Is solar air conditioning worth it?

Digital calculator for analysis below can be found here: https://airspool.com/is-solar-air-conditioning-worth-it

YouTube vide for the analysis below, and how to use the solar ac justifier/digital calculator tool can be found here: does solar air conditioning pay for itself: https://youtu.be/AW0bvMXyFdM

Is solar air conditioning worth it?

Solar air conditioning is getting traction now for a few reasons. First, it’s now possible to run these specialized air conditioners (or a heat pumps, meaning that the unit can provide both heating and cooling) by simply plugging solar panels into the outdoor unit, so no batteries, inverters, or external voltage controllers are needed when it’s sunny, and many units (optionally) allow grid power to run the unit at nighttime or when it’s cloudy. These latter units are called ‘solar hybrid air conditioners,’ or ‘solar hybrid heat pumps,’ since most also offer heating; these will be our focus for the analysis. So, yes, they work easily and relatively inexpensively now when before more solar and complicated configurations were required. Next, many people are fed up with their local utility’s semi-constant price increases and want to protect themselves against future increases. Plus, many utilities are changing (in the utility’s favor) net metering regulations or doing away with net metering all together. (Net metering is the process by which homeowners can sell back any extra solar energy their panels produce to the utility.) As such, homeowners are being backed into a corner and being forced to try new ways to save with solar. One of these is solar air conditioning. But is it cost justified for your situation?

The justification analysis

There are really two aspects to peek at to determine the viability of savings based on your situation. First, there’s the hard-dollar contribution of energy savings. These objective savings are important. But, your particular needs may make some user-assigned subjective savings equal to, or even great than, the electrical savings.

Hard dollars

The 3 main pillars holding up the solar air condition hard-dollar value canopy are…

Electrical energy rates in your area
Air conditioning hours in your area (based on length and depth of your summer heat)
Solar irradiance where you live (i.e., the strength of the sun to help develop solar power)

Additionally, since as of now, most solar air conditioners, or solar-hybrid air conditioners heat pumps (since most of these can optionally be run using grid power and can heat, too), are mini-splits, we also need to do a base analysis which calculates the savings of adding a mini-split to the space. Huge savings can be harvested by simply adding a mini-split, setting aside whether or not it can be run on solar. So, we’ll look at this, too.

What’s my electrical energy rate?

According to U.S. Energy Information Administration data, consumer rates have increased 139% since 2000, almost twice the rate of inflation. Check out this map from 2013 created by the National Renewable Energy Laboratory…

What’s amazing about this is that few places were imperiled by rates above $.15/kWh around 10 years ago, and the average cost of energy in U.S. is now a whopping $.1593/kWh. Here’s a chart (for the average price per kWh) at the state level now…

Click on your state to learn your average cost per kWh, and write it down. You’ll need this later.

There are a multitude of reasons for the grid rate increase (e.g., coal (rightly so) is being phased out, the grid’s infrastructure is crumbling and needs help, renewables (rightly so) are being integrated into the mix, the demand for electricity has increased). We as consumers (unless we’re ensconced in a Public Utilities Commission board seat) are powerless over these increases. Or are we? As the saying goes, change the attitude, or change the situation. Solar, and specifically solar-powered air conditioning based on our subject at hand, gives us the power to take on the powers controlling the power.

How often do I need to run my air conditioner each year?

In the summer, it’s hot just about all over, but some heat is more oppressive than other heat. Here in Las Vegas, we have what’s called a lot of simple heat, meaning that it’s like an oven in the summer. But, we seldom (except for some days in monsoon season from July 1 – August 31) have much humidity. Meanwhile, in upper Midwest places like Cincinnati, the humidity can be a killer in the summer. It may ‘only’ be 80 degrees F., but when the humidity level is 85%, this humidity, called latent heat, is debilitating. And, in places like Orlando, New Orleans, and Houston, it’s a double dose: humidity levels above 80% and temperatures often exceeding 90 Fahrenheit. So, air conditioning acts to both cool the air and drain away the humidity. See the chart below from the Air Conditioning and Refrigeration Institute (now the Air Conditioning Heating and Refrigeration Institute) which shows approximate hours/year you likely run your air conditioning unit.

