Renewable Energy Installation Costs by State: Which Energy Source is Right for You?


Renewable energy is increasingly available across the United States. However, how do you know which type is ideal for your home? The best choice for your situation often depends on your climate, sunshine, weather, and access to water.

Examining your state’s renewable energy statistics can be a great place to start. Some municipalities offer tax incentives and rebates for the installation of renewable technologies, while others have limitations on the types of sources.

The cost of these facilities can vary widely from state to state. By examining how the different types of renewable energy vary across the United States, you can make the right decision on which source is best for you.

1. Photovoltaic electricity

Photovoltaic electricity refers to the process of using the sun’s rays to generate electricity. Experts predict that this energy will account for 48% of renewable generation by 2050, making it the fastest growing source of electricity.

The top five states for solar installation are California, North Carolina, Arizona, Nevada, and Texas. In the Golden State, for example, about 17% of homes are solar powered and the industry employs more than 86,000 people.

Experts measure the return on investment of solar installations by a payback period, a measure that refers to the number of years it takes for the energy system’s savings to exceed the installation cost. For example, if the initial installation cost was $ 20,000 for the solar panels and the savings were $ 5,000 per year, the payback period would be four years.

The price of renewable energies drops every year, but the startup still requires a significant investment. To install a solar power source, the cost is currently $ 3 to $ 5 per watt, and the average 5 kW residential system will cost around $ 15,000 to $ 25,000 before any tax incentives.

Another key consideration for PV electricity is the amount of forest cover around your home and the positioning of your roof. The most efficient solar panels require a south-facing surface, so be sure to take this factor into account.

2. Solar Thermal

Solar thermal technology converts sunlight into heat, which can then heat homes or water. There are two types of solar water heater systems: active and passive. Active systems have circulation pumps that distribute water throughout the house, unlike passive systems.

The main difference is that active systems require mechanical processes, while passive systems rely on the design of the house. In this way, passive solar is not as climate sensitive.

The installation of solar thermal requires a new hot water tank. While the initial investment can be large, this system only requires maintenance every 3-5 years and may not require component replacement for 10 years.

One of the advantages of solar thermal is that you can use it in combination with a geothermal heating system, which is particularly attractive for areas with cold winters or low sunlight for an extended period. Using these systems together ensures that you will always have hot water despite inclement weather.

If you live in a northern state, you can get the most out of this technology.

3. Geothermal energy

Geothermal heat derives its energy from deep in the ground. Using water or steam, energy is transported to the earth’s surface, which you can then use to generate electricity, heat, or cool air. Geothermal electricity is rarely used outside of areas with high tectonic activity because it requires high or medium temperatures to operate.

Geothermal power plants in the United States generate 3,200 megawatts, the energy equivalent of three nuclear power plants. The states that use this technology the most are California, Nevada, Utah, and Hawaii.

The geothermal potential is not significantly affected by the outside temperatures. In fact, northern states with extreme cold in winter will save money using this technology as opposed to fossil fuels. Because it harnesses the energy of the earth’s subsoil, you can use it almost anywhere.

Geothermal systems start at around $ 5,000 per tonne of heating or cooling capacity, although they can go up to $ 9,000 per tonne. Fortunately, new installation practices reduce costs. In comparison, a standard HVAC system costs about $ 3,000 per tonne.

Federal and local incentives exist for those who install geothermal programs that cover between 30% and 60% of the total system price. With these rebates, the renewable energy source rivals the cost of traditional fossil fuels.

4. Hydroelectric micro-electricity

This micro hydroelectric platform generates 10 electricity households. Credit: Speshoutdoors, FlickrCC

Micro-hydroelectricity is a renewable resource that uses a turbine or a pump to generate electricity. Unlike traditional hydroelectricity, where a large dam is required, this technology is preferable for single-family homes located near a body of water.

A single 10 kilowatt micro-hydropower system, which costs less than $ 100 and can be installed without professional help, can provide enough power for a large home or farm.

Because it requires stable and large amounts of running water, you can only use this technology in areas where water safety is ensured. If you don’t live near a river or stream, it’s probably not worth moving.

Water rights are a critical factor in your ability to install micro-hydro on your property. If your system has minimal environmental impact – and you don’t plan on selling electricity to a utility provider – the process will likely be easy. You can find out more from your local permit office.

Like other renewable sources, your municipality may offer incentives and tax credits to those who install micro-hydro systems.

5. Wind turbines

Wind turbines create electricity by using propeller blades to turn a generator. Wind is the second largest source of renewable energy in the United States after hydroelectricity. The industry is striving to improve the reliability of this technology, with the aim of reducing costs and improving efficiency.

Four states provide more than half of wind power generation in America, including Texas, Oklahoma, Iowa, and Kansas. Unfortunately, however, turbines typically require a lot of land – a farm in Texas, for example, occupies 36,000 acres.

The installation of this technology at the residential level depends on a number of factors, including the amount of wind, available incentives, economic value, and potential zoning requirements.

Like other renewable energy sources, one of the advantages of wind power is the ability to connect or operate independently from the grid. For grid-connected systems, there are possible tax incentives for reselling excess electricity to utility companies.

In 2017, the average price for small wind projects was $ 10,117 per kilowatt, although costs vary based on zoning specifications, permits and more.

Choose well

With so many energy alternatives on the market, it can be difficult to decipher what’s best for you and your household. To get started, research your state’s tax incentive programs for renewable energy.

Some forms of renewable energy, such as wind and solar, can be highly dependent on climatic and meteorological factors. Other forms, such as geothermal energy, are more widely available but can be prohibitively expensive. Comparing the economic value of each type can help you in your decision.

The United States produces 81% of electricity from fossil fuels like coal, natural gas, and petroleum. With renewable options becoming economically viable, choosing the right type for your home will be straightforward.


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