The Next Stimulus: Bigger Tax Breaks for Solar Hot Water
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While photovoltaic technology—though promising—is still lacking in the efficiency department and prohibitively expensive for the average homeowner, solar hot water systems use the sun’s heat more directly, and therefore more efficiently. Consequently, fewer panels are needed to create an equivalent amount of energy. You’re using the same amount of energy for about a quarter of the cost.
After conservation, says Larry Hunter in an Op-Ed piece for the New York Times, you’ll get the biggest bang for your solar buck by investing in a solar hot water system for your home. Right now, there are tax breaks and incentives for solar panels; but if we really want to get off fossil fuels and stimulate the economy, says Hunter, we need to raise the cap on the federal solar tax credit.
THE Obama administration is poised to start a huge program to develop renewable energy sources — and at the same time, it hopes, create jobs, limit pollution and narrow our trade imbalance. The program is likely to include incentives for conservation — to encourage people to insulate houses and buildings properly, drive cars that need less gas and use low-flow shower heads and high-efficiency lighting. Reducing energy use, after all, is the cheapest way to reduce our carbon footprint.
But after conservation, one of the most effective and efficient steps the government can take is to encourage the use of solar hot-water systems — a well-developed and relatively low-tech method for using the sun’s energy.
Solar hot water systems are not as well known as the electricity-generating solar panels that use photovoltaic cells to gather energy. But hot water systems are more efficient than photovoltaic systems and can create the same amount of useful energy with fewer panels. Water heating accounts for a large share of a home’s energy use — typically the largest share after heating and cooling.
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Since Jan. 1, a federal solar tax credit has been available to homeowners for up to 30 percent of the installed system cost, with a cap of $2,000 on solar hot water and $5,000 on photovoltaics. If Congress and the Obama administration were to raise the individual tax credits to 40 percent or 50 percent, and the cap to $5,000 on both systems, it would reduce the payback time on a solar hot water system to only six to eight years. At the same time, we would be taking a step toward a sustainable energy future.
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