HOT WATER HEATING

"You pay for a solar hot water system whether you buy one or not."--Tom Lane (2004), author of Solar Hot Water Systems, Lessons Learned 1977 to Today

Solar energy has two basic applications: 1) photovoltaics to produce electricity, and 2) solar thermal or solar heating. The latter is primarily about heating water and sometimes applications to heat air. This page is concerned with water heating of what we call dhw (domestic hot water) or sdhw (solar domestic hot water). This is, for most homes, the water that is used for the dishwasher, food preparation, laundry, showers, and baths. How much of this hot water can a solar thermal installation in the Durango area realistically supply? Easily 70% over a year's time and up to 100% in the summer. That would make solar the primary source of heat with electricity or natural gas or propane as the secondary backup.

How reliable, efficient, and maintenance free are these solar thermal systems? Let's put it this way: they are not the systems of your father or grandfather. From 1977 to 1986 the solar thermal industry enjoyed a 40% tax credit. Many large corporations introduced systems that didn't work for long--they had design flaws, were too complex or too expensive. A few were effective and are still working today. You see them all over Durango and La Plata County. How many are still working is anybody's guess, but it is clear to the trained eye of the solar technician that many of them are not. This is unfortunate, but much has changed since the solar boom years that ended in 1986 when, seemingly, the energy crisis of the 70's was forgotten and oil was again king and cheap. No more worries. Till now. There is a growing appreciation that fossil fuels on planet Earth are not infinite or cheap to access; and while coal, the direct competitor with most solar applications, is in abundant supply for now, there is a growing concern for its true cost in pollutants and CO2 emissions. In short, no more boom and bust for solar as in 1986 when the tax credits were canceled. And now that the solar energy industry is in its second phase, it has grown slowly and steadily in a sensible manner without all the lack of quality problems that went with the aforementioned boom period. Today's solar thermal technology has come a long ways and is truly reliable, effective, and low to no maintenance depending on the type of system.

How affordable is it? Or maybe we should ask: how does its cost compare with the alternative of fossil fuel powered systems where we pay the utility company every month for life? First we need to know a few things about solar energy: (If you are not a math person and financial analysis is unimportant, feel free to skip the following and go straight to save the planet and buy a solar hot water system. For the rest of us who need to see the money consider the following.)

1)Hot water is typically 15% of a household's monthly energy bill consumption in Colorado.

2)The fuel, sunshine is free. Currently (2009) LPEA electricity is 10.6 cents per KWH, liquid propane is about $2.40 per gallon, and natural gas is about $1.06 per ccf, counting taxes and facility charges. This is roughly one therm, or 100,000 btu.

3)Liquid propane has an energy content of 91,599 btu's per gallon, natural gas has 100,00 btu's per therm, and electricity has 3,413 btu's per kwh.

4) A two person household uses about 20 gal. of hot water per person per day or 40 gal. total. Each additional person uses 15 gal. per day, so a family of four uses 70 gal. per day since there is an economy of scales with more people.

5)The cost of the solar sytem is in addition to the cost of the installation for one of the other three fuels since one of them is needed for backup. Remember, the sun doesn't shine every day.

6) The solar hot water system will provide about 70% of the annual heating.

7) The Dept. of Energy says that electricity costs have grown 24% in Colorado over the last four years. This is about 5% inflation per year compounded.

8) LPEA says a sdhw system will cost somewhere in the range of $7000 to $12,000. $9000 is a good median number. It could be more or less depending on features purchased and the complexity of the installation.

9) There is a federal solar water heating tax credit of 30% of the system cost, no longer capped at $2000. This is part of the American Recovery and Reinvestment Act of 2009. Swimming pool and hot tub applications are excluded.

10) The magazine Journal of Appraisal says that for every dollar saved in energy bills with a solar system, $20 should be added to the value of the home. If, for example, you save $500 per year in utility costs, then at a multiple of $20 your home is worth $10,000 more. The rationale behind this is that if you save a dollar in utilities you can afford to spend a corresponding dollar on your home mortgage or $20 added to the borrowed amount. This is the standard currently recommended for real estate appraisers.

Sample system and cost analysis:

Family of 4, annual consumption of 14,650,000 btu's; electricity $ .11 per kwh. Water heater efficiency 86% for an annual cost of $549.00

Solar system: 2 ea. 4x8 flat plate collectors and a 120 gallon solar storage tank, providing 73% of the annual hot water heating. Total cost materials and labor: $9000.00

$9000.00 x 30% federal tax credit = net cost of $6300.00

$549 annual fossil fuel cost for electricity x 73% (solar contribution) = $401 (1st yr. savings with solar)

Savings over 20 years with electricity price increase of 7% per year compounded = $12,586.00

Payback time period with annual price increases = 7.5 years.

Home equity increase @ 20/1 appraisal ratio = $401 x 20 = $7,983.00. Since this is more than the net cost of $6300 your payback is immediate.

Return on investment is 6.4%, better than any CD and you have done your part to save the planet, a matter of unquantifiable value.

What about commercial applications? The tax credit is 30% and the MACR accelerated tax depreciation method can be utilized over 5 years so that the sum of the two could realistically be the equivalent of a 50% savings off the initial cost of the solar system. So to use our $9000 example, instead of knocking 30% off the cost we now drop down to 50% or $4500. Of course commercial applications might be bigger than a typical residential installation. If you are a car wash, laundromat, restaurant, hotel, motel, or institution you probably use a lot of hot water. A solar hot water system could really be the smart thing for you.

What about tankless water heaters? These are growing in popularity and it seems that just about everybody asks about them as an alternative. Tom Lane, author of Solar Hot Water Systems says: "Tankless water heaters do save space, but not much energy. Numerous tests by independent third parties, have shown only 10% savings versus conventional electric water heaters and 15% to 20% savings versus energy efficient conventional gas water heaters over a 24 hour period. Most manufacturers of these expensive water heater systems exaggerate the savings. Daily savings quotes of 25% or higher versus modern electric or gas water heaters are simply not true. In 2004, hot water manufacturers were required to add additional insulation to all water heaters, making instantaneous water heater savings more insignificant. Tankless water heaters have serious problems with scaling in hard water areas." So when the true percentage savings of the instantaneous tankless heaters is compared to the 70% for solar, then solar is usually the obvious choice. But if you can't do solar for whatever reason or need to save space and don't have hard water, then a tankless heater might be right for you. A tankless heater could also be the backup for solar.

So there you have it, and the quote at the top of this page makes perfect sense. If we don't buy a solar hot water system, we have as good as paid for one with never ending utility bills and the money that could have gone to our pocketbook is given to the utility company instead. So if you think a solar hot water system could be right for you, please give us a call and we will be happy to set up an appointment for a solar site analysis to see what kind of installation is possible.