Adjust and average a bit based on your location, and jot down this number for later, too. Example: if you’re in St. Louis, you’re likely needing more than 1,000 hours/year of air conditioning, and likely less than 1,200 hours/year of air time, if your usage habits are normal. In Las Vegas, which will be our analysis sample city, there are between 1,400 and 1,600 hours/year of air conditioning used, on average, so let’s go with 1,500 hours. We’ll fine tune your run hours in a bit, but for now, on to the sun…

How sunny is it where I live?

You probably have a pretty good idea if you live in a sunny area, right? The irradiance map of the U.S. (form the National Rewable Energy Laboratory) is shown here on an annual aggregate basis.

The darkest areas show areas that have at least 5.75 hours of peak sun, where peak sun is defined as 1,000 watts of solar irradiance/square meter. No big surprises on an annual basis. But, what’s interesting is that some places that don’t get much sun the rest of the year are pretty darn sunny in the summer. Buffalo comes to mind, where around 59% of the summer days are sunny. Wilmington, NC, which is 3 shades darker (meaning sunnier) on this aggregated annual map than Buffalo for a full-year basis, is blessed with good sun only around 48% of the time for its summer days. Why’s this important? Most of the annual heat load needing to be addressed with air conditioning occurs in the summer in most areas. So, if we’re going to be running the air conditioner with solar, we need sun, the more the better! Curious about your area? Check out the Weatherspark to find your city and note the demarcation line between cloudy and clear days (the black line dividing partly cloudy and mostly cloudy) and average out the midpoint value for the summer months of June, July, and August. If your air conditioning season is significantly longer than just the summer months, feel free to average in for the additional months for which you have a similar cooling need as the summer months.

Example for here in Las Vegas…

You can see that June, July, and August are 85%, 83%, and 83% sunny (clearer) days from the bottom of the chart above. So, for the summer, it’s sunny 83.67% of the time (on average). So, we’re assuming that solar panels can effectively produce power during the day in the summer 83.67% of the time. It’s pretty hot here still in September, too, with air conditioning running most of the time, so if we add that month into the average, we’re at 84.5%. We’ll make use of the average figure you came up with here shortly. You might say, “But solar panels can still produce some power when it’s cloudy!” Yes, a bit, and we’re assuming that’ll help offset the partly cloudy time we are counting toward viable hours to run the solar air conditioner.

Combine the 3 elements

So, conceptually, the need for air conditioning, the ability to run it using solar, and value of the savings (based on cost avoidance from paying your local utility) are combined. Let’s think of them as rungs on the ladder to get over the wall, where there’s a chest full of savings doubloons on the other side.

Example: Lexington, KY

Need for air conditioning: 1,000 hours/year (average)

Available sun in the summer: 59.3% sunny (low)

Electrical rate: $.122/kWh (low now, would have been average 3 years ago)

So, Lexington has sort of a step ladder. If the wall is 10’ high, it’s tough to get near the top. But, it still may be worthwhile for Kentuckians to embrace solar air conditioning. We’ll explain why momentarily.

Example 2: Palm Springs, CA

Need for air conditioning: 1,500 hours/year (quite high)

Available sun in the summer: 83.7% sunny (very high)

Electrical rate: $.298/kWh (extremely high)

Palm Springs is well on the way to getting over the wall just based on the electricity savings. And, the neighboring Inland Empire and most of the San Joaquin valley are similar.

Example 3: Miami, FL

Need for air conditioning: 2,600 (the highest)

Available sun in the summer: 35.3% sunny (very low in the summer, but, since it’s basically always summer there, it’s wise to look at the other months. Those tell a rosier story, averaging above 60%. So, this number is probably closer to the truth for the region.)

