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The Zone Verde Apartment Complex, Installed by SunRenu Solar
A few months ago, we asked Free Hot Water installers to share some of the projects that they’ve been working on. The first in this ongoing case study series comes from John McDonnell, President of SunRenu Solar, based in Scottsdale, AZ
Project: Zone Verde Apartments, Tucson, AZ, a 138 Unit Apartment Complex Number of Free Hot Water Collectors: 48 (8000 Series) Average monthly savings with solar thermal: $1,200/month
SunRenu installs both solar PV and solar thermal, and when Zone Verde managers initially considered solar, their initial thought was to utilize solar PV panels for offsetting the apartment complex’s electricity costs. But when they heard about SunRenu’s option for solar water heating, they changed their solar plans to installing a solar thermal system.
While having hot water included in a leasing agreement is an added value for renters, carrying the water-heating costs for a 138-unit apartment complex can be substantial. In the case of Zone Verde Apartments, an average of $1,800 per month, or over $21,000 annually went to towards water heating, reducing the building’s overall profitability.
Through the installation of 48 solar collectors and a 3,500-gallon solar thermal storage tank, Zone Verde is expected to save 67% on its annual water heating costs, or an average of $1,200 per month or more.
SunRenu chose Free Hot Water’s made-in-USA SRCC-rated 8000 series solar collectors, which will produce over 683,000,000 BTUs per year for Zone Verde.
Typically, the upfront costs of commercial solar thermal projects are reduced through a solar lease or solar power purchase agreement (PPA). However, in the case of Zone Verde, the owners self-financed. As a result, they directly captured all of the available solar thermal incentives.
Modified Accelerated Cost Recovery System (MACRS), a tax incentive that will also reduce tax-deductible expense of the solar system.
 In addition to the reduced operating expenses, Zone Verde asset managers say they’re attracting and retaining more renters through installing the system through its pro-active environmental efforts.
Free Hot Water 8000 series collector
“Zona Verde actually means ‘green zone,’ so installing the solar thermal system really meshed with what we’re trying to do at the property,” said Kuzi Mutsiwegota, Zone Verde’s Asset Manager. “We have a resident base that consists of responsible, serious college students, and over the years, we’ve been thrilled to see a substantial increase in our residents wanting to be a part of the ‘going green’ movement.”
As with all large commercial projects, Zone Verde did have its challenges. John and his team had to install the system on a multi-level flat foam roof. As a result, SunRenu had to build custom racking to raise and lower the collectors where needed, so that the system has a natural flow. The installers hand cut and fastened together each piece of racking, creating a structure that allowed the water to have natural movement toward the 3,500 gallon storage tank with built-in heat exchangers.
We asked John why he selected Free Hot Water for his solar collectors and other equipment, and he gave us a nice compliment. He said, “Dealing with experienced individuals regarding solar thermal is hard to come by these days. Some plumbing distributors don’t have the experience with solar thermal, so we know we can count on Free Hot Water for their support, as well as the quality of their products.”
Thanks, John! We’re always glad to help.
If you’re an installer in any state and have a Free Hot Water project you’d like to share with our blog readers, please let us know.
Arizona’s utilities all offer different—but valuable—solar hot water incentives for both residential and commercial installations. Of course, these are in addition to the Federal government’s 30% Investment Tax Credit.
APS – (Arizona Public Service)
Service area: The APS service area covers large part of the state, including parts of Phoenix, parts of Flagstaff, Parker, and Yuma.
Incentive amounts:
Residential: $0.50/kWh estimated first-year energy savings, based on OG-300 ratings, up to 50% of the system’s cost.
Commercial: Up to $0.68/kWh estimated first-year energy savings based on OG-300 ratings for small systems. For large solar thermal systems, customers can receive $0.41/kWh estimated first year energy savings, or choose a 10, 15 or 20 year production based incentive (PBI). However, like the residential incentive, incentives are limited to 50% of total system cost.
SRP (Salt River Project) – EarthWise Solar Energy Incentive Program
Service area: SRP services most of Phoenix, Mesa, Tempe, Paradise Valley, Fountain Hills, Scottsdale, Apache Junction, Peoria, Queen Creek, Avondale, Chandler, Town of Gilbert, Glendale, Guadalupe, and Tolleson.
