A solar water heater can save you a ton of money in just a few years, particularly with a family. There are, in fact, two ways you can use solar power to reduce your water heating costs. The first is to install a solar powered water heater. The system will probably cost $6,000-8,000 to install. But, it should reduce your energy costs for heating water enough to pay for itself in about 10-15 years. Unless you live in an extremely cold region, your water heating expense for a family of four is probably greater than your heating expense. The purchase and installation of a solar water heating system is also eligible for a tax credit, and may be eligible for a rebate from your local power company. The system will include roof-mounted solar panels that will power your water heater.

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Buy energy-efficient appliances that will get you a rebate or a tax credit
Take all allowable tax credits for energy efficiency
Locate your water heater effectively
Insulate pipes to reduce cooling of water as it moves from the water heater through the pipes to the faucet