Renewable Energy

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What It Is

Renewable energy is energy that is naturally occurring and theoretically inexhaustible. Fossil fuels, though they are formed through natural processes, take millennia to form and available sources will be exhausted in the near future. Some major sources of renewable energy include solar, wind, biomass, and geothermal energy. 


Why It Matters

High energy prices, shrinking oil reserves, degradation from gathering resources, and growing public support are the driving forces that are escalating the demand for renewable energy technologies. Though most renewable energy technologies built for residential and commercial buildings are not yet cost-effective (mostly because of high initial costs), they are becoming more affordable with breakthroughs in technology, the availability of tax credits, and the increasing demand for renewable and clean electricity.

Aside from high capital costs and relatively long payback periods, renewable energy is an excellent way to save on electricity and utility bills, reduce your carbon footprint, and strengthen your green branding.


Getting Started

There are many forms of renewable energy. We’ll weigh the pros and cons of the following five resources, which are more commonly found in commercial and residential locations, below.

    • biofuels
    • geothermal heat pumps
    • solar photovoltaic (PV)
    • solar hot water systems
    • wind turbines



Biofuel is a form of fuel that emits no carbon and is created from the breakdown of carbon dioxide into organic compounds by living organisms, somewhat similar to composting. Biofuels are converted into a liquid fuel that is made from biological materials rather than fossilized sources (like oil and natural gas). Common sources of biofuel include food crops, grassy/woody plants, algae, and organic components of municipal and industrial wastes. The two predominant types of biofuels currently available are ethanol and biodiesel. Ethanol is an alcohol (like beer and wine) made from fermenting and is often used as a fuel or gasoline additive. Biodiesel is made from combining alcohol (usually methanol) with animal fat, vegetable oil, or recycled cooking grease, and can be blended with petroleum diesel to create a biodiesel blend.


Biofuels are mostly used in transportation. Consider retrofitting existing vehicles into taking more ethanol or running on biodiesel. Keep in mind that most average automobiles can only take gasoline blends of up to 10% ethanol and 90% gasoline (called E10), and only vehicles that run on diesel can take biodiesel. Most commercially available gasoline is already made up of E10 blends. If you already have vehicles that can use higher concentrations of ethanol, try using gasoline blends called E85 (up to 85% ethanol), which are sold at specific gas stations. 


    • Ethanol is the only renewable liquid transportation fuel available. 
    • Ethanol may be more sourced locally (meaning available for cheaper) than gasoline (by energy content), especially in corn and soybean-growing areas in the Midwest. 
    • Biofuels have the potential to reduce dependence on foreign oil and oil altogether.
    • Biofuels are carbon neutral, meaning that when they are burned, there is no carbon dioxide bi-product.



    • Ethanol is often more expensive than gasoline (by energy content), especially as the fuel travels over larger distances for retail.[1]
    • Too much ethanol may damage catalytic converters and engine cylinders in some cars.[2]
    • Vehicles get lower mileage with ethanol (ethanol contains 33% less energy than gas).
    • It is currently not economical to retrofit existing engines to take E85.
    • The environmental benefits vary depending on the original plant source. If crops use conventional fertilizers and other petroleum based products for their production, the resulting biofuels may have no significant advantage over non-renewable fossil fuels.



Geothermal Heat Pumps

Geothermal heat pumps use the constant temperature of the Earth (upper 10 feet of surface) to naturally heat and cool buildings. This shallow ground maintains temperatures between 50 and 60 degrees Fahrenheit. By circulating water and/or antifreeze through pipes drilled under your building, geothermal heat pumps collect the warm air from the Earth’s surface and transfer it to your building on cooler days.  They also remove warm air from your building and allow it to be absorbed by the cooler Earth on warmer days. 


Geothermal heating is a great option when constructing a new building. They are the most cost-effective for larger commercial buildings and in locations with harsher climates. 


