Why Hasn’t Solar Hot Water Caught on Yet?

I wish I had the exact answer to thatquestion. All of the research regarding consumer attitudes toward solaris generally PV related, rather than solar hot water related. At thesame time, solar hot water has some obvious challenges, especially inthe residential space.

1) Solar hot water competes with dirty (and cheap) natural gas. With the exception of Hawaii, natural gas is currently fairlyinexpensive right now. The amount of hot water that an averageresidential customer uses typically makes for a slower return oninvestment. Check out our solar hot water calculator, plug in the numbers for any state for residential, and you see for yourself.

Some solutions: Either home solar water heating systems have to become less expensiveor natural gas prices have to rise. While the latter solution may appear to be a long shot, recent news about the environmental cost and abuse of hydraulic fracturing (fracking) may add more cost pressures onnatural gas when stricter Federal regulations are enforced, but thatremains to be seen.

2) There are fewer local and federal incentives for solar hot water. While California has just passed some generous rebates that make solarthermal very attractive for commercial customers, the incentives don’tapply to pool heating and take up perhaps 25% of the cost of residential systems. The 30% Federal investment tax credit can also help reduce upfront costs, but only to non-pool heating applications. While that extra 30% is great, it generally benefits those who often owe taxes at theend of the year.

Some solutions: One solution would be to make the 30% tax credit refundable, so thatyou could get money back from the IRS if you were due a refund. As itstands now, the credit can be carried over for 5 years, but that’s adifficult sales case to make. In addition, governments could increasethe rebate amounts for solar water heating systems, making a faster ROI. Finally, local and federal governments could allow the 30% Federal ITCto apply to pool heating, opening a huge opportunity for Western andSouthern states, where pools are largely not being used due to coldweather and the high cost of heating them during the non-summer months.

3) Solar hot water has fewer marketing resources. While I genuinely appreciate the money and time that SEIA put into its solar generations videos and PSAs, solar water heating was barely mentioned throughout theseries. Most of the images and statements were all PV related.

Some solutions: It would be great if SEIA and other solar organizations would dedicate a campaign or three or four to solar water heating for homes andbusinesses. In addition, it would be great if solar water heatingmanufacturers could increase their marketing budgets. Given the lukewarm demand in the residential sector, it’s understandable why manufacturers are tightly holding the purse strings for now.

4) More financing options for solar hot water. It’s wonderful how there are so many solar leasing and PPA (a.k.a. home solar agreement) options for solar PV today. The same cannot be saidfor solar thermal. These arrangements take the sting out of the upfrontcost of solar PV and would do the same for solar hot water consumers.

Some solutions: Obviously, solar PPA companies and venture capitalists could designmore programs for solar thermal, but banks and venture capitalists haveto find the right financial formula. Reviving PACE programs could help,as well, but that appears to still be in recovery mode. Additionally,solar PV companies that currently only offer solar leases and solarPPA’s of PV could expand into solar water heating.

The good news is that even without highsubsidies, solar water heating does make financial sense for largecommercial applications, such as apartment buildings, hotels, hospitals, etc. The disconcerting news is that these venues are still largelyunaware of solar hot water and solar thermal financial benefits. Evenwhen they are aware of the cost savings, they must find the courage andthe financing to move forward.

Those are my general observations.Admittedly, they’re not based on hardcore market research data, but just my experience hear at Free Hot Water, and talking with other solarthermal installers.

Got more challenges or solutions? By all means, please add to them here in the comments section below.

Original Article on Free Hot Water Blog





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