Incentive amounts:
Residential: $0.40/kWh for 1st year estimated energy savings (based on SRCC rating)
Commercial: $0.40/kWh for 1st year equivalent energy savings. Maximum incentive is up to $350,000 per customer per fiscal year, and up to 60% of the individual total project cost(s)
Solar Pool heating, residential: Up to $350,000 per customer per fiscal year; incentive not to exceed 60% of the individual total project cost.
Solar pool heating, commercial: $0.25/kWh for first year metered energy savings savings (unglazed panels); $0.40/kWh for first year metered energy savings (glazed panels) up to $350,000 per customer per fiscal year. However, incentive is not to exceed 60% of the individual total project cost.
TEP (Tucson Electric Power) Renewable Energy Credit Purchase Program
Service area: City of Tucson
Incentive amounts:
Residential: $0.25/kWh equivalent, plus $750 up to a maximum incentive of $1,750.
Commercial Solar Water Heater: $0.50/kWh-equivalent, plus $750
The City of Tucson will also waive the permit fee for the installation of a qualifying solar system up to $1,000 for a single installation, or $5,000 for a subdivision or multiple project sites. However, plan review fees still apply.
(Note: Free Hot Water will be publishing TEP solar thermal case study next week.)
UES (UniSource Energy Services)
Service area: UNS Gas covers most of the Northern half of Arizona for natural gas service, including Flagstaff.
Incentive amount:
Residential solar water heating AND space heating systems: $0.50/kWh up-front incentive, up to $1,750
Small commercial solar water heating and space heating systems: $0.50/kWh up-front incentive, up to $200,000
Large commercial solar water heating systems: Performance-based incentive (unspecified)
Solar space cooling systems (non-residential only): The incentive for the thermal energy delivered for cooling (i.e., solar air conditioning) by a solar HVAC system is based on actual performance and ranges between $0.104/kWh-equivalent and $0.116.kWh equivalent. In addition, systems that incorporate solar thermal heating and/or solar thermal water heating are eligible for the large solar water heating PBI. Contact Free Hot Water for engineering a solar cooling system.
Note: The Trico Electric Cooperative – SunWatts Incentive Program has depleted its rebate funds for 2012.
On top of all of the above, there several Arizona state solar tax incentives for solar thermal systems:
All solar hot water equipment is exempt from sales tax.
Residential systems can receive a 25% of system cost state tax credit up to 1,000 maximum per residence.
Commercial systems can receive up to 10% of installed cost with a maximum tax credit of $25,000 for any one building in the same year and $50,000 per business in total credits in any year.
With all of the above incentives and rebates, it’s clear that Arizona is ripe for a solar thermal boom. The real challenge is to get the word out to consumers and business owners…as usual.
When installing solar hot water on buildings, sometimes the freight elevator is too small, and the building is too tall for a small crane. So, we found another way to the roof…
Free Hot Water is increasingly becoming known for our quality lines of solar collectors, tanks, and pump stations, and OG-300 systems. That’s the bread and butter of installing solar thermal, and we know that.
Yet, there are little parts, tools, and accessories that also make installing solar hot water possible—if not just easier—and we’d like to call your attention to the more useful tools and accessories in our online catalog.
Before we get into that, don’t forget our free online solar installer tools, such as our Free Hot Water Solar Collector Estimator. Enter a few quick inputs, and you’ll get an estimated number of needed flat plate collectors for just about any commercial project. We hope you’ll use this and all of our other online solar hot water estimator tools. It’s why they are there.
In terms of our Free Hot Water catalog, one of our most useful, effective, and affordable items is our helical flex hose that solar thermal installers use lieu of copper piping. Heat resistant to 804°F, assembly on site is quick and simple with a super heat-resistant 662°F graphite thread-assembly fitting. The insulation on the pipe is heat resistant to 356°F, UV resistance nylon cover. Of course, the helical corrugated flexible tube inside is approved by IAPMO, UL, and by the German and Korean standards, too. It really does make installing solar pipes simple—without compromising on quality.
