Cheap hot water? Just add sunshine

You don't need a hot climate and tens of thousands of dollars to go solar. Harnessing the sun's free energy for daily hot-water needs can be practical and affordable.

By Gwendolyn Bounds of The Wall Street Journal

Cheap hot water? Just add sunshine

(© Richard Hamilton Smith/Corbis)

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Bill Banack doesn't fancy himself an environmental "fanatic," but his showers, dishwasher and washing machine all use renewable energy these days. The source: three slim solar panels perched atop his 2,200-square foot Hadley, Mass., home. They don't provide electricity — they send him heat for hot water.

"I'm not belittling the green movement, but mostly we wanted to save money," says Banack, who now shuts off his gas boiler in the summer except during stretches of cloudy days. Banack estimates his heating-fuel bills have dropped at least 25% since adding the system, which was made by Germany's Stiebel Eltron GmbH and cost about $6,000 after tax credits. "This is a form of independence," he says.

As more homeowners are discovering, you don't need a super-hot climate and tens of thousands of dollars to go solar. In many cases, all it takes to offset two-thirds of your hot-water bill is a couple of panels resembling skylights, an 80-gallon water storage tank and some shade-free southern rooftop exposure. Costs range from about $2,000 to $10,000, sums that can be halved thanks to hefty new federal and state incentives. Just last week, California launched a cash-rebate program that will average $1,500 for residents to install solar water heaters at home.
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When most people think of solar energy, they imagine using it to generate electricity, and that's where a lot of buzz and venture-capital investment dollars currently go. But in the average home, harnessing the sun's free energy for daily hot-water needs can be a more practical and affordable bet. Water heating is the third-largest energy expense in most households, after space heating and air conditioning, according to the Energy Department. This year, Hawaii began mandating solar water heaters in most new homes, and cold-weather locales such as New York and Colorado are among the state leaders in installations.

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Hot water "is the most efficient way to use solar, short of passive solar where you're using sunlight to warm up tile or stone," says Monique Hanis of the Solar Energy Industries Association, a trade group that represents manufacturers and installers of solar products for electricity, water and other uses.

"You are locking in your cost rate for the next 25 to 30 years. It's basic, but it works."

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Systems vary, but one common all-climate configuration – which I recently installed — consists of a well-insulated water tank inside the house and a small array of solar collectors, such as panels or tubes, on the roof. A nontoxic, antifreeze fluid gets pumped through the collectors and is warmed by the sun. The fluid then shoots down through insulated piping into a heat exchanger in the tank. Heat is transferred to the potable water; then the antifreeze fluid circulates back to the roof to repeat the cycle.

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In most regions, a backup heat source is needed for overcast days. For instance, the gas boiler providing my home's baseboard heat also is hooked to the solar tank and will goose the water temperature inside to 110 degrees (that's the setting I've programmed) if the solar-powered system isn't able to reach that temperature on its own. Other possibilities: an electric or gas heating element integrated directly into the solar tank or a separate on-demand water heater. Some homes with ample space and greater hot-water needs use two tanks: one as a solar preheat tank that feeds water into a second tank warmed by gas, oil or electricity.

A couple of caveats: You'll need a space on the roof, or wherever you place panels, with minimal shading from 11 a.m. to 3 p.m. to make a system work most efficiently. I took down several ailing trees on my property that cast shadows, which added to the upfront cost. And depending on your roof's pitch and where you live, installers might recommend propping the panels at an angle for maximum solar gain, which may look unsightly.

Whatever the route, financial incentives are heating up. For starters, a federal renewable-energy tax credit in place through 2016 can now pay for 30% of your system, with no cap. Water heaters for swimming pools or hot tubs don't qualify, and equipment must be certified for performance and durability by the not-for-profit Solar Rating and Certification Corp.

Many states offer perks, too. In Arizona and New York, a 25% tax credit of up to $1,000 and $5,000, respectively, knocks off another chunk. Along with California, utilities in Florida, Texas and elsewhere provide upfront rebates. (For a list of state and federal incentives, go to dsireusa.org.)
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"Solar hot water has been like the redheaded stepchild and not seen as sexy as electricity, but it should be," says Bernadette Del Chiaro, clean-energy program director for the not-for-profit advocacy group Environment California, which helped sponsor the rebate program.

Interest in solar hot water last peaked amid rising fuel prices in the 1970s and early 1980s, until federal tax credits expired and an easing of energy prices made consumers lose interest. In recent years, reinstated incentives, sleeker equipment and rising fuel prices pumped life back into the industry. Between 2005 and 2008, the annual installed capacity of the solar hot-water systems in the continental U.S. quintupled, according the Interstate Renewable Energy Council, a not-for-profit information and policy group.

While the recession triggered a sales slowdown in 2009, manufacturers nevertheless are pushing forward with expansion. Skylight maker Velux Group began selling its solar hot-water systems in the U.S. in 2008 and says residential sales have quadrupled. Nearly 100 companies are listed online whose solar water equipment is rated by the SRCC certification group, and systems are widely sold on the Internet.