Electrical rate: $.149/kWh (average)

So, the ladder has one monster rung and a couple of average ones to contribute to getting over the wall

The hard-dollar cost justification

Now, to get the full climb out of this ladder analogy, we need to actually know how these rungs aggregate to annual savings so we can have these figures contribute to a payback period or a discounted cashflow or an internal rate of return or your internal hunch machine to see if you think it’s worth it. The nitty gritty math is shown below, but feel free to cheat at this point (by telling yourself you’ve done enough in life to afford yourself this option, you deserve a break today, or whatever else you need to do to justify your slackerness) and go to our calculator here which will show you savings of adding a new solar air conditioner to operate in tandem with your current unit. Be sure to click the solar option at the bottom of this calculator; else, you’ll just be seeing the savings of adding a mini split (which is an interesting study, too).

Definitions for formulae

BTU: British Thermal Units, a rating of an air conditioner’s ability to provide cooling. 1 ton of air conditioning is 12,000 BTU in one hour (12,000 BTU/h). Most home units are from .75 to 5 tons, or 9,000 to 60,000 BTU/h. This value will be published in the specifications for the unit or can usually be discerned from the model or serial number.

SEER (or SEER2): Seasonal Energy Efficiency Ratio (units BTU/(W·h), or, more simply stated BTU/(Wh)). How many watts does it take to produce a BTU of cooling for an hour? It depends both on the efficiency of your unit and the outside air temperature. And, since that efficiency varies based on the outdoor air temperature, SEER is tested at a variety of outdoor temperatures in an effort to simulate the whole summer cooling season. Before, the resistance of running air through a duct was not taken into account, so some complained that the test wasn’t real world enough. In that vein SEER2 was created and this duct resistance was added. Since mini splits have no duct (after all, they’re called ‘ductless’), SEER and SEER2 values should be very similar, but aren’t necessarily the same, since the testing temperatures and procedures for SEER2 are slightly different than for SEER. Find the rating for your unit within the product literature, on a (potentially faded) yellow sticker on the unit, or research this value from the serial number on the unit. And, we care about this number no only in the analysis of your current unit, but also in the analysis of the solar unit, since the solar unit is a hybrid: it can run on grid power when it’s cloudy or nighttime.

Cooling hours/year: As a baseline, use the map above for your area. We’ll adjust this to your particular circumstances shortly.

Step 1: Learn your annual projected spending on your current air conditioner.

Formula 1:

(BTU rating/SEER value) · cooling hours your unit runs/year = Watts-hours of cooling energy used per year (Wh/year)

Formula 2:

kWh/year = Wh/year/1,000 (since there’s 1 kWh in 1,000 Wh)

Formula 3:

Approximate $/year you spend on cooling = kWh/year · your utility’s rate per kWh ($/kWh)

Example

Let’s say you have a 15-year-old air conditioner (which may be a heat pump, but for justifications purposes at this stage, we’re going to just look at cooling…heating savings will be icing on the cake) in Las Vegas. And, let’s assume…

BTU rating: 48,000

SEER rating: 13

Annual cooling hours (from the above map): 1,500

Utility rate (from the above map): $.165/kWh

Then, using the formulae above…

Formula 1: 48,000 BTU/hr / (13 BTU/Wh) · 1,600 h = 5,907,692 Wh/year

Formula 2: 5,907,692 Wh · (1 kWh/1,000 Wh) = 5,908 kWh/year

Formula 3: 5,908 kWh/year · $.165/kWh = $974.82/year

Step 2: Learn the savings just from adding a mini-split.

A mini split, even if it’s not a hybrid solar mini split, will do wonders to save you cooling costs in most cases. Why? First, most are considerably higher in SEER value than the vast majority of whole-house air conditioners or heat pumps today. A 5-year old main/whole-house unit has a likely SEER value of 14. Sure, you may have opted to pay a goodly premium to get a more efficient unit back then, but the Department of Energy required 14 SEER in the Southwestern U.S., and, by Jiminy, that’s what 95+% of units installed were 5 years ago, same way as almost all units from before then offered an even lower efficiency (to meet the minimum requirements of the DOE). So, let’s say you had the 4-ton unit above, and now added a 1-ton mini split with 22 SEER2 (and, we’ll need to go with SEER2 being a surrogate for SEER value so we can make this comparison). Now, assuming your needs for cooling haven’t increased, adding this new unit will give you 5 tons of cooling instead of 4 tons (since 12,000 BTU/hr = 1 ton), but the main/older/less-efficient unit won’t need to run as often or as hard to create the same amount of cooling. In fact, we can conservatively assume that it need only run 4/5 of the time, since it’s now only 4/5 of the cooling capacity. And, fun-and-profitable fact: for every 1 degree you can increase the thermostat temperature of your main unit (that is, turn it 1 degree warmer so it delays a bit before it comes on), you save around 2.5% of your cooling cost. So, we’ll do the same calculator we did above, but for a mini split, and then we’ll subtract off the savings as outlined above. We’ll adjust this standard (but high-efficiency) mini split to also be able to run using solar, too, in the next step.

