Green energy puts green in homeowner wallets

(Reuters) - Two and half years ago, Steve Stewart erected a 100-foot windmill at his Barstow, California home. Stewart is no eco-crusader, but he does know a good deal when he hears it.

Although the windmill cost $53,000, Stewart paid only $32,000 thanks to state tax incentives. His electric bill has zeroed out from $2,000 annually before, and most months he can even sell back surplus power to his local utility, Southern California Edison, netting as much as $500 per year.

"For me, it was merely a financial calculation," says Stewart, who estimates it will take about seven years to fully pay off his investment. "I wasn't out to save the planet, just to save myself some money."

Homeowners across the country are doing similar math. Soaring energy costs, generous government and utility incentives plus the falling price of technology are leading more Americans to replace their conventional power or heating sources with renewable ones.

An unseasonably warm winter has brought no relief to the price of home heating oil which has hit a national average of $4 per gallon in February, topping gasoline prices in some states. That's nearly 50 cents more than a year ago.

"Typically what motivates homeowners to remodel is comfort and quality of life," says Brad Queen, energy division director at the Colorado-based Center for Resource Conservation. "But it is the economics, the financials, that can ultimately make the case."

The U.S. market for solar energy systems grew by 140 percent in 2011 as costs dropped by two-fifths, according to the Solar Energy Industries Association. Today, there are 1.5 million U.S. households using solar water heating, and enough solar energy available to power 750,000 homes. Natural gas prices are at a 10-year low, and in 2010 more than half of all new single-family homes were built to use natural gas.

Still, retrofitting an existing home for better efficiency can cost from $6,000 to more than $100,000 depending on the ambitiousness of the plans. But what, and when, will energy renovations ultimately pay back? What are the financing options available? Will your home's resale value go up? These are just some of the calculations to consider before embarking on your next home-improvement project.

ENERGY AUDIT IS FIRST STEP

For most property holders, installing solar panels or a wood-pellet stove are not going to bring the highest return on their investment. An energy audit is the best way to understand what will.

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Green energy puts green in homeowner wallets