Can we afford to go green at home with a solar water heater?

A few years ago, I installed a tankless water heater at home — it’s about the size of a small suitcase and only heats water as you need it — because I needed a new one and the cost of doing the tankless one was only about three times more than installing a regular one. I figured it would take a few years to break even — the financial savings each month of not heating water all of the time would eventually equal the extra money I spent installing the gadget. And even if the financial return was questionable, I figured it was a good thing to do.

I see in a DMN story today that Oncor is trying to incentivize people to install solar water heaters now: You can get up to $1,500 back on an installation that uses a roof panel to collect heat from the sun to ultimately heat water in the house. The only catch: It can cost up to $8,000 to install the solar system, which is expected to generate utility savings of about $35 per month.

If you do the math, that’s a payback of 15.48 years, assuming the installation cost is reduced to $6,500 (after the incentive) and assuming you save $420 a year in utility costs ($35 per month — this is an estimate from the DMN story). I would like to be as green as possible, but in this case, "possible" needs to include a reasonable financial incentive. A couple of years on a payback — I can live with that. Fifteen years on a payback — if things go as they usually do around the house, I’ll be replacing the solar system before it pays me back.

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