Clean energy might just be our new favorite budgeting tool for 2024. With energy prices rising steadily, we’re always looking for a way to get ahead of these costs, and we’ve found a great opportunity in renewables!
Did you know that the cost of renewable energy has been decreasing over the last 15 years? This, paired with the way traditional energy costs have been rising by 2.36% annually for the last 25 years, makes choosing renewable energy a great option for your wallet. Another piece of good news—these clean energy sources do not contribute to the planet’s rising temperatures. Affordable and clean energy? If it seems to be too good to be true, keep reading!
Residential Clean Energy Options
Solar and geothermal energy are two popular renewable energy options for homeowners that can help them save on their energy costs. The installation required for both options often prompts the question—is renewable energy expensive? Clean energy is affordable in the long run, but it does take some upfront investment. We understand this isn’t a viable option for everyone, but don’t worry, there are ways to take advantage of clean energy without any installation or upfront investment as well. And if you are interested in installation, there are tax credits available that can offset some of your initial costs, and over time, your home renewable energy system will begin to pay for itself!
Residential solar has the potential to offset all your electricity needs through the installation of solar panels on your roof or property. The installation costs typically sit at around $25,000. Thanks to the Residential Clean Energy Tax Credit, this can be reduced by up to 30%, bringing the cost down to $17,500. With minimal maintenance over the system’s lifetime, the payback period for solar is around 7-8 years. After that, your panels are essentially generating free energy, major solar energy savings! Not to mention, the existence of solar on your property increases its value, so even if you move, your investment will pay off.
Residential geothermal energy typically comes in the form of ground-source heat pumps (GSHPs). GSHPs move heat between your home and the earth through a series of pipes that connect underground. In the winter, these pipes absorb heat from the earth and transfer it to your home, warming it up. In the summer, they transfer the heat from your home to the earth, thereby cooling the home. The installation of GSHPs can vary between $10,000 and $30,000, a portion of which can be offset by the Residential EnergyTax Credit. A heat pump’s payback period is usually between 5-10 years, and its installation will save you 25-50% on your heating and cooling costs.
When we mentioned a renewable energy option that didn’t require any upfront investment or installation, we had community solar in mind. Community solar is a subscription-based solar service that allows renters and homeowners to embrace solar energy without having to install solar panels on their roof or property. With community solar, individuals can save between 10% and 15% on their annual electricity costs with a simple subscription to a community solar farm in their area. The solar farm produces clean energy for the local grid, and subscribers realize savings on their electricity costs.
Clean Energy Incentives
Incentives for clean energy adoption and energy efficiency swaps are a crucial component of how clean energy impacts your budget. With the incentivization of greener energy choices, you can realize more cost savings when making sustainable swaps. We encourage you to explore the incentives under the Inflation Reduction Act and what they could mean for you. Learn more here.
Focusing on energy efficiency is another effective way to reduce costs and emissions in one go, cleaning up your energy usage, especially when paired with a renewable energy option. There are several elements of energy efficiency to consider.
The first is the installation of energy-efficient appliances. Things like front-loading washing machines and electric stoves will both reduce your energy consumption and, in doing so, reduce your energy costs. Energy-efficient appliances are often a bit more expensive than conventional ones. However, they can save you 20-50% on your energy costs each month and, in this way, pay for themselves over time.
LED lightbulbs use up to 90% less energy than standard lightbulbs, making them another energy-efficient swap. Furthermore, they can last up to 25 times as long, thereby increasing their efficiency even further. Swapping regular lightbulbs for LEDs is a great way to save on energy costs while also conserving energy.
Like residential clean energy options, energy efficiency upgrades may take some up-front investment, often offset by incentives from the Inflation Reduction Act. However, in the end, these upgrades will help you save over time, and you’re supporting the future of the planet at the same time.
The Bottom Line
Is renewable energy cheaper? Yes! In the long run, renewable energy is the cheapest option available, and it is well worth the upfront investment for the long-term savings that it offers. As we continue building toward a global energy transition, we encourage you to take advantage of the positive impact that clean energy can have on your budget and help bring us closer to a more sustainable future.
The future of energy is clean, efficient, and good for your budget. So, whether you want to change out your light bulbs for LEDs or offset some of your heating and cooling costs with a heat pump, we encourage you to make these costand planet-saving swaps. Our Earth, and your wallet, will thank you.
If you’re not sure that residential clean energy solutions are right for you, consider community solar as a happy medium, allowing you to support the generation of clean power and save on your electricity bills without any installation or upfront costs. If that sounds more your speed, learn more about community solar here