My green home: $90,000 in clean tech upgrades, $20,000 in tax breaks

Government policies were a big help here. The federal government offers generous incentives for the purchase of solar panels and electric vehicles. The District of Columbia, where we live, offers additional incentives for both. Not only did these directly reduce our out-of-pocket costs, they have also helped manufacturers achieve economies of scale that made these technologies affordable in the first place.

So I thought walking through the experience might inform—and perhaps inspire—others who might be considering taking a similar leap.

Rooftop solar

My green energy odyssey started with solar panels. My wife and I live in a Washington DC row house with a gently-sloping, south-facing roof. With no tall trees behind the house, it’s ideal for generating power all day long.

In the spring of 2019, I got quotes from two solar companies. One company wanted $35,538 for a 8.5 kW system with 26 panels. The other firm quoted us $33,372 for a 8.64 kW system with 24 panels. In either case, we’d get a 30 percent federal tax credit worth more than $10,000, bringing the net cost below $25,000.

We decided to go with the more expensive vendor. The cheaper bidder wanted to anchor the solar panels directly to the roof, while the more expensive proposal would suspend the panels from beams mounted on the parapet walls on either side. The first firm assured me that they could seal the roof up good as new, but the idea of cutting into the roof made me nervous.

Later, the winning contractor told us that our roof was nearing the end of its life and would cost more to replace after solar panels had been installed. So we decided to have them replace our roof. Our chimney was also in bad shape, so we had a different company rebuild that. This added $17,482 to the cost of the project. We financed all of this—and the HVAC upgrades I’ll discuss shortly—with a home equity loan.

The roof was installed in early August. The solar panels arrived in October. Then there was a month’s wait for Pepco to hook up the system to the electric grid. Our system was finally active in November 2019.

Solar panels only generate power in the daytime. So if we wanted to build a self-contained system, we would have needed to buy batteries to store excess power in the day and for use at night. But luckily for us, DC law requires our electric utility, Pepco, to do what’s known as net metering. When we have excess power, Pepco credits us at retail rates, effectively providing us with free energy storage.

Our solar panels will pay for themselves in five years

In 13 months of operation, our system has generated more than 11 MWh of power, which our solar system’s website estimates saved us $1,250. Our electric bills reflect that. In the year before the solar panels were installed, our electric bills totaled $1,254. Over the following year, we paid only $72.

Still it would have taken more than 20 years for the solar panels to pay for themselves based only on these electricity savings. Luckily, free electricity wasn’t the primary benefit for us.

Under DC law, Pepco must acquire a rising share of its electricity from renewable sources. Pepco can either generate renewable power itself or buy solar renewable energy credits (SRECs) from third parties like us.

Thanks to DC’s stringent green energy requirements, SRECs in the district sell for more than $400. Each SREC represents 1 MWh of electric power, so our solar panels generate about 10 SRECs per year. Hence we can expect as much as $4,000 per year in SREC income. So far we’ve gotten three quarterly payments totaling $3,647.

When you combine SREC revenues with our electricity savings, the solar panels are likely to pay for themselves in about five years.

Americans outside of DC probably won’t get such a good deal. Many states don’t have an SREC program, and the ones that do have lower SREC prices.

When we installed our solar panels in 2019, they were eligible for a 30 percent federal credit. That figure dropped to 26 percent for 2020. It was scheduled to drop to 22 percent in 2021 and to zero in 2022. However, Congress just passed legislation to extend these deadlines by two years. So the 26 percent credit will now be available through the end of 2022. Then it’ll fall to 22 percent in 2023 and to zero after that.

On the other hand, the cost of solar panels keeps dropping. And some parts of the country get more sun than Washington DC. So if you live in one of America’s sunnier states, you may find that solar panels are a good investment even with little or no state help. And regardless, it’s good for the environment.

HVAC overhaul

When we decided to replace our air conditioner in early 2020, we weren’t thinking about reducing our carbon footprint. The condenser for our old air conditioning system was noisy and took up space in our tiny backyard. As we made plans to put solar panels on our roof, we wondered if we could put the condenser on the roof as well.

Our initial plan to do both at the same time didn’t work out. But a few months after the solar panels were installed, I hired a company to install a new system on the roof, since the old one was nearing the end of its life.

We decided to pay an extra $1,000 or so for a version that doubled as a heat pump that could heat our house as well as cooling it. In total, the air conditioning system—including heat pump capability and crane rental—cost $12,666. Buying the heat pump likely makes us eligible for a $300 federal tax credit as well as a rebate from the District of Columbia.

