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We hate to be the bearer of solar bad news…. So, first we’ll be the bearer of solar hot water good news!
In the great state of Idaho, the Questar gas utility has just launched a new residential and multifamily incentives for installing solar water heating systems.
Customers of Questar who have a current gas backup water heating system will receive a maximum $750 rebate. Unlike many solar water heating rebates, the Questar rebate can also be applied to solar pool heating. On top of that, customers can also receive the 30% Federal Investment Tax credit (ITC); however, this Federal incentive will only apply for home water heating, not for the pool heating.
The only other requirement is that the system needs to be SRCC OG-300 rated. As it happens, Free Hot Water’s OG-300 lines are all on the utility’s list of qualifying OG-300 systems. Go figure.
As for Texas, well that’s the bad rebate news. Solar hot water installers have until December 9, 2011 to complete all installations and submit paperwork to be eligible for an Oncor Electric rebate. The program is no longer accepting any more applications and is being discontinued for 2012.
That’s a significant incentive loss for Texas businesses and residents that heat their water through electric water heating tanks. The incentive gave customers between $1,400 and $2,700 for an OG-300 installation, while commercial entities could receive up to $6,500 for larger OG-100 systems.
Federal incentives, such as the 30% Federal ITC, still remain in effect, but once again, this incentive can only be applied to residential or commercial solar water heating applications, not for pool heating.
We urge Oncor to consider refunding this program, since electric water heating is an expensive and inefficient way to heat water.
“The Story of Broke” is the latest in a series of clever animations from the “Story of Stuff” project, developed by artist and simple living author and activist, Annie Leonard.
In the past, Ms. Leonard has done short animated videos about The Story of Stuff, about America’s obsession with stuff that we throw away; The Story of Electronics about what happens to our old electronics that we throw away, as well as another clean energy favorite, The Story of Cap and Trade; and more.
In her latest video, The Story of Broke, below, Ms. Leonard takes on the oil, gas, and nuclear folks and shows how they’re a source for why America is broke, which includes the hidden and not so hidden subsides we keep doling out to the oil, gas, and coal companies. She then highlights how solar and other renewable energy technologies can be job creators today and for our future.
We urge you to watch this video and share it with your friends and other social networks. Thanks.
The 1603 Treasury Grant Program (TGP) is set to expire at the end of 2011, although it is still uncertain whether Congress will renew the program for another year or longer. Cross your fingers.
For those unfamiliar with the 1603 program, it is a law that was passed at the end of 2008 as part of the original economic stimulus bill. The 1603 provision essentially allowed commercial companies to receive a cash grant of 30% of the cost of a commercial solar PV or solar thermal system instead of the 30% Federal Investment Tax Credit (ITC) – also part of that law.
This cash grant was a huge help to large scale solar developers, who would normally leverage the 30% ITC to finance their solar projects. Keep in mind that a tax credit is like an IRS gift card: It can be used to pay one’s taxes or a portion of taxes. Profitable banks, venture capitalists, and tax equity investors loved these credits to offset their very large tax bills. However, with the economy struggling, there were relatively few tax equity partners who could actually use the tax credits. Instead, banks and investors wanted to hold on to their cash on hand.
Enter the 1603 cash grant, which re-opened the doors to large scale solar financing. Now, investors and developers could immediately recoup their 30% incentive in cash, rather wait to use the 30% ITC to pay their taxes—if they owed taxes. If the company owed no taxes, the 30% ITC was not refundable; rather, the unused balance could be used towards paying corporate taxes for up to 5 years.
The other advantage of the 1603 was that financiers could use the grant to help fund solar PPA and solar lease projects, making it easier for businesses to go solar with little to no upfront payment.
As expected, the 1603 is widely credited for the large scale and solar boom in recent years. A recent report from SEIA projects that with another extension of 1603 in 2012:
An additional 37,000 jobs would be supported by the solar energy industry in 2012, a 12% increase over baseline.
18,000 will be directly employed by solar companies or indirectly employed by firms that support the solar industry.
An additional 19,000 jobs would be induced by the industry’s economic activity.
Remember that 1603 is not just for solar PV. Developers of commercial solar hot water applications are also eligible for the grant. That means apartment building owners, restaurants, hotels, hospitals, laundry facilities, condominiums, private colleges, and other industries can utilize the program…at least until the end of the year.