Especially for commercial solar thermal applications, you need a reliable solar insolation and shade analysis tool. One of the most well respected solar site evaluation tools is the SunEye 210 all-in-one, handheld. It includes an electronic inclinometer, compass, optional integrated GPS, digital camera with fish-eye lens, and a “what if” editing feature, which allows evaluators to edit sunpath obstructions and add new scenario storage. This is great for projecting the potential of cutting back or eliminating trees or other sun obstructions. A very innovative, useful, and complete tool.
For more inexpensive little things that mean a lot, we strongly urge you to browse our selection of Weicon industrial adhesives, epoxies, lubricants, and sprays. These industrial grade products are manufactured in Germany and used globally in factories and industrial machine applications with extreme temperatures. So, they’re also appropriate for the extremes of relentless, high heat annual sunlight. From anaerobic adhesives to anti-seize solutions, elastic adhesives, and much more, these Weicon products just work. Even better, they’re useful for both general plumbing and solar hot water applications. Try one, and we’re confident you’ll become true believers in the entire Weicon product line—like we are.
Those are just a few suggestions. Our catalog also has a commenting system, so please feel free to give us your opinions on the above products or any in our entire catalog. We sincerely appreciate your feedback, and your fellow Free Hot Water solar installers will too.
When California funded the CSI Solar Thermal program in 2010, part of the funding included a carve-out for marketing the program and educating the public about solar hot water’s benefits to consumers and businesses.
That public awareness program is finally launching Earth Day. The first step was a media release that outlines the CSI Thermal program and its financial benefits. Read the release here.
The just-launched campaign also includes a website (www.waterheatedbythesun.com) and a quick commercial video that announces the initiative (embedded below).
At this point, the website is really just a portal to the individual utilities that are managing the CSI thermal program in the various areas of the State. In an easy three-stem process, website visitors identify their utility and the type of current water heating energy (gas, propane, or electric) that they are using. Those selections lead the individual to their utility’s specific information about how the CSI Thermal program is implemented in their utility, as well as eligibility requirements.
The video is brief, but well-produced, and can be added to anyone’s website via a YouTube embed code.  The video’s theme is “Meet the Next Step in Your Green Routine: Solar Water Heating!” Their message is that it’s now common for California consumers to turn off the lights, recycle, and do other green things, and now it’s time to make installing solar hot water part of that everyday “green” life too. Check it out:
There are four administrators (utilities) that are running the program. If you have specific questions about eligibility for your clients or for becoming a CSI thermal eligible installer, contact them at their respective emails below:
The California Center for Sustainable Energy (CCSE) in the San Diego Gas & Electric Company® territory swh@energycenter.org
Pacific Gas & Electric Company® (PG&E)  Solar@pge.com
Free Hot Water welcomes the program’s launch, and we hope California’s eligible CSI Thermal installers will quickly benefit from the new marketing program’s efforts.
Once again, California is leading the way for solar hot water with a new solar thermal incentive, this time for low-income single-family properties and multi-family dwellings.
Regular readers to the Free Hot Water blog are probably familiar with California’s CSI Thermal rebate program that was introduced 2010. It’s perhaps the most generous solar water heating rebate program in the United States, offering up to $500,000 for commercial properties and up to $1,875 for individual homeowners.
Now, California’s Public Utility Commission (PUC) has introduced another incentive that targets low-income housing and individuals. Called “The CSI-Thermal Low-Income Program”, the goal is pretty self-explanatory.
In terms of numbers, the low-income program provides customers of Pacific Gas and Electric Company (PG&E), San Diego Gas & Electric (SDG&E), and Southern California Gas Company (SoCalGas) with up to $3,750 in rebates—double the regular rebate.
For multi-family dwellings, such as apartment buildings, nursing homes, and assisted living homes, owners can receive up to $500,000. The top figure differs from the regular program in that owners will receive a 50% higher rebate for the natural gas displaced by the solar system.
Therefore, while the maximum amount is the same, a 10 collector solar thermal system under the low-income CSI thermal program is going to receive up to $19.23 per Therm displaced, whereas the same 10 collectors will receive up to $12.82 per Therm displaced in the regular CSI Thermal program.