    • Can save 30-40% on utility bills, according to EPA.[3]
    • Almost 70% of energy used in geothermal heat pumps is renewable (and free) energy from the ground.[4]
    • US installations may be eligible for up to $300 Federal Energy Tax Credit as well as a tax credit of up to $2000 through the Emergency Economic Stabilization Act of October 2008.[5]
    • More efficient than above-ground heat pumps
    • Are durable, require very little maintenance, and have low maintenance costs
    • The underground piping is often guaranteed to last 25-50 years.[6]
    • Most pumps provide a free source of hot water (from heat removed from building).
    • Produce nearly no noise
    • Typically are better dehumidifiers than normal air conditioners
    • Eliminate the risk of carbon monoxide poisoning associated with natural gas heating.
    • Release no pollution



    • High capital costs—goes for roughly $2500 per ton of capacity, which in total is around $5000 to $7000 (for residential systems), plus the cost for drilling (another $10,000 to $30,000).[7]
    • Require some disturbance to your landscape
    • Are somewhat ineffective when outside temperatures fall below freezing.



Solar Photovoltaic

Solar photovoltaic (PV) cells, which are usually made from silicon materials, are spread on a durable panel to convert sunlight directly into electricity (not to be confused with solar thermal, which is explained in detail below). In order to increase the amount and duration of light captured from the sun, more advanced solar panels are engineered to move on one or two axis to follow the angle of the sun.


Best for buildings that consume large amounts of energy during peak sunlight hours in the day and that are located in sunlight-rich areas. The best source for sunlight in the United States is in Southwestern states, including New Mexico, Arizona, Texas, California, and Nevada. Check this map for solar resources across the United States. Solar PV energy is also useful for locations where significant connection costs to grid power are expensive. Such devices include parking meters, emergency telephones, trash compactors, temporary traffic signs, remote guard posts and signals, and water pumps.  


    1. Can supply around 40% of your annual electricity needs [8]
    2. Eligible for US tax credits of up to 30% initial cost [9]
    3. Are becoming more cost competitive with improvements in technology
    4. Can take advantage of excess energy produced by selling energy back into the power grid
    5. Life expectancy of 40 years [10]
    6. Clean, silent, free electricity
    7. Sunlight is an unlimited resource
    8. Can double as rooftop building facades, shingles and tiles, or glazing for sunlight
    9. Very little maintenance needed


    • High capital costs—many systems take 10 years to pay themselves back; for a 2kW system, it costs around $20,000 (installation included) [11]
    • If excess energy is stored in batteries, significant energy losses are incurred
    • Large roof or wall area needed
    • Dependent on variability of sunlight—only 6 hours of peak sunlight on sunny days
    • Does not work at night or times of no sunlight



Solar Hot Water Heaters

Solar hot water heaters use the power of the sun to naturally heat water for your building. They work by having solar collectors—which are usually mounted on your roof—capture the sun’s heating power. Usually, solar hot water heaters can be found on south-facing roofs, as the most direct sunlight comes from a southern direction.  This heat circulates water and/or antifreeze fluid, which is then brought through pipes into a storage tank that transfers that heat into the water you consume. Solar hot water heaters are an efficient way to produce hot water for bathing, dish washing, laundry, and cooking. 


Very effective for buildings that consume large quantities of hot water, such as hotels and restaurants.


    • Initial investment are recovered within a relatively short time for residential buildings (3-8 years) [12]
    • Solar hot water heaters cost 50%-80% less to operate than traditional water heating systems [13]
    • Federal and state tax credits can pay for a significant portion of your upfront costs.[14]
    • Life expectancy of 20 years [15]
    • Can produce up to 80% of hot water for winter; 100% for summer
    • Are compatible with most existing hot water systems
    • Provide hot water even during blackouts
    • Do not pollute environment



