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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.
If you’ve ever wanted to see the potential of solar thermal energy, watch this video below. Or better yet, go to Okotoks, Alberta, and see The Drake Landing Solar Community (DLSC), a unique solar water heating AND solar space heating housing development in Canada.
According to the DLSC website, this solar development of 52 homes is the first of its kind in North America. What’s so solar “gee-whiz’ about the development is that every home is heated by a huge central solar heating system that stores solar thermal heat underground during the summer months and distributes the energy to each home for space heating needs during winter months.
(Click to enlarge)
The solar storage technology is called Borehole Thermal Energy Storage (BTES). On first glance, the concept seems similar to a geothermal heating system, but it’s not. Of course, the main difference is that the thermal power source is coming from the sun, not from the earth’s crust.
According to the developers, this BTES system heats 90% of each home’s space heating requirements. And yes, that includes Canadian winters. The remaining 10% is backed by a natural gas heater. In addition to solar space heating, each home has its own flat plate solar water heating system on top of the garage. As for the homeowner’s energy costs, it’s structured as a flat monthly fee that is less expensive than gas or oil heating.
(click to enlarge)
Other solar details:
The Development’s system consists of 800 flat-plate glazed collectors.
50% propylene glycol antifreeze
Mounted on four rows of garages, with two rows of collectors per garage
Azimuth – south; tilt – 45°
All 52 houses are serviced by direct-buried, pre-insulated piping.
Short-term thermal storage (STTS) tanks are central hub for heat movement between collectors, district loop (DL)/houses, and (BTES)
The District Loop moves heat from the STTS to the houses
BTES is connected to the STTS through a heat exchanger, all located within the Energy Center, a separate building. (See video).
There are 4 individual home-run loops off a manifold in the Energy Center.
Water temperature is modulated based on outdoor temperature.
Flow is modulated based on the number of houses calling.
Borehole Thermal Energy Storage (BTES) Details
Above ground, it looks like a wide open park. But below ground….
There are 144 – 150mm dia x 35m deep boreholes spaced 2.25m on center.
Single 25mm PEX U-tube with 40mm grout tube.
High solids grout – 9% Blast Furnace Cement, 9% Portland cement, 32% fine silica sand, 50% water
24 strings of 6 boreholes in series.
Divided into four circuits and distributed through four quadrants so that the loss of any single string or circuit has minimal impact on the heat capacity on the entire system
All circuits and strings start from center of the BTES and move toward the outside to maximize stratification.
Here’s an abbreviated promotional video from DLSC. The section shows how the BTES works:
It’s very exciting to see innovative solar thermal developments like this. We sincerely wish the developers of The Drake Landing Solar Community great success.
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).
More solar water heating news from Free Hot Water HQ: The Solar Rating and Certification Corporation (SRCC) has approved a total of 12 new OG-300 residential solar water heating systems manufactured by Free Hot Water.
The certifications include 12 closed-loop solar hot water systems. All models now qualify for solar thermal rebates in California and many other states.
In addition to the SRCC certifications, we’re announcing some memorable brand names:
Kits that include Free Hot Water’s 4000 series of solar collectors are part of the Liberty line.
Kits that include the company’s medium sized 5000 series collectors are part of the Freedom series.
Finally, kits that include the company’s larger solar collector, the FHW-7000 model, are now part of the Independence line.
Our COO and co-founder, Paul Burrowes, explained the reasoning behind the new branding. He said, “A lot of solar manufacturers just give their OG-300 systems a sequential number after their company’s name. We wanted our new kits to represent the homeowner’s desire to increase their energy independence—as well as their utility bill independence.”
As a result of the new branding, Free Hot Water’s national network of installers can now say that they install “Freedom,” “Liberty,” and “Independence” on their customers’ roofs.
The 12 various approved models of Liberty, Freedom, or Independence incorporate options for installing on a flat roof or a pitched roof. All approved systems feature:
Free Hot Water’s SRCC-rated OG-100 collectors (either FHW 4000 series, FHW 5000 series, or FHW 7000 series.)
A storage tank with a solar heat exchanger.
A pump station controller with temperature and pressure gauges, check valves, ball valves, fill and drain valves, and differential controller.
Flashing for preventing roof leaks.
Racking for flat or pitched roofs.
Freeze Protection via either a drain back system or a closed loop glycol system.
Ability to connect to either a gas or electric back up system.
Mounting hardware for the appropriate installation.
