This subject is much on my mind lately. Our house in Billings, MT
doesn’t have natural gas, so hot water is a big hit on the electric
bill. A recent report of the economics of solar hot water systems in New
York state says that the average payback in a similar climate is over
$2000 over the life of the system. In other words, if you’re heating
water with electricity (stupid, I know), you pay for the solar hot water
investment and then wind up a few thousand bucks ahead over the life of
the system, on average.
So far so good. But the upfront
investment is $9k – $15k. Gasp. Cough. If I take out a loan, that cuts
into my profit. If I invest $10k at 4%, compounded annually for 20
years, I wind up with more than $21k. Not looking like the greatest
investment yet. But wait, there are tax credits! The Emergency Economic
Stabilization Act of 2008 extended the 30% commercial solar investment
tax credit through 2017, and extended it to residential installations.
As
of January 1, 2009, buying a residential solar electric system gets you
a tax credit equal to 30% of the cost, including installation. Let’s
say that brings my overall cost down to $6k. Throw in a little increased
property value and the general happiness associated with having solar
hot water (worth a lot to me, anyway). The whole thing is looking
better.
But is this enough to convince the average homeowner?
Remember, I’m getting more benefit because I don’t have a natural gas
water heater. Solar intensity at my northern latitude probably doesn’t
get me the same benefit as someone in, say, Arizona, but I don’t have
numbers on that comparison yet.
All this is a pretty good argument for Property Assessed
Clean Energy – a program that lets homeowners buy residential renewable
energy systems via a lien against the property and pay for them out of
the savings on utility bills. No out-of-pocket, no lost investment
opportunities. Energy savings, installation jobs, manufacturing jobs,
increased property values … win, win, win, win. We need legislation in
place pronto.
This post was originally published on the Clean Energy Ambassadors site.