quality. In addition, an intertie must have safety features to guarantee that power is not fed back to the grid when grid repairs are being performed creating the potential for worker injury.

For the minimum system that merely supplements the grid this is all that is needed: the microDG source, an intertie inverter and the wire to connect them all as well as the mounting hardware. If you desire your system to run independent of the grid, either to supply all of your power needs or to provide emergency backup when the grid fails, you need some other equipment.

For systems that require storage for independent operation, like photovoltaics, a charge controller must also be included along with the storage device, like batteries. The charge controller makes sure the batteries are not overly abused by the rest of the system.

This then is the system requirement for an independently operating system: A microDG source, probably some storage and a charge controller, an inverter, and wiring and mounting hardware.

Avoiding Electricity Use

Some distributed technologies that collect energy but do not generate electricity are worth mentioning as part of this discussion as they can displace some of the electric load by doing work generally performed by electricity.

For heating water, solar thermal systems are quite effective. The solar heat-pipe technology is one of the new advances in this area. Using solar energy to heat your water can be a significant energy saver and may also be cost effective. Designing your house to use the natural behavior of the air to capture and distribute the energy of the sun is a very effective way of reducing your heating and cooling bills. These techniques are called passive solar design. Along with this comes proper insulation and weatherization of your home. Weatherization can significantly reduce your heating and cooling bills and does not require a redesign of your house and is most often quite cost effective. It can even produce a return on your investment in excess of that which you get from normal investments such as bank accounts.

It is also possible to realize some savings through the use of more efficient appliances though this depends upon the appliance and may not be cost effective if you do not have to replace the appliance as your old one is broken.

These are just a few suggestions of improvements you can perform that can save you energy as well as money.

References

EIA

Energy Information Agency found here