Which green renovations will add more value to your home?

by Barbara Messer, ninemsn Money

A growing number of Australians are looking to reduce their carbon footprint by living in eco-friendly homes. But before you rush out to install a water tank or a double-glazed skylight, it's important to understand which green features will add long-term value to your property, and which ones may not be worth the investment.

Alistair Gibson, NSW manager at Sun Connect, believes solar energy panels can significantly reduce greenhouse gas emissions, while adding thousands of dollars to your property value when it comes time to sell.

"Solar energy allows people to be environmentally responsible and do their part to reduce their carbon footprint and meet Australia's renewable energy targets," Gibson says. "But as an added bonus it can significantly reduce electricity bills and therefore increase the long-term value of your property."

Under the federal government's Solar Credits Scheme, households with rooftop solar panels will receive renewable energy credits, which can significantly reduce the cost of going green. State governments are also introducing net feed-in tariffs for electricity fed back into the grid, which should repay the cost of the solar panels over several years. The tariffs are slated to last 20 years, so homeowners can actually make money over time.

"The conditions for solar energy in Australia are some of the best in the world," Gibson says. "We've got very warm summers and very short winters, so we expect to see a lot of demand for people looking to buy homes with renewable energy."

In the past two years, more than 100,000 Australian homes have purchased or installed solar energy systems, but Australia is still lagging behind the rest of the Western world when it comes to renewable energy. There are up to five times more solar energy panels installed in Scottish homes, and 500 times more in Germany.

According to some estimates, each dollar saved from using renewable energy can be multiplied by 20 to calculate the value added to a property's price. For example, energy savings worth $1000 per year to your electricity bill might generate as much as $20,000 when it comes to valuing your property.

"I don't think there's a single person who hasn't heard of climate change or isn't worried about increasing electricity costs," says Paul Kramer, founder of Environment Australia, which offers eco-friendly education and training. "A lot of people are thinking, 'If I'm producing several tonnes of carbon every year and there are more than 22 million Australians doing the same thing, what can I do to reduce my carbon footprint?'"

He says there are many ways to make your home more eco-friendly, such as planting trees, insulating ceilings, recycling water, installing skylights, or energy-efficient light bulbs, and composting waste. Now, thanks to the government's Green Loans Program, Australian families can borrow $10,000 interest-free for up to four years to make eco-friendly enhancements to their homes.