With today’s available tax credits, this is a good time to install renewable energy upgrades, such as a solar power system, solar water heater, wind energy system (turbine) or geothermal heat pump. Through 2016, homeowners can take advantage of tax credits for residential systems. Additionally, your state or town may have other incentives and tax exemptions. And some banks currently provide loans for solar projects with $0 down.
To receive federal tax credits, taxpayers may claim up to 30% of the cost for qualified solar power and wind energy systems. The credits generally apply to dwellings located in the United States that are owned and occupied by the taxpayer, including second homes. The installation requirements and allowable credits vary by technology and by your specific tax situation. For example, some systems require certification by a qualified company endorsed by the state governing body. So be sure you do adequate research and planning, and hire qualified contractors to do the installation.
What is solar energy?
Simply put, solar energy comes from the sun. Sun radiation is absorbed by solar panels. Solar cells within the solar panel produce electricity that the solar system transmits throughout your home, just like standard electricity. Solar power is generated when the solar panels are actively receiving sun radiation.
What are the pros of installing solar and wind energy systems?
Solar and wind energy technology is improving as prices fall and these systems use renewable energy rather than fossil fuels, reduce energy consumption costs, are quiet and easy to maintain and can supply power in out-of-the-way places (such as the mountains).
What are the cons of installing solar and wind energy systems?
Renewable energy systems are expensive to install, provide inconsistent power supply (solar power isn’t generated at night and wind power isn’t generated without wind), require a secondary storage system such as a battery in order to use generated power later and are better for some locations (sunny climates) than others (cloudy locations or areas with high pollution).
How much can you expect to spend on renewable energy systems?
The cost of various renewable energy systems can vary from a few thousand to tens of thousands of dollars. A solar water heater will cost less than a solar home heating system. The cost of a home heating system will vary depending on your location, the size of your home, the type of system and whether you desire to provide all your energy needs, or merely reduce your dependency on the municipal system and fossil fuels. Wind and solar systems generally provide peak power at different times of the day and night, therefore, a hybrid solar-wind power system is another consideration.
How much can you expect to save on energy bills?
It’s difficult to generalize solar energy savings. A lot depends on electricity rates in your area, your energy use, and the type of system you install. Reports from homeowners claim energy bill reductions between 50% and 90% over what they were before solar power was installed.
The amount of savings can be further increased if you can connect to the regional power grid and sell your excess power back to the local company. In addition, a home with a solar power system installed generally sells faster and at a better price than a home without solar energy options.
What are the steps to planning a solar power system?
- Add up your current electricity costs and kilowatt hours used.
- Reduce or optimize your current energy use—energy conservation is the best first step to improving your energy costs.
- Learn state and local regulations. Check with a local renewable energy company, your state energy and municipal offices, or other local governing body, for regulations on allowable energy systems, building codes and ordinances, easements and covenants and technology requirements. A good starting point is the Database of State Incentives for Renewables & Efficiency (DSIRE).
- Determine the amount you can afford to spend.
- Determine the system to install based on your budget and other factors, such as how long you plan to live in your current home. It may be more cost effective to lease panels than to buy them.
- Get a quote — three different quotes if possible — for the solar installation you have chosen.
- Estimate your solar electricity costs once the new system is installed and running.
- Subtract your solar electricity costs from your current electricity costs to determine your energy cost savings.
- Estimate the time it will take to pay for the installation after tax credits and energy cost savings.
Similar steps can be taken to determine the feasibility of a solar water heater, wind energy system or geothermal heat pump.