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Stiebel Eltron plans to begin manufacturing its solar hot-water panels in Hatfield, Mass., later this year, while Kingston, N.Y., upstart EarthKind Solar Inc. is gearing up to produce panels made by Phoenix SonnenWaerme AG, also German. They join a host of established players, such as California-based Fafco Inc. and Heliodyne Inc., that already produce equipment in the U.S.

Consumer appetite may swell as solar hot-water technology broadens to applications such as air conditioning and space heating.

At Alchemy Construction Inc. in Arcata, Calif., residential sales of solar hot-water systems climbed 50% over the past two years, and most included a radiant heat component, says owner Stephen Bohner. He bristles a bit when customers focus too much on payback time of panels. "What's the payback time of your granite countertop?" Bohner asks.

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Jim and Patti Jeffries of Hampton, Ga., replaced their 1986 water heater last March with a two-panel Velux solar system with electric backup. The Jeffries' natural-gas usage plummeted 79% between 2008 and 2009, while electric usage climbed only 11%.

"The only problem we had is when there was an ice storm two weeks ago and the sun never came out," Patti Jeffries says.

As more contractors stung by the recession add solar to bolster their offerings, consumers will see increased competition for their dollars.

It's best to seek licensed, insured contractors who warranty their work. A directory of installers can be found at seia.org; findsolar.com, run by the American Solar Energy Society; and nabcep.org, the site of the North American Board of Certified Energy Practitioners.

The company designing my system, Fishkill, N.Y.-based Smart Systems USA Inc., is a local electrical and plumbing outfit that recently segued into renewable energy. I was only their second hot-water job, but took the gamble because of their reputation and proximity to my home for future maintenance. Installation lasted about three days in November, with few hiccups.

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On cold days, if the sky is clear, the sun heats water to nearly 100 degrees. Come summer, those temps should rise to 140 and higher. Federal and state tax credits will knock the system's $10,000 cost down to $4,500.

These systems, I found, can make you a little nutty. To use as little backup fuel as possible, I initially tried to time showers to coincide with maximum sunshine, tricky when there's an 8 a.m. meeting on the calendar. A long stretch of snow even drove me up on the roof to clear panels with a broom — um, don't try that at home. Eventually though, I relaxed, and early tabulations show my monthly fuel usage dropping from last year, which makes this particular project hot in more ways than one

Solar hot water, boiled down

Will it work at my house?
As a rule of thumb, you need a portion of southern-facing roof or other spot on the property with minimal shading from 11 a.m. to 3 p.m. Two to three collectors (i.e. panels) typically suffice for most single-family homes. Your installer should use a tool, such as the Solar Pathfinder, to measure the amount of daily energy your collectors will get from the sun year-round.

Where can I learn about different types of systems?

Depending on your climate and home, there are multiple designs of solar hot-water systems ranging in cost from about $2,000 to $10,000. A basic description of each can be found at the Energy Department's Web site.

Are there financial incentives to help cover costs?

Most systems can qualify for a 30% federal tax credit, so long as the collectors are certified for performance and durability by the not-for-profit Solar Rating and Certification Corp. There also are state tax and rebate incentives, which may have additional requirements. Check the Database of State Incentives for Renewables & Efficiency at dsireusa.org.

What about warranties?

While these vary, most well-established manufacturers warranty panels and other components from defects for a minimum of five years to 10 years, and water tanks for at least six, with some caveats. Your installers should warranty their work too. As a rule of thumb, a solar hot-water system is designed to last for around 25 to 30 years.

Does it matter what kind of hot-water storage tank I use? Ideally, your tank(s) will be as well-insulated as possible to retain heat. Look for "standby-loss" figures from manufacturers to compare. A stainless-steel tank lasts longer but is pricier than the more commonly used glass or enamel-coated steel tanks. Homepower.com offers good comparisons of tanks and other information. In most climates, you'll need a backup heat source connected to your tank, such as your existing furnace, a second tank or a separate on-demand water heater.

What about aesthetics?

There are a few types of collector designs, such as panels or tubes. Each have their pros and cons. Cosmetically, some people prefer panels for rooftop applications because if well-installed they can resemble skylights. Make sure installers have a plan to route piping inconspicuously from collectors to your hot-water tank. An attic can keep them hidden, but vaulted-ceiling architecture with no attic may make it trickier. I've seen gruesome layouts where fat tubes snake across roofs and down exterior walls. My team drilled lines through a roof overhang, tucked them alongside the house and then boxed them in with wood to match the home's exterior.

How do I find a qualified installer?

At minimum, seek licensed, insured contractors who warranty their work and have training certification from the manufacturers they represent. Ask how many systems they've installed and for references. It can help to hire locally for future maintenance needs. A directory of installers can be found at seia.org and at findsolar.com, run by the American Solar Energy Society. The North American Board of Certified Energy Practitioners also provides list of installers certified by its standards