Those are the highest rates. As the program grows and more installations come on line, the rebate amount will decrease for both programs, and, in theory, so will the price of installing solar water heating systems. (You can keep track for the current CSI Thermal rebate level here.)
Of course, there are substantial requirements for properties to qualify under the CSI Thermal low-income program. You can download a summary of the eligibility requirements here.
On top of the new rebate, owners of low-income rental properties—whether single family rentals or mult-family—are also eligible for the Federal government’s 30% investment tax credit (ITC).
While the application process may be complicated, solar thermal systems are not. To help simplify the installation process even more, Free Hot Water has created multiple pre-engineered solar thermal systems for both homes and multi-family systems that that will meet all of California’s CSI thermal equipment standards.
Combined, these Federal and state financial incentives should help to inspire more solar hot water installations in California, which still lags behind PV. In fact, the traditional CSI Thermal program began in the fall of 2010, and the program still hasn’t burned through its top rebate step. So, there’s still plenty of work to do to get the solar hot water word out.
Confused? Questions? Always feel free to contact us at info@freehotwater.com. We’ll help as best we can.
Progress Energy, a Raleigh, NC-based utility, has completed a previously announced study showing that its residential customers could save $235 a year, or 63% of the water heating portion of their electric bill. The utility also offers commercial solar thermal incentives, as well.
Few people beyond solar thermal advocates realize that heating water with an electric hot water tank is tremendously inefficient, wasting both energy and money. So, it’s great to see a utility (in cooperation with the North Carolina Utility Commission) conduct a study on solar water heating savings.
The pilot program and study gave 150 Progress Energy customers a $1000 rebate toward the cost of buying a solar hot water heater. (Other North Carolina utilities currently offer cash rebates between $400 and $850 for residential solar thermal systems.) Progress estimated that over 15% of a typical home’s electric bill is used for heating water.
The costs of installing the solar thermal systems averaged $7,271 per household, ranging from $4,000 to $12,375 per home. However, that was before rebates and other incentives.
In addition to the $1000 rebate from Progress, homeowners also qualified for the 30% federal investment tax credit (ITC) and an additional 35% state tax credit of up to $1,400, which reduced the overall solar installation cost by about half.
While the Progress Energy’s residential pilot program has currently expired, Progress is still offering commercial solar water heating cash incentives. The utility will pay $20 for each renewable energy credit (REC) generated by the solar water heating system for a period of 10 years.
One REC represents one megawatt-hour (MWh) of avoided solar electric costs. To be eligible for the incentive, rooftop-mounted solar water heating systems must be installed in North Carolina (or South Carolina) on commercial property owned by a non-residential customer of PEC, and must have between 1,200 and 4,000 square feet of collector area (roughly 30 to 100 solar thermal panels). Solar thermal power purchase agreement (PPA) providers are also eligible.( North Carolina’s Duke Energy utility has a similar solar thermal program.)
Those generous incentive means that North Carolina apartment buildings, hospitals, hotels, and nursing homes are ripe for solar hot water installations.
To recap, a North Carolina utility study shows that North Carolina residential solar hot water heaters are cost effective, especially for solar electric customers. In addition, commercial customers can still benefit from cash incentives provided by Progress Energy.
If you have any questions about these programs, please contact us at Free Hot Water, and we’ll be happy to help.
We’ve written about Eneref Institute’s solar hot water advocacy and information initiatives before. Recently, the organization announced that it is moving into the second phase of its “Solar Thermal Advantage” initiative, which is designed to promote the benefits of solar water heating and solar cooling to the trade media.
The initiative will specifically focus on promoting solar thermal heating and cooling case studies. Free Hot Water launched a similar company initiative last month for our installer partners, so we’re clearly on the same page and support Eneref’s efforts.
The bottom line is that successful solar hot water projects are out there, but they aren’t seen or written about. The more the media, public, and policy makers learn about the advantages of solar water heating, the more customers and policy makers will see its value and support it.
In its press release, Eneref’s Managing Director, Seth Warren Rose, explained that many news editors he speaks to about solar thermal are unfamiliar with both the technology and the brands. He said, “We’re working on educating the media about the various brands and about the tremendous benefits of solar heating technology, so that in time, the press will reach out for these stories without our help.”