The OG-300 pre-engineered kits contain either two collectors for standard homes, while others are designed with three collectors for larger homes or small commercial applications.
All Free Hot Water systems include a 10-year warranty on Free Hot Water collectors, as well as limited warranties on other components.
No matter what you think about the current presidential administration, the current US Department of Energy is huge proponent of solar technologies under Secretary Steven Chu, a Nobel Prize winning scientist. Case in point is the DOE’s development of Solar Heating and Cooling Roadmap, which should be released in its final version this year.
We wanted to share a few of the charts in the draft of the roadmap, which show how solar is being used around the world, its potential in the U.S., and our “take-away” from these graphics.
Chart 1: First, let’s look at the number of solar hot water installations in the U.S., from 1974 to 2010. As many solar water heating veterans and arm chair historians recall, there was a big boom and a bust in solar water heating in the 1970’s and early 1980’s. The boom was driven by energy independence incentives driven by the OPEC oil embargo. The bust was a result of the embargo ending and President Reagan ending those subsidies. The take away: The US needs pro-solar policies and incentives in order to grow solar water heating consistently.That’s why Free Hot Water is a member of SEIA, and we urge you to support them, as well.
Chart 2: Now, let’s look at the water heating energy sources in the U.S. As we can see, solar is a sliver in the chart, natural gas takes up 54%, but there’s that 39% of the U.S. who are using inefficient and expensive electricity to heat their water. The take away:There’s a huge untapped electric water heating market ready to be replaced by solar water heating. Build a marketing message to those customers.
Chart 3: Let’s move on to energy usage for residential energy. Between space heating, space cooling, and water heating, there’s an amazing 72% of the pie chart that could be replaced with various solar thermal technologies. The take away:Again, the U.S. has so much potential for clean solar water heating technology, but they just don’t know it. More marketing and strong solar policies are needed to help grow demand.
Chart 4: We love this one: A survey of 21 countries by the International Energy Agency, Solar Heating and Cooling. Program shows actual uses of industrial solar thermal systems, demonstrating the wide range of potential uses for solar thermal technologies. The take away:If you’re looking for commercial solar thermal applications in the US, here are some of the industries to target.
The good news: The U.S. saw close to 30,000 solar pool heating systems installed and 35,500 solar water heating systems were installed.
The okay news: The entire solar thermal industry grew, but not by much. In the end, the 2010 saw a modest 5% growth of installations compared to 2009. Solar pool heating had much better numbers, growing 13% over 2009.
Nevertheless, the report attributes the weak growth of solar hot water in 2010 to several factors: First, the sluggish economy isn’t helping solar hot water or pool heating. Second, the price for gas, solar hot water’s main carbon fuel competitor, has also been fairly low in 2010.
After hitting a peak of over $20/thousand cubic feet (Mcf), residential retail natural gas prices have hovered between $10-$15/thousand cubic feet (Mcf) in the past year. The bottom line is that the return on investment on small residential systems is going to be slower with gas prices so low. However, it should be noted that gas is a commodity, and prices could rise unexpectedly for any number of reasons, making residential more attractive.
In addition, higher volume commercial systems have very attractive incentives right now, especially in California and New York.
SEIA’s report expects the domestic solar water heating market to continue to grow in 2011, but the actual growth rate will be tied to gas and heating oil prices, and they even suggest that if gas prices remain relatively low or go lower, there may be no growth at all, especially for the residential sector. The trend in solar thermal PPA’s (power purchase agreements) may also help to grow the commercial side, and eventually grow the residential market too.
Similarly, the report says that solar pool heating has been hit by the economy and especially the housing bust. As the economy and housing markets recover, especially in solar leading states like California, Florida and Arizona, the report expects the solar pool heating market also to recover.
The top ten states for solar water heating in 2010 were, in order: California, Hawaii, Florida, Arizona, Puerto Rico, Massachusetts, Colorado, North Carolina, Wisconsin, and New York.
The top ten states for solar pool heating installations in 2010 were, in order: Florida, California, Arizona, Oregon, Illinois, New York, Pennsylvania, Ohio, New Jersey and Nevada.
The full executive summary of the solar report–which covers solar PV, solar CSP, and solar thermal–is available to be downloaded free here. Enjoy.
In the mean time, let’s keep working towards terrific solar thermal numbers for 2011! As always, let Free Hot Water know if we can help.
Despite solar water heating being a 100 year, plus, solar technology, it still plays second fiddle to PV, which is more expensive and less efficient on a per watt basis.