So, will Congress act to extend the program? At this point, nothing is certain in the halls of Congress, but sources at SEIA tell Free Hot Water that they are “optimistic” that there will eventually be an extension.
The tricky part is packaging the 1603 extension with some type of bill that must be passed by both houses of Congress, such as a military spending bill or a general government funding bill. These bills don’t come along often, but they do come.
So, keep those fingers crossed that the 1603 gets into one of those bills sooner than later. Couldn’t hurt.
The latest SEIA/GTM Research U.S. Solar Market Insight report is out, and it includes news about California, Massachusetts, Hawaii, Arizona, and Maryland. Here’s a summary of the report and a bit of our own perspective.
Arizona. Arizona’s solar hot water market remains quite strong, according to SEIA/GTM, with most utilities offering production incentives that can cover up to half of a system’s costs. Nice. SEIA’s report is projecting that Arizona will be a leading market by the end of 2011. We’re crossing our fingers for our Free Hot Water dealers in Arizona. Of course, if we can help with engineering or components, please let us know.
California. The up to $1,875 incentive for residential and $500,000 for commercial and multi-family structures are still available here in California, and that’s good and bad. It’s good because California solar hot water installers still have generous incentives to offer customers. On the negative side, the incentive availability also says that consumers and commercial customers are still hesitant about investing in solar hot water.
In our view, the CSI administrators and CALSEIA need to provide more consumer awareness and education for solar hot water. Free Hot Water is doing our best to get the word out, but we can’t do it alone.
Hawaii. The Hawaiian residential solar water heating market came back to life in Q1 2011 thanks to a residential solar thermal rebate of up to $1,500 per OG-300 system. And then… the rebate was subsequently reduced to $750 per system.  However, due to Hawaii being 100% dependent on imported fuel from the U.S. mainland, solar hot water still remains an attractive option for homeowners, so sales are still strong. Speaking of OG-300 systems, Free Hot Water has three new OG-300 lines with just-reduced prices, making solar hot water systems even more cost effective for Hawaiians and our partner installers there. He mea iki. (You’re welcome.)
Maryland. As Free Hot Water reported a few months ago, Maryland is now allowing solar water heating systems to generate SRECs (Solar Renewable Energy Certificates). However, only new systems installed after June 1, 2011 qualify. Second, only SRECs generated after January 1, 2012 are eligible.  SEIA’s analysts are saying that this policy won’t do a hell of a lot for Maryland’s solar water heating market, but they note that other Eastern states may follow Maryland’s lead, and that could grow the overall Eastern U.S. market significantly.
Massachusetts. In 2010, Massachusetts launched a pilot solar water heating rebate program with a generous $3,500 maximum rebate for a residential systems and up to $65,000 for commercial systems. Rebates are based on the number of collectors in the system and their SRCC ratings. (FYI, Free Hot Water’s SRCC ratings for our collectors are available in our online catalog.) We’re rooting for Massachusetts to continue and expand the program. The state has grown tremendously with solar PV installations, and we hope the state adds solar hot water to its aggressive cleantech growth.
That’s the latest update from SEIA/GTM Research. These updates come out quarterly and cover the entire solar industry. We’ll sum up the solar water heating side and add our own perspective as each report comes out. If you’d like to read the entire executive summary report, click SMI-Q2-2011-ES (pdf).
Free Hot Water often receives questions from people just starting to enter the solar business. One question that comes up is the correct way to measure insolation.
What’s insolation? It’s basically a measurement of the amount of sun that’s expected to hit your solar site over the course of the year. An important part of that calculation is what’s not going to hit your solar collectors. In other words, shading.
A proper shade analysis is especially important in the solar PV (electric) world due to the complications of the inverter. However, a shade analysis is equally important for solar hot water—and by important, we mean monetarily, as well as technically.
In both solar electric and solar water heating installations, your insolation and shade analysis play important roles in calculating most state rebates. If the city inspects your system post-installation and finds you’ve guestimated these figures or performed and submitted a faulty site survey, your client (and you) may receive a lower state rebate unless fixed.
Of course, performing another survey and resubmitting your plans may also cost you fees and time, frustrating yourself and your client. Consequently, a bad insolation/shading survey costs money and time, and it also reflects poorly on your solar installation skills.