Weeks after the new air conditioner was installed, the oil-fired boiler that feeds our radiators sprang a leak, creating a puddle of water on the basement floor. I’d been wanting to get rid of that old boiler—and the enormous oil tank in our basement—for years. The leak accelerated our timetable. Rather than trying to salvage our aging boiler, we decided to replace it. It was July, so we had plenty of time to get a new one.

After researching the options, we decided to get a high-efficiency condensing model. We got a “combi” unit that doubles as a tankless water heater. It hangs on the wall and takes up dramatically less space than our separate boiler and water heater had before. It cost $10,500. I got an $825 rebate from the District of Columbia and may be eligible for a $150 federal tax credit.

Conventional boilers waste heat by sending a lot of steam up the chimney. A condensing boiler, in contrast, cools down exhaust gases to turn most of that steam back into water, extracting a few extra percentage points of heat in the process. These cooler, moister exhaust gases can’t go up a conventional chimney. Instead, condensing boilers use a plastic exhaust pipe that sticks out of the side of the house—angled slightly downward so the condensing water runs outside.

Did we really need the boiler?

It was only after both systems had been installed that I started to wonder if we could have done without the boiler altogether.

What we got is known as an air source heat pump—basically just an air conditioner that runs in reverse. In the summer, an air conditioner takes heat from inside the house and “pumps” it outside using a compressor. In the winter, a heat pump takes heat from outside and “pumps” it inside. (There are also ground-source heat pumps that extract heat from the ground.)

Because a heat pump moves heat rather than creating it, it can achieve greater than 100 percent efficiency—that is, one unit of input energy can yield more than one unit of heat inside the home. Add to this the fact that heat pumps run on electricity rather than by burning fossil fuels, and they tend to be better for the environment than a conventional boiler or furnace.

There’s an important caveat, however. Air source heat pumps work best when outdoor temperatures are moderate. As temperatures fall, they produce less and less heat and do so in a way that’s less and less energy efficient. On the coldest day in the coldest climates, the energy efficiency of an air source heat pump drops to around 100 percent. And more importantly, it might not produce enough heat to keep a house warm at all.

“Everyone used to say, ‘Don’t use heat pumps below 40′” degrees Fahrenheit (5 Celsius), said Nate Adams, a home electrification expert in the Cleveland area. “Old-school ones at 20 degrees might only be putting out 30 to 40 percent of their rated output.”

But heat pump technology has improved, Adams told me. Today some heat pumps can still achieve 50 percent of their rated output at temperatures as low as 0 degrees Fahrenheit (-18 Celsius). There are also “hyper heat” models that continue to work at even lower temperatures by boosting their power levels. However, at low temperatures they still suffer from poor energy efficiency.

To help deal with low temperatures, air source heat pumps are sometimes paired with resistive heating systems that work like an electric stove. Because they convert electricity directly into heat, these systems have efficiency ratings of only around 100 percent. And this means that electric heating is unlikely to be cost-competitive with a natural gas furnace or boiler on the coldest days.

Our heat pump is not a hyper heat model and doesn’t have a resistive heating element. So at least on the coldest days we’ll likely be forced to rely on radiator heat powered by our natural gas boiler.

While a heat pump can be up to three times as energy-efficient as a natural gas boiler, electricity is currently more expensive than natural gas. Adams tells Ars that these factors roughly cancel out in practice. A heat pump generally costs about as much to operate as a conventional system powered by natural gas. But this depends on your local climate and the local cost of electricity and natural gas.

So was it a mistake to spend $10,000 on a boiler when a better heat pump might have heated our home on its own? While relying solely on a heat pump was a viable alternative in theory, it probably wasn’t a realistic option for us in practice. Our heat pump/air conditioner is on the third floor of our three-story row house. A combination of low-quality duct work and a drafty first-floor kitchen leads to large temperature gradients between the first and third floors when we use the air conditioner/heat pump. In the summer, the ground floor might be 80 degrees F when the third floor is 72. In the winter, It might be 70 upstairs and 62 downstairs.

Radiators not only deliver more heat to the ground floors, they provide more precise control over where the heat goes since we can turn off the radiator in rooms that get too hot. So while the heat pump can keep the house warm on average most days, it doesn’t do as good a job of making every room comfortable at the same time.

Bottom line: in the coming years, I expect we’ll use the heat pump during the spring and fall, switching to radiator heat for the coldest weeks of between December and February. Over the next decade, I hope to improve both the insulation and the duct work in our house, which will enable us to use the heat pump more and the natural gas boiler less. Perhaps when the boiler reaches the end of its life some time in the 2030s, we’ll be ready to retire it and rely entirely on electric heat.

