Gal Moyal, Free Hot Water’s chief engineer, was recently featured in an article in Solar Power World, but as often happens, only a few of his written answers were used for the final article. But we thought his responses were very insightful, so we decided to share Gal’s full version below.
SPW: In what ways is the market for solar thermal growing or changing?
Gal Moyal: For every dollar invested in solar heating/cooling (SHC) technology, 79 cents will stay in the U.S. This helps drive investment in the U.S. and keeps our nation economically competitive. (Source: U.S. Solar Energy Trade Assessment, 2011)
However, there are a few challenges to achieving that dividend. One of the biggest challenges is the lack of press for the industry. Most of the press seems to lump all solar together, yet always refer to solar PV when “solar” is mentioned. That lack of awareness and attention for solar thermal leads to many local and state policies to limit rebate and incentive funding for solar PV only.
So, despite solar thermal’s robust ROI for commercial applications, such as apartment buildings, hotels, and industrial process heat for food processing and other applications, solar thermal’s benefits and successes are rarely mentioned in the media compared to solar PV. That needs to change.
That being said, I do see the market growing and changing:
- Solar thermal will be more mainstream as gas prices rise on the commodities market ~$4.00/Mtherm Vs ~$2.25/ Mtherm a few years back.
- The large consumers of natural gas are the industrial processing plants, and we see them being increasingly interested in deploying solar thermal solutions for their needs.
- The solar thermal industry is also getting more sophisticated. Our engineers at Free Hot Water have much better tools that enable us to respond to large projects with a large thermal demand.
The solar thermal commercial market has also changed in the last few years:
- Prices for all major thermal components have dropped significantly from a few years ago.
- With an ROI under 3 years for large projects, it is now a very attractive proposition to large commercial natural gas users.
- Controls – incorporating PLCs into the control loop allows a lot more flexibility in incorporating solar thermal systems into the production process.
- Large pump station skids allow installers to install larger solar thermal arrays that were once reserved for utility scale projects. These are now available for a reasonable price to the mid size natural gas consumers.
SPW: As time goes by, how are companies changing with the market?
Gal Moyal: In February 2013, SEIA announced that it was forming the U.S. Solar Heating and Cooling Alliance (SHC Alliance), a SEIA division that will specifically address the PR and advocacy needs of the solar heating and cooling industry. So, finally, the industry is getting organized to get more attention for themselves and the entire solar thermal industry. It’s early yet, but we hope this coalition will achieve great results in the near future.
SPW: When it comes to technology, what is the overarching trend(s) in solar thermal?
Gal Moyal: The first trend is that we are now integrating solar water heating, space heating, cooling, electric and lighting. These aren’t individual energy challenges now. As engineers, we think about energy holistically. How can we improve the client’s energy needs? It’s not just the solar thermal solutions, at least not for us.
By thinking holistically, especially for new construction and building renovations, we’re able to streamline the design, engineering, and installation process. As a result, we’re also becoming cost competitive with conventional gas heating systems.
Specialization is also a trend. As business volume grows, solar thermal companies can become more specialized in a few areas and become more efficient. This will allow individual manufacturing sectors to reduce costs, innovate, and invest in more R&D. Similarly, it allows product manufacturers to concentrate on their core business—manufacturing—and leave the sales, system design, and integration to the market.
SPW: What are the motivational factors behind that technical trend – or why is your industry going in that direction?
Gal Moyal: First, energy costs are steadily raising and driving more interest in solar thermal systems.
Second, there are fewer manufacturers in the US industry now. Most of the European players have left the US, and Chinese manufacturers are not yet entrenched. So, engineering companies like Free Hot Water have more motivation to continue innovating without as much foreign competition.
The market is also growing with more trained installers who are selling projects. They need more efficient and inexpensive systems designed for their customers, so our motivation is to provide what our customers need.
Fourth, all of this new opportunity drives business volume up at the manufacturer level, allowing manufacturers that were spread too thin and working on non-core business to get back to focusing on what they are good at, and leaving the rest to the growing “solar thermal eco system”
SPW: What product of yours demonstrates a trend in your market?
Gal Moyal: As solar thermal engineers, our goals are to streamline the design, engineering, and installation process for solar thermal installers, project managers, architects, etc, and their customers.
Free Hot Water’s unique solar thermal designs reduce installed costs through several factors, including our storage tank solutions, 95% efficient boilers, energy efficient pump station design, quality solar thermal collectors, and a central controller that optimizes the heat and hot water flow of a building’s entire energy system.
Then, we tie all of the various solar heating and energy systems into a single cutting-edge control panel that enable building managers to monitor solar PV, solar radiant heat, and the solar hot water system from a single web-based dashboard. This allows a building manager to view all solar operations on-the-go and quickly address any problems.
Another way we’re innovative is that we can create a simple design and adapt off-the-shelf solutions to further reduce system cost.
Can you give an example of an installation when this technology made a difference or impact?
Gal Moyal: See this press release:
Are there any technologies your industry is leaving behind or replacing, and why?
Gal Moyal: I think the new players in the solar thermal industry are taking a look at how things were done in the past and re-engineering smart design and engineering principals to make installations easier. For example, today we use smart pump stations and simple array design for better flow and functionality.
We also see that large industries, such as beverage and food processing, are now moving away from the traditional gas boiler and tank systems. They’re now seeking solutions that only use natural gas when needed, as opposed to heating a large storage volume that loses energy (heat) as it sits waiting for demand. With solar hot water, the tank is pre-heated with free energy from the sun, so it takes very little gas to bring temperatures up to needed level.
How will the emerging trends you’ve written about impact the solar industry in-general?
Since residential solar systems are not financially attractive right now, we see the commercial business growing in a steady rate. But residential may grow too, if policies continue to support it when natural gas prices rise—and they will eventually.
A few local authorities are now mandating solar thermal for new residential construction (Lancaster, CA.) That may boost residential demand. In the state of Hawaii, solar hot water is also required for new construction. If that type of policy trend continues, higher demand may drive residential installed system costs to a point where solar hot water would become a more of normal way of heating water at home.
What challenges does this market segment face going forward?
One of the single biggest challenges is the limited financing available for solar thermal. Financing is what propelled the start of the solar PV industry and there are not enough financial players in the market at the moment.
So, how can we grow the Solar Heating & Cooling market in the U.S.? Several ways:
- Extend the 30% federal ITC (expires 2016)
- Include SHC technologies as generating technologies to be eligible for Solar Renewable Energy Credits (SRECs) or Renewable Energy Credits (RECs) in state and federal Renewable Portfolio Standards (RPS) or Clean Energy Standards (CES)
- Allow commercial pools to take the 30% federal ITC
- Establish a thermal RPS on a state and/or federal level
- Adopt strong building energy codes that encourage builders to include SHC on new buildings.
- Implement section 523 of the 2007 Energy Act, requiring 30% of the hot water demand for all new or renovated federal buildings to come from solar energy.
- Establish strong manufacturing incentives (48c extension or additional funding).
- Increase workforce training for SHC.
As we said at the top of the blog post, a lot of great information here from Gal. We hope you found it informative.