The good news is that there are several accurate insolation measurement tools on the market today. Some are low tech, like the Solar Pathfinder. With this tool, you’ll still have to do some manual calculations and have a few more steps to integrate with your site plans, but it does work, so long as you follow their directions. It’s also a bit bulky.
A more compact and automatic option is the Sun Eye 210. It’s the only site evaluation tool we carry at Free Hot Water. The reason? It’s simple, it’s largely automatic, it’s accurate, and it works.
The Sun Eye is a handheld electronic solar tool that includes an electronic inclinometer, so it recognizes and can record your exact height when you’re on that roof. There’s also an electronic compass, automatically revealing your orientation and accounting for magnetic North.
Perhaps the most convenient feature is the Sun Eye’s digital camera with a fish eye lens that snaps a digital photo of your entire solar site, including all of that important shading data. And if you really want to make it ultra-simple, there’s also an optional integrated GPS, saving you the hassle of looking up your site’s exact longitude and latitude, as well other relevant location data.
Of course, all of this sunny data is transferable to Sun Eye’s included companion PC software, which can edit and export into great looking professional reports.
What ever tool you use, we urge you to read the instructions and practice before using the data for a genuine site survey that you submit with your permitting plans. The city and your customers will thank you.
At the end of 2010, Congress passed and the President signed into law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. As part of this law, the U.S. Department of Treasury – Renewable Energy Grants program, sometimes referred to as “Section 1603” program, was extended for 2011.
So, what is this grant program and who can benefit from it? We’re going to do our best to give you the basics, and hopefully you can use resources below to apply—if you’re eligible.
What is it? As part of the original stimulus packaged passed in 2009, “Section 1603” allows commercial businesses to receive a 30% cash grant from the Feds instead of the 30% Federal Investment Tax Credit. (See prior blog post about the 30% solar ITC.) Essentially, the 1603 program allows for-profit businesses to receive a 30% refund off the gross cost of their solar system.
Who is eligible? The provisions are fairly broad—for businesses. That is, you can’t get this 30% solar grant if you’re a resident, a non-profit, or a government entity. You’ve got to be a business that pays taxes, though it doesn’t mean you have to owe taxes. Quite the opposite. Unlike the 30% investment tax credit, you actually get a check from the Feds, not just a credit that you can use towards paying your taxes.
For potential solar hot water customers, this means that you can own a hotel, apartment building, Laundromat, nursing home, for-profit hospital, car wash, and qualify for this 30% cash-back program from the Feds. On the other hand, if you’re a residential homeowner, a school, college, or non-profit hospital, for example, you will not qualify. However, if you own a single family rental home under an LLC or Inc. and want to provide solar water heating for your tenants, that will qualify. Also, if you are a real estate developer with multiple single family homes, purchasing a residential solar water heating system for each home will also qualify for the cash grant.
What kind of solar system is eligible? Pretty much, any solar system can be reimbursed except for solar pool heating and passive solar construction. So, if your for-profit business wants to heat or cool the building with a solar thermal system, now’s the time. Naturally, solar water heating is also eligible, as well as solar electric systems.
By when do I have to have solar system installed? Your solar system needs to be installed sometime between 2009 and the end of 2011. They’re also allowing construction on the system to have begun by 2011.
Grant applications must be submitted by October 1, 2012, however. The U.S. Treasury Department will make payment of the grant within 60 days of the grant application date or the date the property is placed in service, whichever is later.
Can I get the solar 30% 1603 cash grant AND the 30% Investment Tax Credit too? No. It’s one or the other, and don’t even think about trying to do both. The IRS knows all. However, you are still eligible for any local or state rebates, so that’s nice. Also, you can receive any other local or federal tax benefits (other than the 30% investment tax credit.)
“How much?” That’s perhaps the most frequently asked question in the solar business. Customers are always asking about the cost first and the technology, quality, and durability later. Okay. Fine. We get it. So, that’s why Free Hot Water has introduced a new solar thermal cost estimation tool.
Although solar thermal rebates change often in all 50 states and Puerto Rico, we receive state update news almost every week, so we’ll keep our rebate and incentive numbers as up to date as possible, give or take a few days.
Among the calculated data in our new estimation tool, you’ll receive these “bottom line” solar hot water cost figures:
Solar Thermal System Price (est.)
