Renewable Installation Costs by State: Which Energy Source Is Right For You?

Renewable energy is becoming widely available throughout 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, amount of sunlight, weather and water access.

Looking into your state’s statistics on renewable energy can be a great place to start. Some municipalities offer tax incentives and rebates for installing renewable technology, while others have limitations on source types.

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

1. Photovoltaic Electricity

Photovoltaic electricity refers to the process of utilizing solar rays to generate power. Experts predict that this energy will make up 48% of renewable generation by 2050, making it the fastest-growing electricity source.

The top five states for solar installation are California, North Carolina, Arizona, Nevada and Texas. In the Golden State, for instance, roughly 17% of homes get power from solar, and the sector employs more than 86,000 people.

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

The price of renewable energy falls each year, but the startup still requires a substantial 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 prior to any tax incentives.

Another vital consideration for photovoltaic electricity is the amount of forest canopy 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 warm homes or water. Two types of solar water heating systems exist — active and passive. Active systems have circulating pumps that distribute water throughout the house, while passive systems do not.

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

Installing solar thermal requires a new hot water tank. While the initial investment may be significant, this system only requires maintenance every 3 to 5 years and may not need any replacement components for up to 10 years.

One benefit of solar thermal is that you can use it in combination with a geothermal heating system, an especially valuable solution for areas with cold winters or low sunlight for an extended period. Using these systems together guarantees that you will always have hot water despite the weather.

If you live in a northern state, you can benefit the most from this technology.

3. Geothermal Energy

Geothermal heat derives energy from deep in the ground. Using water or steam, power is carried 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 significant tectonic activity since it requires high or medium temperatures to work.

The United States’ geothermal power plants generate 3,200 megawatts, the energy equivalent of three nuclear plants. The states that utilize this technology the most include California, Nevada, Utah and Hawaii.

Geothermal potential is not significantly affected by outdoor temperatures. In fact, northern states with extreme cold in winter will save money using this technology as opposed to fossil fuels. Because it harnesses energy from the sub-surface of the earth, you can use it almost anywhere.

Geothermal systems start at around $5,000 per ton of heating or cooling capacity, though they can go as high as $9,000 per ton. Fortunately, new installation practices are reducing costs. In comparison, a standard HVAC system costs around $3,000 per ton.

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

4. Micro-Hydropower Electricity

micro hydro power
This micro hydropower rig generates 10 households worth of power. Credit: Speshoutdoors, FlickrCC

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

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

Because it requires stable and significant amounts of flowing water, you can only use this technology in regions with water security. If you don’t live near a river or stream, it’s likely not worth relocating.

Water rights are an essential factor in your ability to install micro-hydropower on your property. If your system has a minimal environmental impact — and you don’t plan to sell power to a utility provider — the process will likely be easy. You can find out more through your local permitting office.

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

5. Wind Turbines

Wind turbines create electricity by using propeller blades to spin a generator. After hydropower, wind is the second-largest renewable energy source in the U.S. The industry is working to improve the reliability of this technology, with the goal of driving down costs and improving efficiency.

Four states provide more than half of wind generation in America, including Texas, Oklahoma, Iowa and Kansas. Unfortunately, however, turbines typically require lots of land — one farm in Texas, for instance, takes up 36,000 acres.

Installing 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 sources of renewable energy, one benefit of wind power is the ability to either connect with or function apart from the grid. For grid-connected systems, there are possible tax incentives for selling surplus electricity back to utility companies.

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

Choosing Right

With so many energy alternatives on the market, it can be tricky to decipher which is best for you and your household. To start, research your state’s tax incentive programs for renewables.

Some forms of renewable energy, like wind and solar, can be highly dependent on climate and weather factors. Other forms, like geothermal, are more widely available but may be cost-prohibitive. Comparing the economic value of each type can assist you in your decision.

The United States generates 81% of electricity through fossil fuels like coal, natural gas and oil. With renewable options becoming economically viable, choosing the right kind for your home will be simple.