With luck, the environmental benefits of using a heat pump will also be larger by then. Electric grids are still fairly dirty today, so the environmental benefits of switching to a heat pump may not be large. But that will likely change as DC—and hopefully many other states—get more power from renewable sources.

Buying an electric car

Until 2020, we had a single gasoline-powered car—a Subaru Impreza. With a growing family, we decided to buy a second car. I wasn’t the only Ars staffer to go car shopping with electric vehicles in mind this year, and ultimately we decided to get a Kia Niro, a battery electric crossover rated for 240 miles of range.

Here too, state and federal incentives helped nudge us toward buying an electric vehicle. When we file our taxes this spring, we’ll get a $7,500 tax credit from Uncle Sam, lowering the net cost of the vehicle from $32,900 to $25,400. DC also exempts electric vehicles from excise taxes (which cost $680 for a typical vehicle) and registration fees.

My wife, our family’s primary driver, works in the Virginia suburbs. Her 16-mile round trip commute is short enough that we haven’t had to install dedicated circuitry for high-speed home charging. Kia provided us with a “trickle charger” that plugs into an ordinary electric outlet. It takes two days for the vehicle to recharge from an empty battery this way, but her short commute allows her to fully recharge overnight.

At some point, we’ll probably invest in a faster home charging system— especially if we eventually replace the Subaru with another electric car. But for now, trickle charging meets our needs just fine.

If we do upgrade our home charging system, we’ll get a DC tax credit for half the cost—up to $1,000.

The inherent efficiency of electric cars also means that their energy costs are lower than for a conventional car. The Kia Niro is rated at around 3.3 miles per kWh—our actual mileage so far has been even better than that. With electricity costing us around 12 cents per kWh, that works out to around 3.6 cents per mile.

In comparison, our old car got around 30 miles to the gallon, and gasoline costs about $2.20 per gallon nationally (local prices tend to be even higher). That works out to about 7 cents per mile. So the cost to fuel our old car is roughly double the cost of electricity for the new one.

Leaving natural gas behind

My family has taken some big steps toward a carbon-free lifestyle, but we still have a ways to go. As already discussed, our boiler still uses natural gas, though I expect to use the boiler less over time.

We prefer our gas stove to any electric stoves we’ve tried. We like the way natural gas stoves turn on instantly and provide even heat.

Electrification advocates like Adams sing the praises of induction stoves. At his urging, I ordered a portable single-burner induction stove so we can test it out. If we like it, then maybe our next full-sized stove will be electric.

The carbon source we’d find most difficult to give up is probably our gas fireplace. Our fireplace lacks a chimney, so it can’t easily be converted to burning wood. And of course burning wood produces carbon emissions, too.

All told, we spent more than $90,000 on our solar panels, an electric car, and two new HVAC systems. The car and the HVAC systems were each more expensive than more conventional, less energy-efficient alternatives would have been. However, these higher costs were somewhat offset by federal and DC subsidies and tax breaks totaling nearly $20,000. Plus we’ll be earning revenue from our solar credits for years to come.

All three systems are likely to be cheaper to operate than the systems we had before. Because our new Kia cost about as much (after tax breaks) as a conventional car, we’ll start saving money almost immediately.

It’s less clear whether our investments in high-efficiency HVAC systems were cost-effective. The high-efficiency boiler cost several thousand dollars more than a conventional one; we may never recoup that higher cost through lower natural gas bills. However, it offered us some other benefits beyond the satisfaction of helping reduce carbon emissions. The unit hangs on the wall and doubles as a water heater, freeing up a significant amount of space in our basement. It also freed up our chimney, which is now going unused. The chimney runs directly behind our ventless gas fireplace. My wife enjoys wood-burning fireplaces, so we may eventually convert ours to burn wood.

Adding heat pump capabilities to our air conditioner only added about $1,000 to the cost. This was easily worth the money. Even if we didn’t care about reducing our carbon footprint, it gives us peace of mind to have two redundant heating systems.

Our solar panels were the best deal of all. While they were expensive, we expect them to provide a quick financial payoff. And they provide clean, carbon-free energy to our heat pump and electric car.

Still, one consequence of getting the electric car and heat pump is that our solar panels no longer supply 100 percent of our electricity needs as they were estimated to do in 2019. For the first year after we got the solar panels, our electricity bills were consistently close to zero. But in the last two months, as we started using our heat pump and charging the electric car, our electricity consumption has far outstripped our production.

We don’t have room for any more solar panels on the roof. So for us to achieve a fully carbon-free lifestyle will require our electric utility to switch over to 100 percent renewable sources. Luckily, DC policymakers are aiming to do this by 2032, one of the most aggressive timetables in the US.

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