Estimated Installation Cost
State Tax
Total System Installed Value
State Rebate
Federal Tax Credit – (30% of installed cost)
Possible 179 Deduction*
Federal Tax on State Rebate*
Possible MACRS State Depreciation*
Total Estimated Net Cost
Estimated Annual Savings $
ROI (Return on Investment) Years
* Check with your accountant
Please keep in mind that the final estimated cost figures in our calculator are customer retail numbers. Your labor and final costs will be less as one of our partner installers, so sign up now if you aren’t one already.
On the same web page, you’ll also find several other new solar installation calculators. Once again, Free Hot Water wants to make your engineering, installation and sales process easier, so we’ve created the following new calculators:
The swimming pools and Jacuzzis are in constant need of hot water.
In the past, water-heating costs were just the cost of doing business. You had to pay your gas utility bill, and that was that. Today, California Fitness Centers have a new and very cost-effective solution: Installing solar hot water.
Below is a real-life example of a solar hot water installation at a California fitness center that pays an average of $2,200 a year in hot water costs, excluding the pool heating costs. (At this time, the pool heating portion of hot water costs is not eligible for state and federal solar rebates.)
Thanks to Federal and state incentives, the payback time is in 5.45 years—and remember that solar hot water systems can last 25 years or longer with very little maintenance. So after year 5.45, this fitness center is benefiting from ….Free Hot Water
Solar Hot Water Cost and Savings Example for a California Fitness Center
Utility
PG&E
Minimum Daily Demand @ 80% BTU
340,031
Est. Water Storage Requirements
330 Gallons
# of Free Hot Water 7000 collectors:
12 panels
Roof area required:
91 sq. ft
Est. gas bill for hot water before solar:
$2,200
Est. Cost before rebate, incl. engineering
$40,000
Estimated California Rebate:
$ -16,000
Estimated 30% Federal Tax Credit:
$ -12,000*
Estimated Net System Cost:
$12,000
Estimated Payback time:
5.45 yrs!
CO2 Saved from the environment over 25 years:
200 Metric Tons
* Modified Accelerated Cost Recovery System (MACRS) in 5 yrs may be available and is not included in the ROI calculations. Please consult with your tax attorney as for your eligibility.
This is just one example of a fitness center chain that has 4 locations. But just think:
There are over 400 24-Hour Fitness Center facilities nationwide. If each installed a similar system to the one above, the chain would at least remove 3,200 metric tons per year of CO2, or 80,000 metric tons of Co2 over 25 years!
There are over 600 Gold’s Gym locations. If each of them went solar hot water, they would pull about 4,800 tons of CO2 per year, or 120,000 tons over 25 years.
If Bally’s Total Fitness Centers made all of their 400 locations solar hot water, they would also save 3,200/year or 80,000 metric tons over 25 years.
And we didn’t even mention the utility cost savings–which will vary in every state and location.
Every fitness center has different needs, which means that the above example is only accurate for this particular installation. There are many reasons why systems must be custom designed:
Some fitness centers have pools, and even then, different size pools that are kept at different temperatures.
Every fitness center has a different number of showers
Every fitness center has unique number of members who typically take showers.
Some fitness centers use a laundry services instead of washing their own towels.
Laundry machines are also different. Some use more or less hot water.
We haven’t even talked about solar specifics, such as the type of roof , shading, and sun hours in a particular area.
The good news is that while the above case study may not apply to you, solar hot water installers always offer a free estimate for solar hot water system that is tailored to your needs.
Questions? Please contact us. Our consultants will help determine if solar hot water is right for you.
Many times in this blog, we inform our readers about solar hot water subsidies and tax breaks. Well, some people comment to me that solar should stand on its own and shouldn’t be subsidized…except what about all of the oil and gas and coal subsidies?
And yet, a number of people say that solar shouldn’t have subsidies, and that the technology should stand on its own and that the government shouldn’t be supporting solar subsidies. My answer to that is this: fine.
That is, I understand the concern that tax payers shouldn’t subsidize a relatively new energy technology and that the market should determine price.
However, if you’re going to play that free market game, then it’s only fair that oil, coal, and gas companies play by the same rules, right? Therefore, oil, coal, and gas companies shouldn’t get subsidies either, and boy do they get subsidies.
FACT: From the New York Times: “According to the most recent study by the Congressional Budget Office, released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9%, significantly lower than the overall rate of 25 % for businesses in general and lower than virtually any other industry.”
