In the past decade, the use of alternative energy has increased thanks to the increasing popularity of renewable energy resources and tax incentives. If you’re considering a switch to solar energy, or if you’re building a new home, now is a great time to dig a little deeper into whether it can save you money on your home.
Picking the Right Alternative Energy Source
The most common type of alternative energy you’ll hear about is solar power. According to the Solar Energy Industries Association, solar is growing at a record pace as of 2018. Many people are more aware of it, simply because of its visibility. You likely see solar panels on homes, public buildings, or parking lots around you.
Solar works best for a home on a north facing hill or other spots with ample sunlight. To learn your home’s solar rating, visit Sun Number or find your home on Zillow. If you live in a less sunny spot, you might opt for small wind energy or geothermal energy. There are many other options but these provide tax incentives.
Installing Your Solar Power System
Another factor to consider when choosing an energy source is the installation. Typically installation represents the greatest cost. Check with the Board of Certified Energy Practitioners to find a qualified contractor. Learn what permits you need, as those may add to your costs.
For a complete photovoltaic array, the installation includes the solar panels, their support structures, an inverter, electrical conduit piping and disconnect switches. For a simpler set-up, you may choose a much smaller solar box that connects to your home’s electrical and plumbing systems. You can see why making these choices before construction of a new home may make sense over adding systems to an existing home.
Note that you can choose to buy your solar array or lease it.
Residential Renewable Energy Tax Credit
In 2016 some energy efficient tax credits expired. However, the Bipartisan Budget Act of 2018 brought them back. The bill expires in 2021.
However, if you act before then the bill allows you to apply for a maximum rebate of 30% off your cost of solar-electric property, solar water-heating, fuel cell property, small wind energy, and geothermal energy for the year 2018. This amount is reduced to 26% in 2019, and 22% in 2020.
Return On Your Investment
To understand your potential return, calculate installation and maintenance costs against energy savings and rebates.
According to Angi, you may end up with no utility bill at all, or pay only a convenience fee to the utility company. They add, “Depending on where you live, you can bank power credits that can be applied to your bill in the months your system isn’t keeping up with your usage.”
Alternative Energy LLC reports that homeowners in California, Arizona, and Florida typically see a return within five years. Most other states can expect to see a return in eight to 10 years. Solar panels last more than 15 years. That gives you five or more years of free operation.
In addition, if you own–rather than lease–your solar array, it may increase the value of your home.