by Keith D. Foote
Two trends have severely damaged the solar water heater industry in the United States. The 1st is the rapid drop of natural gas prices since 2008 and the simultaneous fall of photovoltaic system prices. The combination of effects are making solar water heater too expensive. The SDHW (solar domestic hot water) industry is simply not cost effective at this point in time.
Even before natural gas prices dropped in 2008, solar water heaters could not compete with natural gas water heaters. California's program for rebates, combined with ITC incentives, kept the SWHW industry from evolving and becoming competitive with natural gas water heaters. A yearly average of $275 for water heated by natural gas is hard to compete with.
During the same time, residential photovoltaic systems have dropped in price from $8.50 per watt in 2008 to less than $3.50 per watt in 2015. Photovoltaic module prices have dropped from $2.25 per watt to $0.75 per watt. It is predicted they will reach will reach $0.50 in 2018. The majority of residential photovoltaic systems residential, at present, average sell for between $15,000 and $38,000 for 3 kilowatt to 12 kilowatt systems.
An installed solar water heating system normally costs from $7,000 to $14,000, with the prices rising each year, due to the increasing cost of metals. The same solar water heater system cost between $3,500 and $7,000 in 1985. The costs for photovoltaic systems are taking the opposite direction. Today, if a 6 kilowatt grid-tied photovoltaic system sells for $20,000, it is smarter to use the $9,000 to be spent on an solar water heater system and increase the size of the current system by 3 kilowatts to offset the cost of buying an electric water heater.
In hot and humid southern climates heat pumps costing $2,200 to $3,000, installed, are the optimum choice. Testing by the Florida Solar Energy Center, in Florida, showed heat pumps are more efficient than solar water heating systems.
The solar water heating industry will completely close down if the 30 percent ITC program expires. There are still uses for solar heated water in the commercial and industrial markets.
Solar pool heating is one area of solar water heating that is proving successful. Solar pool heating, using low temperature collectors, has a long history of success without the need for tax credits. This industry has continued to grow since the 1970s, and experienced only small drops during economic slow downs. People are building much smaller swimming pools than they did the 1980s, making solar pool heating even more efficient.
The solar thermal industry is often described as being its own worst enemy. A large number of bad articles in the news hasn't helped. One large problem in the industry has been the failure provide systems training in the way manufacturers did during the 1980s. At that time, they provided some excellent training. The Interstate Renewable Energy Council has begun offering a certification program for solar thermal contractors. While there are a number of old-school professionals, a a large number of training schools used unqualified trainers. They steadily eroded the knowledge base, training the technicians to be incompetent. Astonishingly, trainers with just a few years of experience were writing books and teaching their own courses.
The promotion of evacuated tubes for solar water heating systems has been damaging. Evacuated tubes don't work well. They have numerous problems when under pressure, as in pressurized water. Evacuated tubes have had some success in China, using thermosyphon systems with unpressurized water. However, something called "flat-plate selective-coated collectors" can out-heat evacuated tubes by 140 degrees F.
An additional problem in the industry has been the promotion of glycol systems under pressure, in combination with evacuated tubes, instead of using a drain-back system. Many new solar thermal contractors quickly gave up on solar water heating after trying, and failing, with pressurized glycol systems. Because of poor training in the first place, they recieved a number of callbacks. They stopped installing solar water heaters, and focused on photovoltaic systems. They were easier to install and more profitable.
In spite of these factors, the New York State Energy Research and Development Authority has expanding its Solar Hot Water Program. It now includes projects designed to displace water heated by natural gas, propane, oil, and wood. The program had previously only focused on the displacement of hot water heated by electricity. These changes in the program are predicted to attract a larger number of businesses and households wanting to install solar hot water heaters.
Under the new guidelines, the Solar Hot Water Program is now offering incentives as high as $6,000 for eligible family homes and as much as $150,000 for eligible commercial, agricultural, government facilities, and not-for-profits. This program has a $4.3 million budget available for the project. They began taking applications for the newly expanded Solar Hot Water Program on March 20.