Costs of Solar Hot Water
A basic, 3 person, solar hot water heating system will cost around $7500 installed.
However, there is currently a 30% Federal tax rebate and numerous state incentives that bring this cost down substantially. Massachusetts, for example, has a sales tax exemption as well as an additional 15% state income tax credit (capped at $1,000). So in Massachusetts, your system will cost you “out of pocket” about $4250 with no sales tax. Other states offer even more incentives.
After the state and federal government help you pay for your Solar hot water system, you will have made the best possible alternative energy investment possible- no other “green” investment is even close.
By way of comparison, a roof top mounted photovoltaic (PV) system to provide electricity for your home will cost around $20,000 and take at least twice as long to pay for itself even after all the federal and tax rebates.
The life of your solar hot water system is 20 to 30 years.
By comparison, if you have a high quality oil or gas fired hot water heater or furnace, its life is probably 15 years. The collectors are guaranteed for 10 years and the rest of the system is guaranteed for 3 years.
Few other investments will ever ‘pay for themselves’.
If you buy a new refrigerator, air conditioner or even a car do you expect it to ‘pay for itself’? Of course not- they’re investments. With a solar hot water system though, you know beforehand that the money saved will cover the expense of the installation, after which the money saved is money that stays in your bank account instead of going to your utility. Here’s how a domestic Solar hot water system installed in Massachusetts will pay for itself assuming a very modest $50/month savings (most installations will save much more).
What your system will cost and how it will pay for itself
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Cost to install system |
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Net cost of system |
$4250
$500 |
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Return on investment ($500/$4250) |
12% (tax free) |
This assumes that your existing oil, gas, or electric costs would not increase and the savings would be fixed at $42/month.
Of course, energy costs will continue to increase, increasing the savings generated by your Solar hot water system and decreasing the payback period. Solar heating systems will insulate you from rising fossil fuel costs and protect you from fuel-price inflation over time. Investing in a solar thermal system could also increase the resale value of your home. At resale, the entire initial cost of the system can be recovered when you sell your property.
Beyond the generous rebates that are available, there are 0% financing options for renewable energy systems such as solar hot water. NESHW offers 180 day, no interest, no payment, 'same as cash' financing. This means that our customers need not be 'out of pocket' for the system cost until they redeem their tax credits. We are the only solar hot water installer to offer this financing