Solar Thermal ROI Calculator

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Solar Thermal ROI Calculator

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2022-08

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8th Fire Solar Company is owned and operated by the Anishinaabe people. Their office and manufacturing facility are near Pine Point, Minnesota. Honor the Earth, the parent company of 8th Fire, is a non-profit organization aimed at promoting awareness of environmental issues that affect Native Americans. The organization also focuses on the socioeconomic development of tribal communities. 8th Fire sees socioeconomic development as the main driver behind installing their solar thermal panels in tribal communities and training tribal members on their installation and maintenance to promote energy self-sufficiency. 8th Fire partnered with the Rural Renewable Energy Alliance (RREAL) in 2017 to start manufacturing their solar thermal panels for domestic and commercial use (Akiing, 2022). The goal of creating this partnership was to target tribal members as customers and promote solar thermal as a self-sufficient means of home heating. 8th Fire conducts seminars for interested parties, and trainings to educate new installers on their systems. The 8th Fire team is small, and therefore their sales strategy is to locate and educate individuals on their system to know how it works, understand how to maintain it, and even help provide them a business opportunity as well by signing them on as dealers for the company. The need for such a heating system like solar thermal is great in rural reservation land. The potential for solar, wind, and other renewable sources of energy is high on such lands. However, insufficient transmission lines and disproportionately high costs of electricity are only a few reasons why “energy security is a major concern in many Native American communities” (US DOE Office of Indian Energy, 2017). 8th Fire notes that solar thermal is an “efficient and clean supplement to the fuel oil or liquid propane” that is common with reservation homes (8th Fire brochure, 2019). Depending on geography and seasonal variance, the expected heating load for a solar thermal system can be a secondary heat source or more than meet the heating needs of a building. The question is not whether the system can heat an area. Rather, it is if the energy costs saved from reducing conventional heating outweighs the cost of installation. Therein lies 8th Fire’s need of convincing prospective customers there is a positive return-on-investment for their technology. 8th Fire conducts site assessments on prospective buildings. They make sure there is a south-facing wall with suitable solar exposure that is ready for a panel to be installed. Using a tool called a Pathfinder, they measure the “potential solar resources” available to determine if a thermal system will produce enough heat to warm the desired space. 8th Fire has conducted many assessments but have desired a tool 4 that would give a “snapshot” of when a customer could expect to see a positive return on investment (ROI) from installation. 8th Fire had a spreadsheet tool in place that gave an estimated “payback period” of when a customer would recoup costs of installation from net energy savings. However, there was concern that this tool was not user-friendly for a panel dealer in the field or a customer to draw key insights relating to energy and cost savings versus conventional energy. The student was tasked in making a tool that provided a visualization of savings and could be easy to input customer data relevant to savings calculations. The main issue with the project included data collection of current customer systems that would provide benchmark performance numbers. Customer data from RREAL was not readily available for reference. Therefore, the main metrics from the tool ended up being costs savings on energy bills and the potential heating output of a prospective array. The student reviewed ROI tools and metrics used in other scenarios, primarily metrics in healthcare to measure effectiveness of care, and a consult with another solar company to gauge their ROI methodology. These will be briefly discussed to give context of other considerations taken when implementing new interventions. The project that came to fruition was a data entry survey form for customers and/or prospective dealers that would generate a visual of savings from an array. It will be discussed how this was the main improvement that was made to the existing spreadsheet.

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Center for Urban and Regional Affairs, NW Regional Sustainable Development Partnership, Akiing/8th Fire Solar

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Mathy, Tanner. (2022). Solar Thermal ROI Calculator. Retrieved from the University Digital Conservancy, https://hdl.handle.net/11299/257424.

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