The Lowdown on Solar Thermal Savings
As with a solar electric system, a solar thermal system will certainly save you money, but the amount of money saved is dependent on several factors. These include how your solar thermal system will be used, the size and type of system, local climate, and the system rating. As always, be sure to explore state and federal rebates and tax incentives for solar thermal installation. These ever-increasing incentives can cut your initial costs significantly and have you saving money quickly.
Typically, solar thermal systems cost between $2,000 and $4,500 to purchase and have installed, which is usually more expensive than a conventional gas or electric system. That is why it is so important to study the long-term savings involved with solar thermal heating.
Solar thermal systems can feasibly replace up to 80% of your energy needs for heating. For a family of four, a solar thermal system can save up to $300 per year — that is a savings of about 25 dollars per month. For $4,500 system, that would be a 15-year payback. But this is ignoring tax incentives and rebates which can significantly reduce initial costs and significantly increase your savings.
If you are building new, then you may be able to include a solar thermal system in your mortgage, which will decrease monthly payments for the system. According to the DOE, a mortgage-embedded solar thermal system will usually amount to $13 and $20 per month. And the federal income tax deduction amounts to roughly $3-5 per month. Therefore, at a savings of $25/month and a cost of only $15/month, the system becomes profitable immediately.
Posted on May 28th in Solar Information by Dan.
June 5th, 2008 at 12:13 pm
Where on earth did you get your numbers on the pricing for solar equipment and installation ( $2000.00 to $4500.)? That is absolutely absurd !Please do a little more research before you put your fingers on a keyboard.
June 5th, 2008 at 4:45 pm
I’ve seen numbers similar to those that I gave in various places. If you click on the two links embedded in the article itself, one of them from the US Department of Energy, you will find a few examples. There are many variables that factor into the cost of a solar energy system. But I think you may be confusing solar electric prices with that of solar thermal. Solar thermal hot water systems are considerably cheaper than solar electric systems, which can reach over $30,000 depending on the size of the system. Compared to conventional systems, solar thermal itself is expensive, but the payback can be very fast which is why it is such a cost effective way to go solar.
February 11th, 2009 at 8:56 pm
Yeah that $4,500 number gets old. You might be able to do that in climates where it doesn’t freeze (ie the South, Phoenix, AZ, parts of CA). But once you start to deal with freezing conditions you are up to $7,500, and to install a system that will actually meet the load of a family of four you are looking at closer to $10,000. I do this for a living and those are actual prices.
Folks who continue to use the lowball figures help to keep solar thermal down because customers get the idea that $4,500 is fair, but no one will do the work for that price because they would lose money. But the customer feels cheated.
Maybe it helps to realize that the parts alone for the smallest system cost over $4,000?
February 12th, 2009 at 3:30 pm
Tom,
While I don’t intend to lowball anyone, it’s true that we tend to focus on price ranges which are applicable to sunnier climates. Therefore your information is much appreciated. Nonetheless the tax credits and other incentives still stand, even if the numbers are higher. And for homeowners in areas with long bouts of freezing temperatures, perhaps geothermal heat pumps would be a better use of renewable energy–a technology which the federal renewable energy tax credits now include.
Thanks again for writing in!
April 26th, 2009 at 8:06 am
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