Better, more aggressive marketing, of course, is the solution to getting more attention for residential solar hot water. As a distributor, your success is our success, so Free Hot Water would like to offer a few tips to generate more residential solar hot water leads.
1. Have a great looking web site. A good web designer costs money, and yet, the investment is worth it. You can only make one first impression, and if your website looks rinky-dink and home made, then that makes you and your service look rinky-dink and home made. So, spend the money for a professional web designer. Make sure there are attractive photos of your installs, brief descriptions of how solar water heating works, FAQs, a blog (see below), and an “about us” page with the smiling faces of your team. Residential customers want to trust and connect with people more than a brand, so highlight who you are and why you care about solar hot water.
2. Start a blog. The internet is America’s default source for solar hot water information. The yellow pages are essentially kaput. Whether you’re marketing solar hot water for pools or homes, become an authority by writing an informative blog post at least once a week. Sprinkle in “solar hot water” and other key words, like your city and state, and Google and other search engines will reward your website with more web traffic. Keep in mind that when people search for those key words, they’re researching solar hot water for their home. Become your town’s local authority through a well-written and informative blog.
3. Use Google Adwords and/or banner ads. Google Adwords is paid, targeted advertising. Once again, when people click on those little ads next to their web searches, Google (and you) know there’s a great chance they’re looking for “solar hot water” or whatever search term you’ve purchased.  Hopefully, you have an informative and attractive website that captures those Google visitors and encourages them to contact you for more information. Here’s the link to Google Adwords. Google has great people who will guide you through all the steps and costs.
4. Run a local solar hot water give-away contest. Sometimes, you have to yell “Free!” to get people’s attention. I recommend a Utility Independence Day contest for July 4th. Put this announcement on your home page with a link to a form. Have people fill out that form with contact info, and follow up with a phone call to verify the information and start a conversation about if solar hot water is right for this customer and the benefits. On July 4th week, do the drawing and give away that system, as promised. Make sure you tell the local press about it. In fact, in June, a month before the contest ends, tell the local press the contest is almost over. Include the potential savings over 20 years and emphasize the utility independence. There will of course be a cost, but all advertising costs something, and this is an interactive way to educate the public and generate leads. If you want to be cheap about it, don’t include the installation, but I don’t recommend this.
5. Contribute articles to local newspapers and web sites. More than the green benefits and technology, residents want to know first, “How much?” Don’t hide it. Write a case study article based on a recent client and be honest about the costs. If you have a local rebate program, explain that program, as well as the Federal 30% tax credit for homes (not pools.) People want to do the right thing by going solar, but they want to be assured about its costs.As a professional, you can be an honest guide and show them solar’s long-term financial benefits, as well as the costs. If no one publishes your article, you can always use the material for your blog or as a White Paper.
6. Co-Market with local businesses. Roofers, hardware stores, pool designers, architects, general contractors, plumbers, electricians, landscape architects, HVAC. All of these businesses are related to solar hot water. Call them up, cater a lunch or coffee and donuts with the owner and sales staff. Give them a solar hot water demonstration and explain the financial benefits. In addition, be sure to ask them for a presentation so that you can be a referral source for them, as well. Exchange brochures, pamphlets, and where appropriate, co-advertise on the radio or in magazines and home shows. Of course, you can offer a referral fee, as well. Don’t be shy. If you believe in your services and product, these relationships will see that and you both will prosper.
7. Reach out and delight to your existing customers. I can’t tell you how powerful referrals are from your existing, happy customers. If you can connect with these people and leave them completely satisfied, they can almost eliminate advertising all together. They will tell their friends about you, brag about you, and brag about their free solar hot water. Of course, first you have impress and delight these people with your craftsmanship and customer service. Do something unexpectedly wonderful for every customer. Treat them to a selection of teas or gourmet coffee for them to enjoy their new sun powered hot water. Or make a donation on their behalf to the environmental cause of their choice. Be creative. Assuming you’ve won them over, ask them if they’d like some brochures for them to give to friends. Even more powerful, ask them to “like” your Facebook page and recommend that page to their friends. (Then provide great, useful solar tips/info on the page for them.) Of course, you can also offer them some kind of referral fee for any closed sale. The point here, however, is for them to want to refer you for free, to be your solar hot water evangelist, telling the world about you. If you’ve executed this tip correctly, I sincerely believe you won’t ever lack for leads, and your residential solar hot water business will grow.
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