July 2006 | Co-op America’s Living Green
How Much Does Solar Really Save?
Dear Co-op America, Is it worth it to replace my conventional water heater with a solar water heater?
—Jane, Seattle, WA
No matter where you live or what your climate, solar water heaters can be a great way to save energy, save money and reduce your household’s greenhouse gas emissions—even in rainy Seattle—making them a very worthwhile investment.
A solar water heater generally costs between $2,000 and $6,000—but it begins paying for itself immediately with reduced energy bills. The amount you save will depend on many factors, including how much hot water you use, your system’s performance, sunlight in your area and the local cost of conventional fuels, but the US Department of Energy estimates that on average, your energy bill should decrease by between 50 and 80 percent. At that rate, your water heater will pay for itself in about three to five years.
There are tax incentives that make the cost of a solar water heater even cheaper. For any solar water heater placed in service between now and the end of 2007, you can receive a federal tax credit for 30 percent of the system’s cost, with a maximum credit of $2,000. Note that to claim the credit, your system must be certified by the Solar Rating Certification Corporation (solar-rating.org). To find additional state-level tax incentives, visit the Database of State Incentives for Renewable Energy at dsireusa.org.
To learn about the different types of solar water heaters available, start with our article, “Try a Solar Water Heater.”
If your conventional hot water heater is still working, you might want to consider keeping it as a backup.
Living Green is brought to you by Co-op America, a national nonprofit that provides green living, purchasing and investing tips and resources. To join and get a free copy of the National Green Pages™ directory of green businesses, call 800.58.GREEN, visit coopamerica.org . E-mail Living Green questions.
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