Lets Assume the homeowner adds the option of a $4,300.00 solar hot water system to a new home.
A conventional hot water tank would cost between $300.00 or $600.00 per installation for new construction.
This means that a minimum of $4,000.00 is the upgrade option for solar water heating systems with an 80-gallon solar tank with an electric element for cloudy days.
The federal tax rebate or credit off taxes owed is 30% of the $4,300.00 solar option or $1,290.00. Assume a 3% down payment of $120.00 and interest rate of 6% over a thirty-year period.
The spreadsheet below in the 35% income tax bracket for the itemized deduction, the utility savings are based on current natural gas prices for 4 people, or electricity or LP gas for 3 people with a 2% increase per year. Below is the first five-year spreadsheet of a thirty year mortgage.
| |
$1,290 | Federal Tax Rebate | + 385 | Utility Savings | + 80 | Tax Deduction on loan | - 120 | Down payment on Loan | - 279 | Yearly Loan Payment |
$1,354 |
Net Profit | + 450 | GRU Rebate - NOTE: The $450.00 rebate is available to builders |
$1,704 |
Net Profit | | | |
|
$385.00 | $1,290.00 | $81.02 | $120.00 | $279.12 | $1356.90 | $393.00 | $0.00 | $80.00 | $00.00 | $279.12 | $193.88 | $400.00 | $0.00 | $78.91 | $00.00 | $279.12 | $199.79 | $408.00 | $0.00 | $77.75 | $00.00 | $279.12 | $206.63 | $416.00 | $0.00 | $76.53 | $00.00 | $279.12 | $213.41 | $2002.00 | $1290.00 | $394.21 | $120.00 | $1395.60 | $2,170.61 |
|
Keep in mind that the first year cash flow of $1,356.00 to someone in the 35% tax bracket is worth $2,078.00 in earned income. This may be a bit confusing but for someone that does not have this $1,356.00 savings would have to earn $ 2,078.00 and pay Uncle Sam $722.00 in taxes to have $1,356.00 in disposable income. The home equity value to a solar hot water system as of 2005 typically increases the resale value of the home by $4,000.00. All ECS Solar Energy Systems components are 100% warranted for a period of five years. |
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