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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.
It’s not much, but SEIA and its partner, GTM Research, have included some very general solar water heating market information in its 3rd quarter executive summary.
Free Hot Water has talked to GTM researchers before about the lack of solar water heating data in their reports. They explain that there are two problems:
First, not enough solar installers are willing or able to give them enough data to create a report. So, if you’re a solar water heating installer or financier or manufacturer who’d like participate, please contact me at solarfred@freehotwater.com, and I will connect you with the person who collects data.
The second problem is a little more challenging. That is, it costs money to produce these reports, and despite the number of installers and solar thermal distributors and manufacturers in the U.S., few want to shell out the money for the full report.
As our CEO Paul Burrowes commented a few months ago at Intersolar, there’s little need for solar thermal install data. Why? Because there is such huge untapped potential. Every roof is a market opportunity, and, sadly, there are plenty of empty roofs in the U.S. that are ripe for solar heating and cooling.
Nevertheless, there is a lot of press around these reports, and it would benefit the U.S. solar thermal side to be included in those releases. But without data, that’s not going to happen. So, we hope, with your participation, that the industry can receive and process more data for these quarterly reports.
So, what third quarter data was in the latest 2011 3rd quarter executive summary?
It was only about three paragraphs, one of which was summary of previous data. Here’s a link to get the full executive summary.
In any case, the main points:
Solar Thermal PPAs are growing for commercial solar projects.
Massachusetts has a pilot project that is allowing $30,000 construction grants for commercial solar thermal.
European and Chinese solar thermal manufacturers are increasingly showing up at solar trade shows, increasing competition, and….
“The main competitor to SWH, however, is the price of natural gas. For as long as the price of natural gas remains low, it is difficult for many to see the long-term value in installing a system.” (A recent Free Hot Water blog post mentioned this insight too.)
So nothing really new here, but we do believe that the increase in solar thermal PPA financing will indeed make commercial solar thermal competitive for apartment buildings, multifamily homes, hotels, hospitals, etc, and beat low natural gas prices.
And when that happens more often, we look forward to more in-depth coverage about solar water heating in these quarterly reports.
There is no dispute that solar PV has grown faster than solar thermal in the United States. Why? I think there are three basic reasons.
1) More and better financing for PV than solar thermal
Banks and venture capitalists have loved solar PV for quite some time, and the reason is that solar PV projects are profitable with solar power purchase agreements (PPAs).
Solar PPA’s for solar PV are a win-win. They provide low-upfront costs to the customer while also reducing energy costs. At the same time, banks and financiers are able to recoup profits over time by capturing all of the available solar incentives, plus charging the customer a discounted rate for the power that they consume.
What’s odd is that solar thermal applications have not attracted the same win-win attention from banks and finance people. Just as with solar PV, it’s possible to meter and measure solar hot water production and reduce the gas utility bills of large commercial applications, such as hotels, condos, apartment buildings, hospitals, laundromats, nursing homes, and so much more.
The bottom line is that bankers and other financiers need to become better informed about solar thermal applications, economics, and to develop more ways to finance projects.
2) More and better subsidies for PV than solar thermal
Clean solar energy is clean solar energy, and yet governments seem to be more amenable to subsidizing solar electric clean energy than solar water heating applications. If you run down the list of all of the subsidies available on the DSIRE database, you’ll find many more—and richer—solar PV subsidies than for solar thermal.
Once again, I think the reason behind this tilt against solar thermal is the lack of awareness and understanding from legislators about the benefits of solar thermal applications. From hot water and heat, to air conditioning, solar thermal installations could be saving consumers, businesses, and government facilities thousands of dollars over the system’s lifetime. In large installations, hundreds of thousands of dollars.
Environmentally, solar thermal can not only reduce our dependence on fossil fuels, but also decrease the currently trend in hydrofracking, a process that may not only damage the environment, but also contaminate drinking water.
The solar industry needs better solar thermal lobbyists. Lobbyists are a dirty word, I know, and yet, they are effective getting in front of legislators and explaining the benefits of solar.
3) Subsidized low gas prices
Subsidizing the exploration of natural gas and other fossil fuels are not helping any consumer or business to consider purchasing renewable solar PV or solar thermal.
It’s hypocritical for the Federal government to say that it wants to move the nation towards clean, renewable, non-polluting energy while encouraging the development of natural gas, enabling natural gas prices to remain artificially low. Meanwhile, utilities are raising their coal-fired electric rates between 3% and 5% a year, making solar PV increasingly competitive.
I’m not saying that gas won’t play a role in our nations near-term energy portfolio, but the sooner our legislators encourage more renewable solar alternatives by leveling the playing field and eliminating gas subsidies, the more solar jobs will be created, and of course, the more energy independent our country will be.
Once again, the solution is better solar thermal lobbying. Solar PV and wind companies all have policy people who are constantly talking to legislators. Solar thermal needs that same face-to-face representation.
“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.
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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.
