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How expensive is it to switch to lower-carbon energy in my own home?

If you can afford to make some investments upfront, you may actually save money in the long run by using lower-carbon energy.

 

If you own your own home and car, you might be looking for big ways to lower your carbon footprint. Solar panels and electric vehicles are two of the most popular, but these are large pieces of high-tech hardware that might seem unaffordable at first glance. But in fact, investments like these could potentially save you money in the long run, says Dr. Apurba Sakti, a research scientist at the MIT Energy Initiative who studies economic and technological aspects of energy storage systems. It’s important to “really just look at your options and see what the actual costs would be for making the switch.”

First, let’s talk about buying clean power directly from the electric grid. Many electric utilities let their customers choose to buy low-carbon electricity from renewable energy sources, often marketed as “green power.” Depending on where you live, this can be quite cheap: in 2016, the average added cost was about $16.25 a month to power an average-sized home.1 Even if your utility doesn’t give you that option, you can buy “renewable energy certificates” that fund the building of new solar farms and wind turbines.

But these options will always cost at least a little more than your normal electricity bill. Remember, utilities are already trying to make power as cheaply as possible: if adding more solar or wind is cheaper than your normal energy mix, your utility will make those investments on its own. So if you want to lower your carbon footprint while also lowering your electric bill, you may need to install solar panels.

The cost of making energy with solar panels has dropped by roughly 90% since 2011, making this a much more accessible option than it used to be for ordinary homes.2 “Research and global market size are two main factors driving down the cost,” says Sakti. Solar cell research has led to more efficient panels that can make much more electricity from the same amount of sunlight. And as solar panels have grown in popularity, more factories invest in manufacturing them, making them cheaper for buyers.

Buying solar panels is still a large upfront expense, but there are ways to offset that cost. For anyone considering solar panels, either to lower their electricity costs or to help combat climate change, Sakti recommends “looking into local incentives and checking how wide the range of options is.” Everyone in the U.S. can claim a 26% federal tax credit for the price of installing solar panels, and many states offer additional state tax credits. If that still doesn’t bring the cost down to a point you can afford, there is also the option of leasing solar panels instead of buying them outright. “You’ll just pay the company a monthly rate for electricity, which is usually lower than what you already have,” Sakti says.

Electric vehicles (EVs) are also beginning to fall in price. Many models now sell in the $30,000 range, even before tax credits. This might still be more than you’re used to paying for a car, especially if you normally buy used. But you’ll also save money on less maintenance, and the fact that electric charging stations are less expensive than filling gas. One factor to keep in mind, says Sakti, is the source of the electricity you’re charging your electric vehicle with. “EVs can have a lower carbon footprint compared to internal combustion engine vehicles, depending on whether the electricity used to charge the batteries come from lower-carbon sources,” says Sakti. In other words, if the electricity in your home still comes from coal power, an electric vehicle might not be the right choice to lower your personal carbon emissions.

Solar panels and electric vehicles are only expected to become more efficient and cheaper in the future. Other potential low-carbon hardware to look into includes electric heat pumps, which can heat your home without natural gas or oil, and home battery systems, to make the most of rooftop solar panels even when the sun isn't shining.

 

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Footnotes

1 National Renewable Energy Laboratory: Status and Trends in the U.S. Voluntary Green Power Market. https://www.nrel.gov/docs/fy18osti/70174.pdf

2 U.S. Department of Energy Office of Energy Efficiency and Renewable Energy. https://www.energy.gov/eere/solar/photovoltaics-research-and-development