Both energy efficiency improvements and solar energy systems can dramatically reduce your energy bill. But the savings and costs of each are somewhat different. Deciding whether to pursue a solar power system, or invest in improving energy efficiency depends on your budget, goals, and home needs.
Solar Power Systems Require More Up-Front Investment
Costs associated with installing solar energy systems are higher than those associated with energy efficiency projects. These costs vary substantially based on your location, energy consumption patterns, and the type of solar panels and other equipment you install. According to PowerScout, an average three-bedroom home will require a system with a capacity of around six kilowatts. A system of this size will cost anywhere from $18,000 to $22,000.
If you have limited roof space, you might have to spring for high-efficiency solar panels. A premium high-efficiency panel will increase your costs. Additional premium hardware － including microinverters or high-capacity solar batteries － will also increase the overall costs of your system.
Energy Efficiency Projects are More Affordable
Costs associated with energy efficiency projects vary according to the project you’re tackling. Small improvements, like swapping out your home’s incandescent light bulbs for LED or CFL bulbs, are easy and won’t cost much. Installing a new furnace or air conditioner, on the other hand, will be far more expensive. But the good news about energy efficiency projects is that you can find one to fit almost any budget – allowing your household to make improvements over time.
Insulation is Something Every Home can Benefit From
Since the average U.S. home consumes roughly 25 percent of its energy in heating and cooling, there are substantial opportunities for greater energy efficiency in these areas. Insulating your home properly is one of the best ways to achieve this. Whether you’re trying to keep your home hot or cool, installing new insulation can make it easier.
The amount of insulation you’ll need depends on the state of your current insulation. If it’s wet or moldy, you’ll have to get it completely removed and have all new insulation installed. Doing so will be more costly than simply adding new insulation on top of the old, which is the best option if your old insulation is in good condition. In either case, a good first step is to contact a home energy auditor to evaluate your needs. (Electric utility companies often conduct home energy audits for free; contact your electricity provider for more information.)
Hiring a contractor to install insulation in a 24’ by 50’ attic will cost around $2,500. But if you’re willing to do it yourself, you can save more than 50 percent over the baseline price.
Another way to reduce your heating and cooling costs is to upgrade your HVAC system. Energy-efficient air conditioners are available at a range of price points. While basic models start at around $3,000 (including installation costs), mid-range models can cost $5,000, and high-end air conditioners can reach prices of more than $10,000. The average cost hovers around $5,200. Like solar panels, the cost might be partially subsidized by state or local financial incentives, so contact your local energy department for more information. Energy efficient furnaces tend to be more expensive than air conditioners. Many gas furnaces cost around $10,000, plus up to $1,000 or more in labor costs.
Smart Homes are More Energy Efficient
There are dozens of other energy-efficiency projects that you could tackle. Smart home upgrades like smart plugs and smart lighting systems can shave a bit off your monthly energy bill. Installing Energy Star-approved appliances － including washing machines, dryers, and dishwashers － can also help you achieve greater energy efficiency.
But deciding to go forward with a particular improvement depends largely on your needs. If your home is already equipped with lots of energy-efficient appliances, installing more will yield only a limited reduction in your energy bill.
Solar Energy is the Most Environmentally Sustainable Source of Energy
The most important thing to recognize is that no matter how many energy efficiency projects are completed within your home, you’ll never be able to cut your energy expenditures as deeply as you could by installing a solar energy system. Only solar energy systems offer the possibility of entirely eliminating your electricity bill.
Since electricity costs vary with location, the precise amount you can save by installing solar panels varies substantially based on where you live. If you live in sunny California, for instance, investing in solar energy will probably lead to savings of $30,000 and $40,000 over the next 25 years. Washington residents, on the other hand, would see only about $10,000 in savings over the same period.
The amount you’ll save also depends on how you’ve structured your solar system investment. If you’re leasing your system from a third party operator, your savings will still be significant, but less than they would be if you bought your system using a loan. And if you paid cash for your solar system, your savings would be even greater.
Savings from energy efficiency projects tend to be far more modest. For instance, a central air conditioner that is 35 percent more efficient than your current unit would reduce your overall energy consumption by an average of just six percent, since cooling only constitutes 18 percent of your home’s overall energy expenditures.
In a perfect world, you could invest in both energy efficiency upgrades and a solar system. But if you have to choose between one or the other, think about what you’re trying to achieve, what your home needs, and how much you’re willing to invest.
Featured Image from Shutterstock / By kostasgr