Furthering the example by adding a mini-split

Mini-split BTU rating: 12,000

Mini-split SEER rating: 22

So, for this mini-split…

Formula 1: 12,000 BTU/hr / 22 BTU/Wh) · 1,600 h = 872,727 Wh/year

Formula 2: 872,727 Wh · (1 kWh/1,000 Wh) = 873 kWh/year

Formula 3: 873 kWh/year · $.165/kWh = $144.00/year

And, we’re assuming that this new mini-split unit runs whenever there’s a cooling load. Are you comfortable turning the thermostat of your main unit up 5 degrees to save some money now that you have this mini-split? You may be, assuming that you install the mini-split in the room where you spend the most time (e.g., bedroom, home office, TV room). Let’s assume you’re good with that. Then, there’s a new formula to show your adjusted lower cost after the mini-split is installed.

As such, from above…

Formula 4:

Total cooling cost after adding a mini-split = New (lower) whole-house unit cooling cost + mini-split cooling cost

= Previous cooling cost · (whole-house unit BTU rating/(whole-house unit BTU rating + mini-split BTU rating) · (1- (thermostat setpoint increase · .025) + mini-split cooling cost

= $974.82 · (48,000 BTU/(48,000 BTU + 12,000 BTU) · (1 – 5 · .025) + $144.00

= $974.82 · (4/5) · .875 + $144

= $682.37 + $144

= $826.37

Conclusion: There’s a $974.82 - $826.37 = $148.45/year savings for adding the mini split with these figures here in Las Vegas. In Miami, where cooling hours are around twice as high, or in Palm Springs, where the cost/kWh is twice as high, or with a larger house with 2 4-ton units, the savings would just about double. And, of course, if you can ever turn off your main unit, or turn the thermostat on the main unit up even higher, the savings substantially increase.

Now, onto adding solar…

For solar, you need to know what percentage of the days where there’s a need for cooling are sunny days, and you need to estimate what percentage of the time you’re needing air conditioning during the day when it’s sunny, since the intersection of these two times will be when you’re running the new mini split on solar. So, let’s assume we’re taking the mini-split from above, but giving a magical power to have plug-in solar power so it runs on solar during the day, and at 22 SEER2 at nighttime Oh, and this magic is now possible! Let’s assume that the unit’s in Las Vegas still. Here, statistically speaking, days that need air conditioning around the 84.5% sunny. And, let’s assume we run the unit 65% during daytime hours (roughly from 8am to 4pm) when it can run on solar, and 35% at nighttime, or when it’s getting dark.

Formula 5:

Solar-enabled mini-split cooling cost = previous mini-split cooling cost · (1 – (% daytime runtime · % sunny during these daytime hours) = $144 · (1 – (.65 · .845) = $144 · .451 = $64.94.

So, the solar unit can run for $64.94/year for cooling, and now the overall savings is…

= $682.37 (for the main unit) + 64.94 (for the solar hybrid unit)

= $747.31 to run both the main unit and the solar-enabled (solar-hybrid) mini-split.

So, the overall savings is the old cost of cooling the home before the unit minus the new cost (now running a good chunk of the day using solar), so that’s…

$974.82 - $747.31 = $227.51.

