What is the payback time on a solar water heater?

We get this question a lot. Much depends on your house and how difficult the installation will be. A typical system will cost about $5600, but you only pay a fraction of that. Austin Energy pays for $2000 of it, the federal government pays for another 30% or $1680(in this case) of that. So your total system cost is about $1920. Not much more than a conventional water heater!Depending on your household use, you can save between $400-$800 per year. So the payback time varies greatly, between 2-5 years if you get the Austin rebate. If you're not eligible for the Austin Energy rebate and only take the tax credit, payback time is generally 5-8 years depending on household habits.

 

Rebate Summary: $2000 AE + 30% of cost Federal tax credit

 

How Much can I save?

Electric water heating for a family of four can cost $40 to $80 per month to operate at current prices. That's about $500-$900 per year, depending on use and how many heaters you have. A gas water heater can cost $20 to $30 per month to operate, while propane costs much more. Assuming your solar system operates at 85% efficiency, you can save up to $9,000 over 10 years(electric) or $3,600(gas).When calculating payback, remember that energy prices are not fixed and will only increase in the future. We generally assume that energy prices will rise at about 5% per year.

 

 

 

Another way to think about this is the marginal cost of upgrading to solar: If it's time to replace your old water heater anyway, then you're looking at $500-$1000 to replace with a standard water heater. If you qualify for rebates the additional cost of going solar can be as little as $1000-$1500 more than you would have had to spend on a regular tank.

Solar water heating as an investment: Your total investment after incentives will be around $2000. Most people will save at least $400 to $600 per year. That's an annual 25%-35% return on investment, tax free, no capital gains tax. To beat that in the stock market you'd have to receive at least a 50% return annually, before taxes.

If you bought Google stock the day it was first offered in 2004 you would have seen a tremendous return of 39% annually. But if you sold the stock you'd be taxed possibly 25% in capital gains. Using this comparison, a solar water heater is mathematically a stronger investment than Google stock!

 

 

 

Most people don’t think about how much they spend simply to heat their water.

Many homes use more energy to heat water annually than to run their air conditioners

 

What does this mean to me?

 

Same as Cash Financing: 0 Down. No payments no interest for 6 months. Get your tax credit before you pay for it! For qualified buyers.

 

Velocity Credit Union/Austin Energy Financing: Austin Energy offers an interest free loan up to 10 year terms for installation of a solar water heater. The maximum loan amount is $5000, which means monthly payments of $41.67. If you choose this option, then you cannot take the $2000 rebate that they offer.

 

Sunbelt Solar has payment options that work for all qualified buyers, Austin energy customer or not.  

 

Regular Financing: 0 Down. Payments as low as $76/month with Austin Energy rebate. $118/month for regular price systems without the rebate. With this option, you start saving right away and virtually never come out of pocket because your monthly savings will offset your payments on the system.

 

We also accept most major credit cards.

 

Rebate Form Links. We fill the non IRS forms out for you.

Federal 30% credit form

 

Austin Energy $2000 rebate form (We'll fill it out for you)

 

Sunset Valley rebate form Sunset Valley residents: over 90% of your system is paid for by the combination of incentives.