And with oil’s windfall, low-taxed profits since 2008, when oil prices sky rocketed, talk about a subsidy! But let’s dig further.
FACT: Also mentioned in the same article is the fact that the oil and gas industry spent $340 million on lobbyists since 2008, according to the nonpartisan Center for Responsive Politics, which monitors political spending.
FACT: According the Environmental Law Institute study, between 2002 and 2008, the coal and oil companies received $72 billion over the seven-year period, while subsidies for renewable fuels totaled only $29 billion. That’s 3.5 times as much. But we can dig even further…
FACT: President Obama’s 2011 fiscal year budget proposal sent to Congress calls for eliminating more than $2.7 billion in tax subsidies for oil, coal and gas industries. If passed, U.S. Tax payers will save (not give oil companies) 38.8 billion dollars.
I don’t get it. Why should we be subsidizing technologies that have been around for 100 years? Shouldn’t the oil and gas industry “stand on its own” and let the free market decide the winners and losers?
So, yeah, solar needs subsidies to encourage Americans to change their minds and break from the coal and oil status quo. But if you want to talk about solar’s high cost, then one wonders how much coal and oil would really cost without American tax payers subsidizing their dirty-air profits.
One last dig into coal and oil costs:
29 miners lives were lost in the Upper Big Branch Mine disaster in 2010.
Another 11 lives were lost in the BP oil explosion.
Thousands more lives have been lost in similar fossil fuel energy accidents in the last 100 years.
There has never been a single day in recorded history when so many lives were lost to solar technology in one day in a single event, and I doubt there ever will be.
Photo: Flickr:/SteveCadman Solar Hot Water Apartment Building
Solar thermal systems have been around for over 100 years and remained a cost effective alternative to gas and electric bills around the world…. except the U.S. The bust and boom of solar incentives in the 1980′s decimated the U.S. solar hot water industry, but after 30 years, solar incentives are back…. at least for now.
Recently, a number of states have implemented solar hot water incentives for businesses, such as hotels, apartment buildings, restaurants, laundry mats, car washes, etc. Each state has its own policy and every business has different needs, so the net costs will vary. Use our solar thermal cost estimator to find out your costs, or check out a sample of commercial solar thermal rebates in these states, below.
Arizona: Commercial buildings are eligible for a 10% tax credit of up to $25,000 for one building, or an aggregate of $50,000 per customer in one year. The Phoenix based APS provides a performance based rebate, which can range between $0.051/kWh-equivalent and $0.07/kWh-equivalent, up to 50% of total system cost. Other utilities in Arizona have their solar water heating incentives, as well.
California: Natural gas heated commercial or multifamily buildings up to $500,000 towards the cost of a solar thermal system.
Hawaii: State rebates for commercial installations add up to $125 per deferred kW, plus $0.05/kWh for retrofits. In addition, businesses can receive a state tax credit of 35% of the actual cost or $250,000, whichever is less. Hawaii businesses also get a 100% real estate tax assessment exemption for the new solar hot water system. Your business may also qualify for specific utility rebates as well, such as Kaua’i Island Utility Cooperative (KIUC) which pays for 50% to 80% of equipment costs.
Florida: In Florida, commercial buildings and apartment buildings receive 15 per 1,000 BTU/day for solar hot water installations, up to $5,000. In addition, Florida has long exempt any sales tax for solar thermal systems.
Texas: Businesses get a 10% corporate tax deduction based on amortized cost. All Texan companies are also free of any property tax assessment from the new solar hot water equipment. In addition, each utility has their own rebate program.
Pennsylvania: Pennsylvania’s new Sunshine solar program provides businesses a rebate up to 25% of installed system cos, to a maximum rebate of $20,000.
Maryland: The Maryland Energy Administration (MEA) is giving mid-size commercial and industrial companies a solar hot water grant of 15% of installed cost up to $25,000. The solar thermal system must be at least 100 square feet in size. Businesses may also qualify for an additional state rebate of $2,000.
The Federal Government. Finally, in addition to all of the above, the U.S. government provides all businesses a 30% Federal Investment Tax Credit that is calculated before any state or local incentives, but subject to being taxed as income.
America is finally becoming serious about incentives for solar thermal systems for businesses. However, please keep in mind that these incentives are always subject to available funding. Sometimes utilities or states run out of rebate money due to high demand. Check with a local free hot water installer to find out what programs are currently available in your area.
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