Solar Water Heating Can Save Money and Pay Off Big

Green-minded homeowners can continue to turn to the sky for help in coping with rising energy costs for years to come thanks to an extension of the solar tax credit program by Congress.

The legislation extends the benefits for residential systems under the old law for eight years. This will enable consumers to recoup 30 percent of the cost of solar thermal water heating up to $2,000.

Jim Cika, manager of solar products for VELUX America, recommends that consumers do their homework on the various solar technologies available, as well as reviewing calculations for how solar-friendly their homes may be. “They need to factor in geographic location, orientation of the roof for solar collectors, costs, and tax incentives and rebates that may be available to arrive at an economically sensible and environmentally-sensitive decision,” Cika says

While a solar thermal system usually costs more to purchase and install than a conventional water heating system, it can save money in the long run and is much kinder to the planet.

Cika says that the cost of an installed ENERGY STAR certified system from his company will vary depending upon the volume of heated water required in a home. Two to three rooftop solar collector panels will usually be installed and solar hot water holding tanks are available in 80- and 120-gallon sizes. An average installation is projected to cost $8,000 to $11,000, with some complex installations running as much as $12,000.

“On average,” he says, “if you install a solar water heater, your water heating bills should drop 50 to 80 percent — not an insignificant sum when you consider that the Department of Energy says that water heating can account for 14 to 25 percent of the energy consumed in our homes.”

According to Cika, in the construction of a new home, where the cost of the system is rolled into the mortgage, homeowners can save more on their monthly energy bills than the increase in their house payment. “Solar water heating provides a positive cash flow from the day of move in,” he says, “effectively giving an immediate payback.”

“In the case of an installation in an existing home in an area that has both federal and state rebates and incentives,” he says, “the payback can vary from three to nine years.”

There are two primary solar technologies available in the market right now, solar photovoltaic (PV) and solar thermal. The photovoltaic process uses the sun to generate electricity and solar thermal uses the sun to heat water. Solar thermal often is the technology of choice for homeowners for a number of reasons. Kevin Hughes, a writer for GreenBuildingElements.com, who installed a solar thermal system in his San Francisco home, explains why.

“I prefer solar thermal, specifically solar hot water, a much older technology. It is much cheaper to install, much more efficient, and has a much faster payback,” he says.

For homeowners considering an installation, the Internet offers a number of Web sites that can be helpful with an analysis and then with locating products and installers. Findsolar.com and nabcep.org list certified installers by state. Solar-rating.org lists certified solar equipment manufacturers and certified installers for VELUX units are listed at www.veluxusa.com.

Eere.energy.gov/consumer includes a link to a calculator for initial cost, annual operating costs and determining payback, as well as a consumer’s guide to solar thermal, while nrel.gov offers a consumer’s guide to photovoltaic. Federal and state tax credit information, by geographic area, is available at dsireusa.org.

Cika says that solar water heating represents a logical first step for homeowners who want to harness the power of the sun because it is relatively simple technology compared to generating electricity from the sun. “The technologies accomplish different objectives,” he says, “but they both will pay increasing dividends to homeowners who utilize them now and in the future.”

For more information on the benefits of solar water heating, call (800) 283-2831 or visit www.veluxusa.com/solar.