So, in Las Vegas for this user, the hard-dollar savings is $227.51/year vs. doing nothing and continuing to run the existing unit. But, we don’t know what the unit costs, and we haven’t taken in your assigned values for the soft cost justifier. Those will help, too. First, what does a unit cost…

What’s the approximate cost to get and install a 1-ton solar hybrid heat pump with solar panels?

For the unit itself, let’s select this unit from Airspool, since it includes everything needed to do it yourself, including quick-connect line set and preinstalled electrical and communications wires. Plus, the solar wire and DC disconnect are included.

Airspool’s Quick ‘n’ Easy: $1,845

And, panels can be found for $.50/watt these days. This may go up, and it may go down, but, for instance, in 2010, the cost was around $2.50/watt, so overall, the trend is your friend. There are online sources (e.g., altestore.com; a1solarstore.com), but we’d recommend stopping by (with a truck or van) your nearest Greentech Renewables (greentechrenewables.com) to get everything you need. They’ll walk you through the mounting hardware for your type of roof. Shoot for +/- 1,500 watts to run the 1-ton unit. The power required is normally under 1,000 watts, but you’ll need a bit more, since the panels will only produce the full 1,500 watts under ideal conditions. So, 1,500 watts x ~$.50/watt = ~$750. We’ll use this figure in the analysis. And, another +/-$200 for the racking to hold the panels…

Solar panels and racking: $750 + $200 = $950

For the panel installation, you can expect to pay around $600 for 4 panels around 370 watts or 3 panels around 500 watts…

Solar panel installation: $600

So, the total is…$1,450 (Airspool solar-hybrid DIY heat pump) + $950 panels/racking + $600 installation = $3,000.

The Inflation Reduction Act

The dubiously-named but wonderful Inflation Reduction Act gives an Investment Tax Credit of 30% on Energy Star-approved heat pumps (and, Airspool’s 12k BTU unit qualifies) and 30% on solar items. All installation labor and balance-of-system goodies (e.g., wires, racking, etc.) also get this 30%. So, after the IRA, the $3000 becomes…

$3000 · .7 = $2,100

So, what’s the payback period for this sample one in Las Vegas?

Payback period: $2,100 Day 1 cost / $227.51 (annual savings) = 9.23 years. Note: Day 1 cost = the total up-front cost of getting the system installed, after the Inflation Reduction Act credit. (There may be other heat pump and/or solar rebates in your area, too, so check!)

Net Present Value (NPV) and Internal Rate of Return with discount rate of 7.5% based on the $2,100 initial investment and 10 years of $227.51 electricity savings: -$538.35 and -6%.

Enticing? Maybe not yet. We have a pretty steep discount rate, and we’re only allowing 10 years of electrical savings when you’ll likely have much a much longer run with the set, but, hey, it should be worthwhile, right? So, let’s look at some other things which may be more important in the analysis to you personally which will help things. For these, you’ll need to assign a value based on your perception of the situation for each.

Soft/Subjective Justifiers

We’ll call these the ‘What’s it worth to you?’ factors. Some of these may have little value to you, and some may be priceless (but, you’ll still be assigning a price). To keep these simple, instead of annualizing them, we’ll have you assign a value based on having these features from here to eternity, as long as your system is running. And, the projected life cycle of most heat pumps is 15+ years, and most solar panels are expected to still deliver over 80% of their original power after 25 years. Note quite eternity, but, yes, assume you’ll have this system working many years into the future.

What’s it worth?

