Costs and Benefits of Renewable Energy Systems

According to the Department of Energy, in the United States, heating and cooling of buildings is one of the largest contributors to global warming, accounting for 56% of energy use and greenhouse gas emissions. It is also the largest monthly expense for most homes.  As a homeowner, making energy efficient improvements to your home by insulating and air sealing and installing renewable energy systems will reduce your energy use and save you money, help the environment by reducing carbon emissions, and improve the comfort and indoor air quality of your home.

Understanding Life Cycle Costs

Many homeowners are turned off at the high up front costs of renewable energy systems. They don't take into account the lower operational costs, the projected increase in energy costs, and extended lifetimes when compared to the conventional systems. An important component of EEC's platinum LEED home will be reporting the energy monitoring and life cycle cost analysis of the integrated systems in the home through our energy monitoring page. Our goal is to demonstrate and educate the public on the cost and energy savings potential of these systems.

Incentives and Rebates

The recently passed American Recovery Act extended and expanded federal incentives for residential renewable energy systems. Homeowners can now receive up to 30% of the cost of renewable energy systems including geothermal heat pumps, solar hot water, small residential wind, and solar pv. Any cap on incentives has now been removed. In addition, the amount of incentives for energy efficiency improvements, including air sealing and insulation, have been raised to $1500.

The cost for renewable systems and integrated systems is unique to each home and depends on the sizing of the systems, roof angle, and climate. However, In most cases, the monthly utility cost savings from energy efficiency improvements and systems are greater than the monthly cost of the systems, when incorporated as part of a mortgage or loan. An example of the costs and resulting monthly cash flow for various types of renewable energy systems, including integrated systems, is shown below. These are based on a leaky 2500 SF home with an average utility bill of $325 a month and take into account all parts and labor and federal incentives. Additional local rebates have been included for solar PV. An energy audit, air sealing, and insulating a home is the most cost effective improvement a homeowner can make and should be the first step toward installation of renewable energy. For an extended list, visit our pricing page

UTILITY BILL $325 Installed Cost Net Cost
with Tax
Estimated Monthly
at 8% in Mortgage
Cash flow
Air Sealing/ Insulation $3,750 $3,000
5 ton W-W GHP
5 ton integrated W-W GHP, SHW, Radiant Heat/Cool
6 ton W-A GHP

Stand alone SHW
6 KW Solar PV

1.7 KW Wind Turbine
Tankless Hot Water

GHP: Geothermal Heat Pump
W-W: water-to-water
W-A: water-to-air
SHW: Solar Hot Water

Below are links to more information on federal tax incentives and the American Recovery Reinvestment Act.
Department of Energy (DOE)
Database of State Incentives for Renewable Energy
Energy Star Federal Tax Incentives

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