Clean home energy is gaining power
If you're not prepared to put solar panels on your roof just yet, you still have options in the alternative energy field. More than 750 utility companies around the nation offer "green power options," in which customers pay a small premium on their bill to support the research and development of renewable energy sources. State regulators closely follow the money trail, so you can be sure your energy dollars will be spent the way you intend.
"It's popular in some places, and starting to creep upward," says Ed Legge, spokesperson for the Edison Electric Institute, which represents two-thirds of all electrical utilities in the country. "The dollar investment in these technologies is where the growth is going to come from."
Additionally, cities can qualify as green power communities with the Environmental Protection Agency by meeting certain green energy requirements. Thirteen cities — including Beaverton, Ore., Boulder, Colo. and Swarthmore, Pa. — have received the designation.
Investment flows to a variety of renewable sources. Nearly 63 percent goes to wind; 23 percent to biogas (the energy produced from organic breakdown, such as methane emissions from landfills) and biomass (the heat generated by city incinerators); 7 percent to geothermal; 6 percent to hydroelectric power and 1 percent to solar. On the whole, clean and renewable energy provides 2.7 percent of the nation's power, equivalent to 11 million homes.
Experts say wind holds the most promise for utility-scale energy because it's cost-competitive with fossil fuels and has the most untapped potential. "If South Dakota was fully built out with wind turbines, it would provide all the power for the entire United States," says Gary Schmitz, spokesperson for the National Renewable Energy Laboratory.
On a sunny day, Rich Weiss' electrical meter runs backward. The solar panels he installed in 2005 power his home in Los Altos, Calif., and, during peak periods, actually return energy to his local utility, which credits him in a process known as "net metering."
"[Going solar] was partly an emotional and somewhat a monetary decision," says Weiss, who adds that the $30,000 system should pay for itself in about seven years.
Weiss is part of a small but growing group of homeowners nationwide who have turned to clean and renewable energy sources to power their homes. Though fossil fuels still generate most of the nation's energy, nearly 1 million homes depend on an on-site renewable source, such as solar, geothermal or wind power.
These technologies are picking up momentum as concerns mount about global warming and the price of oil and gas. Green building programs like Leadership in Energy and Environmental Design award points for having them.
Solar energy has come a long way. The current generation of panels can produce energy even on cloudy days and in wintertime. Solar power can also heat water. Monique Hanis, director of communications for the Solar Energy Industry Association, estimates that about 250,000 U.S. homes have one system or the other.
They're still pricey, but the cost is dropping as technology improves. Power generators range from $20,000 to $100,000 and water heaters run about $5,000 to $7,000.
Advocates credit the Energy Policy Act of 2005 with expanding support for residential solar power. Under the Act, all public utilities are required to offer net metering services to customers, although the regulations governing it vary by state. Hanis says some utilities are friendlier than others to the practice — for example, the amount they credit varies and some charge extra maintenance fees.
The Act also includes a tax credit for one third the cost of a residential solar system, but with a $2,000 cap. The credit expires at the end of this year, but SEIA is working to extend it for several more years and lift the cap altogether.
Financial help at the state level can considerably exceed the federal credit, however. Weiss says he never would have installed his solar system without $8,000 from California's incentives program, one of the most extensive in the nation. The Database of State Incentives for Renewables & Efficiency (available at dsireuse.org) maintains an updated list of these programs.
If state and federal incentives continue, solar power and water heating is sure to keep growing at its current rate of 40 percent a year. Hanis points out another plus. "As the price of traditional energy goes up, the price of solar is going down," she says.
While utility-scale wind turbines are the fastest growing segment of renewable energy and provide about 1 percent of all power in the country, Ron Stimmel of the American Wind Energy Association says only about 2,500 homeowners nationwide have installed one on their own land.
Even though turbines cost only half as much as a solar array of similar output, they need a strong and steady source of wind, clear open space and usually a tower for mounting, which means most of them are in rural areas. However, "urban turbines" have recently entered the market, reducing the need for space or towers, or both. Still, homeowners and small businesses have installed fewer than 100, partly because they have elaborate siting requirements to be effective. Like solar panels, opposition from homeowner associations, zoning boards or historic preservation groups can be an issue.
But wind turbines are also eligible for "net metering" under the Energy Policy Act of 2005. Stimmel says the number on homeowners' property is growing by about 15 percent a year, and he predicts that percentage could expand to 40 percent if wind begins to receive the same tax incentives as solar. "There are literally millions of homes that would be viable sites," he says.
Geothermal heat pumps, which draw heat from the ground to warm the home or pump it back for cooling, are the most common form of home-based renewable energy.
John Kelly, executive director of the Geothermal Heat Pump Consortium, estimates that more than 700,000 homes in the United States use a geothermal heating and cooling system. "It works practically everywhere," he says.
Although such systems are quickly gaining popularity nationwide, they are most common in areas with extreme climates that result in a faster payback on investment. No federal incentives exist for geothermal systems, which cost between $15,000 and $25,000, but Kelly says about a dozen states offer strong rebate programs. He expects 10- to 20-percent growth this year. "A large part of the population doesn't know about [them], the upfront cost is expensive, and there isn't a well developed group of installers," he explains.
Advocates say government support will likely determine which segments of the renewable energy market will see the most growth. "The places where it grows the fastest are the ones with the most aggressive incentives," says Paul Torcellini of the Department of Energy's National Renewable Energy Laboratory. "The consumer needs to want to do these things, and incentives provide a guide."
Torcellini says one key is to educate people to think about the big picture. "If you bought a car today and part of the deal was that you had to buy all the gasoline for the life of the car when you pick it up, it would change the dynamic dramatically," he says. "It's the same with renewable energy. You pay [for the system] all at once. But once it's up and running, there's little additional cost."
— by Paul F. P. Pogue, with additional reporting by Amy Mastin and Mike Walker