Another part of the second phase involves a new website devoted to solar thermal projects. Eneref has just launched www.shc.eneref.org, which features successful case studies demonstrating the benefits of using the sun’s energy for heating and cooling applications. A promotional effort for the website is supposed to begin in the second quarter of 2012.
Solar heating installers and manufacturers are invited to submit their case studies online, at www.casestudy.eneref.org. Free Hot Water plans to contribute, and we hope that our customers will contribute their Free Hot Water projects there, as well.
In addition to Eneref’s efforts, if you’d like to publicize your installations through Free Hot Water, please send the same materials to solarfred@freehotwater.com. We’ll also do our best to spread the word on our blog, email, and potentially RenewableEnergyWorld.com, as well.
Once again, the more we celebrate and promote the value of solar hot water in the United States, the more we will grow our businesses, while contributing to clean air, clean water, and to our nation’s energy independence. Please join our collective solar thermal efforts.
Every year, Free Hot Water provides our customers and consumers with links to the three main IRS tax forms used to apply for the 30% solar investment tax credit. The three main 2011 IRS solar investment tax forms are below, as well as some basic tax guidance for consumers and businesses who have installed solar PV and solar water heating systems in 2011.
IRS Tax Forms for Solar and Energy Efficiency Tax Credits
Here is the 2011 IRS Form 5695 for residential systems. Submit it with your 2011 taxes (by April 17, 2011).
On the 2011 1040 form, the residential energy tax credit (from Form 5695 above) is claimed on line 52.
As discussed in previous years, there can be some confusion about how to apply the 30% solar investment tax credit. Some customers multiply the 30% by the gross cost of the installed system, while others calculate the 30% times the cost after the cost of any state or utility rebate has been subtracted.
So which formula is correct? The answer depends on whether you’ve bought your solar system as a business or a homeowner, or whether or not you’ve directly received any rebate cash.
To clarify, below is another recap of what we know. However, please confirm all of this with your own tax consultant. We’re basing this information on guidance from the Solar Energy Industry Association (SEIA).
For Businesses
If you are a commercial business that installed a solar system in 2011, you must calculate the 30% from the gross amount before any state or a utility rebates. However, as a business, you must also report any rebate amount received as income.
Thus, any rebate money received by the state must be reported and will be taxed at the prevailing rate.
For example. If your gross solar thermal or solar PV system cost is $50,000, you will receive a $15,000 tax credit that you can use toward paying your Federal income taxes. If you received a $5,000 state rebate, that must also be reported as income.
This $15,000 in the above example is not a tax deduction, but a tax credit. Think of that $15,000 as if you’ve received an IRS Gift Card that you can use toward paying your next tax bill.
Tax credits are thus far not refundable, however, so if you owe less than $15,000, as in this example, the remaining solar tax credit can be carried over to the next quarter’s tax bill.
For Homeowners
If you are a solar water heating homeowner, you must calculate the solar 30% Federal Tax Credit after deducting any State or Utility rebates. Perhaps this sounds unfair, compared to businesses, but wait. Here’s the bonus:
Residents don’t have to report any State or utility solar rebates as income. Instead, it is viewed as a “reduction” in cost. That’s sort of like a sale, but not really.
For example, if your solar hot water or solar thermal system cost $5,000 installed, and then you receive a $2,000 rebate, then your “tax basis” would be $3,000. Thus, your Federal tax credit would equal $900 (30% x $3000 = $900.)
As with commercial systems, this $900 is not a tax deduction, but a tax credit. So it’s as if you’ve received an IRS Gift Card of 900 bucks that you can use toward paying your tax bill.
However, tax credits are not currently refundable, so if you owe less than $900 in this example, the difference can be used toward the next quarter’s tax bill.
