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Economics of Solar Hot Water

There is a 30% federal tax credit up to $2000 for installing a residential solar hot water system through 2016.
Commerical systems also receive the 30% Investment Tax Credit (ITC) and are eligible for accelerated depreciation as well which adds to the savings.

California has passed a statewide solar water heating rebate program that has a pilot program in San Diego. Rebates are up to $1500 for residential applications and even more for commercial installations. Statewide implementation is possible in 2009 depending on the outcome of the San Diego pilot program.

Sacramento and Palo Alto have rebate programs and Berkeley will soon have a subsidy program as well.

When you invest in a solar water heater you are increasing the value of your home. According to The Appraisal Journal, home value increases by $20 for every $1 reduction in annual utility bills.  So a solar energy system that saves $200 per year would add $4,000 to the value of the home.

Natural gas expenses have continued to rise over the years. California imports over 85% of the natural gas used in the state and over 50% of this natural gas is used to generate the state’s electricity. Even when prices dip at times they historicaly rebound and continue to go up in price. By using the sun as a free source of energy to replace natural gas you are insulated from these rising prices.

Solar water heating can bring an excellent return on investment compared to other investment strategies. What other residential or commecrical improvement more than pays for itself over time?