    • High capital costs. For small “do-it-yourself” systems, costs are around a few hundred dollars; for professionally installed systems, varying in size, costs range from $1800 to $4000.[16]
    • If you have electric showers, cold-fill dishwashers, or washing machines that heat the water they use, they won’t be compatible with solar hot water. Consequently, they may not be compatible with all appliances.
    • Winter seasons may not produce as much hot water as needed.
    • May overheat or freeze with poor maintenance (depending on size)
    • May require a backup gas or electric water heater or boiler



Wind Turbines

Wind turbines are mounted on a tower to harness the wind’s energy. The process begins with the wind spinning the turbine’s blades, which then powers its generator, which creates electricity. Though large-bladed, high-above-ground wind turbines are most effective in generating electricity (as utility companies use), there are smaller models that are used for residential, commercial, and industrial buildings.  


Wind turbines are excellent for remote locations, such as mountain communities and remote countryside. They are great if supplemented by other renewable energy sources, such as solar PV. The best location for wind power is in the central or west central portion of the United States. Coastlines are also great sources for wind. Check this map for wind sources across the United States.


    1. Energy savings of 50% to 90% annually (for tower-mounted residential wind turbines)[17]
    2. Clean, sustainable, free electricity
    3. Works during blackouts
    4. Are becoming more cost competitive with improvements in technology
    5. Excellent supplement to other renewable energy sources



    • High capital costs—costs (unit and installation) anywhere from $10,000 to $70,000 for larger systems and $4,000-$9,000 for very small turbines (<1kW)[18]
    • Payback period for small wind turbines can take anywhere from 6 to 30 years.[19]
    • Repair costs are high
    • Susceptible to damage in thunderstorms, especially via lightning strikes
    • Wind is inconsistent and unpredictable, may experience periods of no electricity generation.
    • Can be noisy
    • Will not generate enough electricity if wind strength is too low
    • Unaesthetic to the landscape
    • Some locality’s zoning ordinances may not allow wind turbines.


Going Further

Try thinking about energy efficiency and reduction before investing in renewable energy. For example, you can reduce your energy bill (and carbon footprint) by first managing wasteful heating and cooling practices, purchasing Energy-Star appliances, and setting up an energy conservation program among your office and staff, to name a few strategies. Duke Energy has a list of useful tips and recommendations located here.

If you are ready to move forward with one or more of these renewable energy technologies, getting accurate and specific estimations are crucial. Local ordinances vary across states, so be sure that any retrofits or installations are legal with your county’s zoning ordinance. Consider hiring a consultant or discussing these issues with an electrician.


Case Studies

Chapel Hill Tire and Auto

With the help of Green Plus’ certification process and a solar company specializing in residential and commercial solar options, Chapel Hill Tire, of Chapel Hill, North Carolina, has renovated its shop in Carrboro with an 82-panel solar array on its roof.  This array generates approximately 21,000 kWh a year, which helps the auto repair shop save about $400 a month in utility bills. In addition, this project qualifies them for federal renewable energy tax credits of almost 65%, which altogether will help pay for the panels in five years.[20]


The Proximity Hotel

The Proximity Hotel in Greensboro, NC, which is the first and only LEED Platinum hotel in America, uses 39% less energy by utilizing solar hot water, geothermal energy, and other sustainable practices to heat and light its facilities.[21]


Resources for More Information



Renewable energy comes in many forms, from solar to wind to geothermal energy. In the past, unless a business had a large budget, investing in renewable energy was not necessarily a smart business decision. However, as technology continues to improve, costs for renewable energy retrofits and installations are coming down dramatically. Keep in mind that in certain situations, investing in renewable energy can be very smart and economical decisions, such as when constructing a new building. If none of these apply to you, continue holding on to your interest, for in the coming years renewable energy will most likely become more efficient and affordable for residential and commercial buildings. 


Glossary of Related Terms

Biodiesel: A product of combining alcohol (usually methanol) with animal fat, vegetable oil, or recycled cooking grease, and can be blended with petroleum diesel to create a biodiesel blend

Biomass: Biological material from living or recently-living organisms.