Other things to keep in mind:
Whether you’re a home or business, you can only claim the 30% Federal Investment Tax Credit for the year that your solar was “placed in service.” In other words, you should claim the tax credit for the 2011 tax year if your solar system was up and running in 2011. If you got it installed in February 2012, then the tax credit must be filed with your 2012 taxes…unless you’re filing for a 1603 Treasury Grant in lieu of the investment tax credit. Read on…
The1603 Treasury Grant Program has expired as of December 31, 2011. Commercial businesses may be eligible to receive this grant (cash!) instead of the investment tax credit. Home owners do not qualify, but businesses do. More info about grant qualifications here and safe harbor provisions here, if you haven’t completed installation by the end of 2011.
Solar advocates in Congress are attempting to revive the Treasury Grant Program. As of March 14, they’ve been unsuccessful, but they are continuing their efforts.
Business may also qualify for other tax benefits, such as Modified Accelerated Cost-Recovery System (MACRS) + Bonus Depreciation (2008-2012). Under this program, federal Modified Accelerated Cost-Recovery System (MACRS), businesses may recover investments in certain property through depreciation deductions. The MACRS establishes a set of class lives for various types of property, ranging from three to 50 years, over which the property may be depreciated. Currently under the MACRS, solar electric and solar thermal technologies, including solar hot water systems, are classified as having a 5-year life, allowing the recovery to be captured over a 5-year schedule. Once again, the solar water heating system (or other eligible technology) must have been “placed in service” between 2008 and 2012.
Don’t forget that you may qualify for city, state, or utility tax benefits too. The best resource to confirm these tax breaks in your state are at http://www.dsireusa.org/solar.
We hope this information helps, however, please remember that we are not tax advisers, so always consult with your tax expert before applying the above.
Regardless of the tax breaks, we want to thank you for going solar. Please share this information with your friends and other businesses associates.
The lack of competition for solar water heating services in California is startling. Despite the rich solar thermal rebates that are available in California—and other states—there are few installers who can legally use them and collect the rebates.
In fact, according to the California Solar Initiative (CSI), there only 374 contractors in the entire state that can install solar thermal heating and cooling solutions and are eligible to receive a CSI Thermal rebate.
For the sake of comparison, according to CSI stats, there are 2,244 eligible solar PV contractors in the state–exactly 6 times as many installers. Consequently, of the millions of homes and businesses in California, there’s a huge opportunity for solar hot water installers to capture the market.
To graphically show the opportunity, let’s look at a map of eligible installers in Los Angeles and San Francisco.
There are 10 million people in the L.A. area with hundreds of thousands of homes and apartment buildings that have sunny roofs that are ripe for solar hot water. But just look at how little competition there is for the L.A. solar hot water market:
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San Francisco installers are grouped together more closely, but clearly there is still very little competition for such a huge metropolitan area.
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So, what’s going on here? Why so few solar thermal installers, despite the CSI thermal program and solar hot water being eligible for the 30% Federal Tax Credit?
First, like many good opportunities, awareness of the opportunity is key. Heating and plumbing contractors are the best equipped to enter the solar water heating business, but they aren’t aware of the lack of competition. As manufacturers and distributors, we need to do a better job at showing them the market opportunity, and we hope this blog post is a start.
Second, training is a factor. Trades people in the plumbing, heating, or solar PV business need local access to solar hot water training. Free Hot Water is helping with this aspect by offering an occasional introductory class for just $25.00. We also offer more extensive solar hot water classes through Boots on the Roof.
Third, the actual solar thermal market is still weak. For various reasons, including financing, homes and business consider solar PV before considering solar thermal solutions. That preference is despite the fact that apartment buildings, hotels, hospitals, and nursing homes use huge daily volumes of solar hot water that will significantly reduce their water heating bills—even without generous incentives.
Once again, the solution is better solar thermal marketing and awareness. Under the CSI Thermal program, a portion of the allotted funds is supposed to be directed toward consumer awareness. We hope that these funds are actually being used aggressively today… and tomorrow.
What’s your opinion? Why aren’t there more solar thermal installers? Please let us know your thoughts in the comments section below.
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In terms of our 
Especially for commercial solar thermal applications, you need a reliable solar insolation and shade analysis tool. One of the most well respected solar site evaluation tools is the 
could save $235 a year, or 63% of the water heating portion of their electric bill. The utility also offers commercial solar thermal incentives, as well.
We’ve written about