You have a room that’s uncomfortable, so you need an air conditioner. You would have needed to spend money on that anyway. How much would you have spent, approximately?
You go to work, and you don’t need to turn off the air conditioning, since it’s running for free. Leaving for a month and want to keep everything in the house (such as plants, dry goods, old photos, etc.) at a reasonable temperature? No problem to do this guilt-free and dollars-out-pocket free.
In fact, many units let you schedule the on/off run times, adjust the setpoint temperature remotely, and see your saving with solar from anywhere via an app. Assuming the unit you’re viewing has this type of app and capability, what’s that worth?
Unlike normal grid-tied solar, which, for safety reasons, can’t remain functional when the power’s out, solar hybrid units will keep running during the day for heating or cooling. What’s that worth?
Speaking of heating, these units heat! And, they heat using solar. Days are shorter in the winter, and cloudier in many areas, but if you’re in a sunnier area, you’ll have free heat for a few hours a day, and if it’s not sunny, you’ll have the efficiency of a heat pump, which is likely less expensive per BTU than either your old heat pump or your old fossil fuel-burning furnace. What’s it worth to have another heater in another location which is, in most cases around 2 to 3 times more efficient than baseboard electric heating, and around 25% more efficient than most heat pumps in service today. And, it should be at or near the cost of burning natural gas, especially with recent increases in gas prices. So, what’s it worth to have a new 1-ton super-efficient heater?
Speaking of increases, what’s it worth to you to now be able to worry less about the cost of natural gas or electricity for heating, and electricity for air conditioning, since this unit is hybrid, so will be running off of solar much of the time, and off less electricity per BTU the rest of the time, so you won’t be affected much by their silly rate increases?
And, don’t you want to stick it to the man? Now, you’re in control of your electricity bills to a greater extent with a power plant on your roof for a good portion of your air conditioning costs and even a bit of your heating cost.
An additional unit gives you a backup to your main unit, and let’s face it, that unit’s not getting any newer. What’s it worth to have a unit that will keep running if the older one dies?
Like buying filters every other month for your existing whole-house heat pump or air conditioner? These units come with washable filters which are both better for the environment and less money and hassle for you. What’s the worth to you over the next 15+ years?
In many cases, 1-ton hybrid mini-splits have 110 – 120v plug-in alternating current, so you don’t need to pull a new breaker. What’s this worth to you?
If you live in a warm climate, air conditioning is probably the largest driver of your electricity bills on an annual basis. What’s it worth to you to know that you’re addressing this without the accompanying drama and greatly-increased cost of a whole-house system?
This is a niche one, but it may apply to you: you have an RV, and you use it 15 days a year, but it’s in the sun the other 350 days a year. What’s it worth to be able to cool (and heat) it for free?
Another niche one: you live off grid, and your current solar/controller/inverter/battery array isn’t really cutting it for ‘luxuries’ like air conditioning. What’s it worth to you to be able to run the unit by simply plugging solar panels directly into the outdoor unit?
You’re not really an altruist, possibly, but if this global warming stuff is for real, you’ll be doing your part to lower carbon emissions. What’s that worth to you?
And, what besides bragging rights for having the first solar-powered air conditioning system in your neighborhood is of additional value to you? Write it down and come up with a value.

So, sum these up, and subtract them from the previous $2,100 Day 1 cost. Heck, if you need another unit, you need another unit, and that first subjective evaluator above could whittle away at much of this $2,100. Let’s assume that the valuation for the above items comes out to $1,500. Then…

Day 1 cost before: $2,100

Day 1 cost after: $2,100 - $1,500 = $600.

Okay, so is it worth it to get a solar-powered hybrid heat pump? We’re getting closer, and now we’ll apply the annual electric savings.

Day 1 cost: $600

Annual electric savings (from our previous analysis): $227.51

Payback period: $600/$227.51 = 2.6 years

Discounted cash flow (assume an aggressive discount rate of 7.5% and a very-conservative 10-year life of everything…the rest will be gravy later): $961 (Anything over $0 is considered a worthwhile project.)

Internal rate of return using this same discount rate and cashflow stream: 27% (Anything over 0% is considered a worthwhile project.)

So, for this Las Vegas example and for this user, the project is quite worthwhile. Situations vary. In some instances, a solar unit and accompanying panels may not be worthwhile to you even if you’re in a sunny area with high electric rates and lots of heat (e.g., you already have a mini split installed in your San Bernardino guest bedroom, and you don’t have that many guests). Or it may be very worthwhile to you even if you’re in a cloudy area with low rates and not much heat (e.g., you live in Seattle, and don’t have any air conditioner installed yet, and you need one, since it seems to truly be getting warmer up there). And, if one of these systems is not viable for you now, stay tuned because your situation may change, and the cost of these systems certainly will change (for the better) as they become even more affordable.