Energy Star: An international standard for energy efficient consumer products, including computers, appliances, heating/cooling systems, and lighting. 

Ethanol: An alcohol (like beer and wine) made from fermenting carbohydrate-high biomass and is often used as a fuel or gasoline additive.

LEED (Leadership in Energy and Environmental Design): Developed by the U.S. Green Building Council and provides a framework for identifying and implementing practical and measurable green building design, construction, operations, and maintenance solutions. Also, provides a suite of rating systems for the design, construction, and operation of green buildings, homes, and neighborhoods.[22]

Renewable Energy: Energy that comes from natural sources—such as sunlight, wind, tides, or geothermal—and is replenished naturally over time.


[1] Alex Halperin, “Ethanol: Myths and Realities,” Bloomberg Businessweek, 18 May 2006,, accessed 23 July 2013.

[2] Melissa Mahony, “Ethanol in gas: how much is too much?” Smart Planet, 7 May 2010,, accessed 23 July 2013.

[3] Ralph Leonard, “Geothermal Heat Pumps– Pros vs. Cons,” Do It Yourself Home Improvement,, accessed 23 July 2013.

[4] Ralph Leonard, “Geothermal Heat Pumps– Pros vs. Cons,” Do It Yourself Home Improvement,, accessed 23 July 2013.

[5] “Advantages and disadvantages of geothermal systems,” Green Energy Efficient Homes,, accessed 23 July 2013.

[6] “Geothermal or Ground Source Heat Pumps,” Consumer Energy Center,, accessed 23 July 2013.

[7] Laura Cowan and Emilie Sennebogen, “How Heat Pumps Work,” How Stuff Works, accessed 23 July 2013; Ralph Leonard, “Geothermal Heat Pumps– Pros vs. Cons,” Do It Yourself Home Improvement,, accessed 23 July 2013.

[8] “Pros and Cons of Solar Photovoltaic,” AE Solar Systems,, accessed 23 July 2013.

[9] “Solar Powered Systems Advantages and Disadvantages,” House Energy,, accessed 23 July 2013.

[10] “Solar electricity: an introduction,” YouGen,, accessed 23 July 2013.

[11] Jessica Blue, “Solar Panel Pros & Cons,” eHow,, accessed 23 July 2012; “Solar Power Frequently Asked Questions,” Find Solar,, accessed 23 July 2013.

[12] “Residential Solar Water Heaters for Cold, Moderate and Hot Climates,” House Energy,, accessed 23 July 2013.

[13] “Estimating the Cost and Energy Efficiency of a Solar Water Heater,” Energy Saver, 30 May 2012,, accessed 23 July 2013.

[14] “Estimating the Cost and Energy Efficiency of a Solar Water Heater,” Energy Saver, 30 May 2012,, accessed 23 July 2013.

[15] “Save Money and More with ENERGY STAR Qualified Solar Water Heaters,” ENERGY STAR,, accessed 23 July 2013.

[16] “Introduction to Solar Water Heating,” The Energy Guy, 1 January 2010,, accessed 23 July 2013.

[17] Rana Williamson, “Home Wind Energy: Advantages and Disadvantages,” 25 January 2010,, accessed 23 July 2013.

[18] American Wind Energy Association, FAQ for Small Wind Systems,, accessed 23 July 2013.

[19] American Wind Energy Association, FAQ for Small Wind Systems,, accessed 23 July 2013.

[20] “‘Grease Goes Green': Chapel Hill Tire Honored for Sustainable Business Innovations,” Green Plus, 6 September 2010,, accessed 23 July 2013.

[21] Virginia Phelps, “Proximity Hotel is the First LEED Platinum Hotel,” Proximity Hotel, October 2008,, accessed 23 July 2013.

[22] “Leadership in Energy and Environmental Design,” Wikipedia,, accessed July 2013.

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