You are here

#AskEnergySaver: Renewable Energy

August 28, 2014 - 2:17pm


If you've completed energy efficiency improvements and you're still looking for ways to save energy at home, it might be time to explore renewable energy options. That's why this month our energy efficiency expert is answering your renewable energy questions. | Photo courtesy of Brothers Electric.

If you've completed energy efficiency improvements and you're still looking for ways to save energy at home, it might be time to explore renewable energy options. That's why this month our energy efficiency expert is answering your renewable energy questions. | Photo courtesy of Brothers Electric.

To help you save money by saving energy, we launched #AskEnergySaver -- an online series that gives you access to some of the Energy Department’s home energy efficiency experts. During 2014, experts from the Department and our National Labs will be answering your energy-saving questions and sharing their advice on ways to improve your home’s comfort.

For homeowners who are just starting to look for ways to save money by saving energy, it’s essential to start with the low-hanging fruit such as performing energy audits, installing programmable thermostats and sealing air leaks. But if you are one of the many homeowners who have already taken the first steps to lowering your energy bills and you’re looking for ways to do more, it might be time to explore renewable energy options for your home. That’s why this month, we asked you to share your renewable energy questions.

To answer them, we reached out to Sarah Widder, a research engineer at the Energy Department’s Pacific Northwest National Lab who focuses on improving the energy efficiency of our nation’s buildings. Widder also contributes to research at PNNL’s Lab Homes -- a project designed to evaluate how new building technologies work and calculate their energy savings for the typical American family.

What's the average payback of home thermal solar projects vs. photovoltaic solar? Why isn't thermal solar mentioned more?
-- from @Robyn_brooks_ on Twitter

Sarah Widder: Before comparing the costs of solar thermal and photovoltaic (PV) systems, it’s important to understand the differences between the systems.

Solar thermal systems (sometimes called solar water heaters) use the sun to heat water for domestic hot water use -- and potentially space heating if you have a heating system that uses water, like radiant slab or radiators. These systems are typically 50-75 percent efficient and cannot feed any excess solar thermal energy collected back to the electric grid. That means that in some cases, the systems can produce more energy than a household can use, reducing the system’s efficiency further.

Conversely, PV panels convert the sun’s energy to electricity at an efficiency of approximately 15 percent and can be used to directly power any application in your home that uses electricity, including heat pumps for space heating, water heaters, appliances, lighting and other miscellaneous electrical loads. Plus, with some utilities, homeowners can sell the excess energy back to the grid, helping to contribute to even lower energy bills.

Because of these differences, it can be hard to compare solar thermal and PV systems. In addition, the costs of both solar thermal and PV systems depend on a number of factors, such as the solar resource available in your specific location, installation costs in your area, the size of the system you need, your local electricity prices and any available incentives.

Given all these elements -- plus factoring in the average electricity rate in the U.S. -- the typical payback period for a residential PV solar system is around 10 years. But keep in mind, your specific payback period could be different depending on the electricity rate you pay and whether your state offers tax credits or your power company offers a rebate for installing solar panels on your home. The National Renewable Energy Lab’s PVWatts tool can help you estimate the electricity production and associated payback for a given solar PV system.

While solar thermal systems typically cost less up front to install than PV systems, their payback period is similar to PV systems because there are fewer incentives and tax credits for solar thermal. Depending on your home’s location, water use and energy costs, a solar thermal system’s payback is usually around 7-10 years. In some warmer locations where you can use lower-cost solar thermal systems -- such as integral collector storage (ICS), thermosyphon and direct forced-circulation systems -- installation costs are lower, translating into a shorter payback period.

In the end, your energy needs and the characteristics of your home will determine which type of solar system is the most cost effective for you.

Is leasing solar panels a good option?
-- from Anna Sotelo-Peryea on Facebook

SW: Leasing solar panels is becoming much more common in the United States and provides an easy, affordable way to offset some of your energy use without significant upfront expense. Many solar companies are offering solar PV systems to homeowners for no money down and a monthly payment that is typically less than or equal to the reduction in their utility bill. This removes one of the main hurdles to installing solar on residences: a lack of available financing. Other attractive attributes include less hassle since the solar company owns and maintains the panels and homeowners can start saving money right away since they don’t have to first payoff the investment in the solar panels.

With that said, buying solar PV systems outright is more cost-effective overall because it reduces the interest and opaque financing charges homeowners have to pay with a loan or lease. In addition, homeowners who purchase their solar panels can take full advantage of the 30 percent federal tax credit and any other rebates, tax credits or incentives available from their city, county, state or utility district.

Another issue to be aware of when considering leasing solar panels is how they may impact the resale value of your home. While a mechanism exists for transferring the lease -- and many solar leasing companies report transferring hundreds of leases -- in some cases the homebuyer might not want to assume the lease, which could complicate the sale.

Is there a solar system design out there for rental homeowners?
-- from @shwnsmonroe on Twitter

SW: While net-zero electricity is not really a possibility for most renters, there are several options for apartment-dwellers that can help reduce the use of grid-supplied electricity and lower utility bills. New plug-n-play panels can be plugged directly into a 120V socket. These systems can power appliances and electronics in your home or flow back to the grid just like more permanent solar panels, according to advertisements. Renters will still have to execute a net metering agreement with their utility to use the panels, and the panels are only large enough to offset a small portion of the average apartment’s electricity usage.

Another option to take advantage of solar power is to use one of the many small-scale solar chargers for phones and other electronics. Or, do-it-yourselfers can make a solar oven/dehydrator!

Is it true that most insurance companies will not insure if you have solar installed?
-- from Paisleyy via email

SW: Actually, the insurance coverage of homes with rooftop solar panels is often more about protecting the panels than the home. While it is possible that a specific home insurance provider may elect not to cover a home with rooftop solar panels installed, there are many insurance companies that offer policies to provide coverage for the home as well as the newly-installed solar panels. In addition, many insurance companies can include coverage in already existing home insurance policies.

However, homeowner insurance carriers vary in how they treat solar panels in terms of premium costs. Experience has shown that insurers may lower or leave rates unchanged for ground based installations because they do not present any added risk to the home itself and are treated as a separate out building like a shed or detached garage. For rooftop installations, the solar PV system will most likely be covered as an increase on your “coverage of a dwelling” value and would probably result in a commensurate increase in your property insurance rate of less than $10 a month.

Your insurance company will typically need the following detailed information to assess how your solar installation will affect your coverage and rates:

  • Type and number of panels to be installed
  • Where you’re building the project (backyard or rooftop)
  • The name of the installation contractor

It’s important to do your research and shop around when you’re looking to insure a solar panel system, as some companies may see it as adding value to your house and charge more, while some may actually offer a discount. Speak to your home insurance advisor for more information on what policies might be available for you.

In addition, to provide adequate protection for your new solar installation, make sure solar panels and associated equipment have warranties and are installed by a certified installer. There are two kinds of solar system warranties that are normally offered. The first one is the panel and inverter manufacturer warranty, which are usually 20-25 years on panels and 5-10 years on the inverters. The installers should also offer a warranty on the quality of their work, which means guaranteeing they made no holes in your roof likely to lead to leaks for a specified period -- typically from two to 10 years.

To learn more about incorporating renewable energy systems in your home, visit Energy Saver.