Solar water heaters use 1/3 energy, Progress Energy study finds

Progress Energy customers saved an average of $235 a year by switching to solar thermal water heater, representing an average annual savings of 63 percent on the water heater portion of their power bill.

Those are the results Raleigh, N.C.-based Progress reported this week to the N.C. Utilities Commission to wrap up a pilot project using 150 customers to test the efficiency of solar thermal water heaters. As part of the year-long pilot, Progress contributed $1,000 toward each customer's cost of buying a solar thermal water heater.

The company says that more than 15 percent of electricity used in a typical home is used for heating water. Solar water heaters use the sun as their primary source of energy, with electricity (or natural gas) as a backup.

Solar water heaters are known for their high efficiency performance as well as their high price tags, costing about 10 times to 20 times as much as a conventional water heater. Progress reported that buying and installing the solar water heaters averaged $7,271 per household, ranging from $4,000 to $12,375 per home.

Homeowners rarely pay the full price, however. In North Carolina, for example, solar water heaters qualify for a 30 percent federal tax incentive and a 35 percent state tax credit (up to $1,400), which would cut the cost by about half.