The "Right" Way to Save with Solar Hot Water

A recent blog article on The News & Observer website reported significant power bill savings among Raleigh, N.C.-area Progress Energy customers who switched to solar hot water systems.

A solar water heating system, such as this one by Solene,
can slash water heating utility bills by as much as 80 percent.

In Progress Energy's report to the N.C. Utilities Commission, customers in their year-long pilot program saved an average of $235 a year by switching to solar water heaters. The savings represented a 63 percent average annual savings on the water heater portion of each customer's power bills.

As part of the pilot, Progress contributed $1,000 to the purchase cost of each customer's solar water heating system. Progress reported that the solar systems cost anywhere from $4,000 to $12,375 per home.

Naysayers were quick to jump on the cost of the systems as a major deterrent, recommending traditional water heaters or do-it-yourself solar thermal collectors. But well-designed and professionally-installed solar hot water systems come with distinct advantages over both DIY and traditional water heaters.

To begin with, a homeowner rarely pays the full price of a solar hot water system. In North Carolina, for example, solar water heaters qualify for a 30 percent federal tax incentive and a state tax credit of up to $1,400. Other states offer similar rebates and incentives, as do many utility companies, cutting the cost of a new solar system by about half.

Homeowners will also enjoy more savings over time using a solar water heating system, despite the initial investment. According to the U.S. Department of Energy (DOE), water heating bills should drop between 50 to 80 percent after installing a solar system. Because solar energy is free, homeowners also  have long term protection from future fuel shortages and utility price hikes.

If you're building a new home or refinancing, the DOE says the economics are even more attractive. Including the price of a solar water heater in a new 30-year mortgage usually amounts to between $13 and $20 per month. The federal income tax deduction for mortgage interest attributable to the solar system reduces that by about $3–$5 per month. So if your fuel savings are more than $15 per month, the solar investment is profitable immediately. On a monthly basis, you're saving more than you're paying.

So why not enjoy those savings with a DIY solar water heater? Although the technology behind solar water heating is simple and numerous plans for do-it-yourself solar systems are available on the internet, a DIY solar hot water system can be an expensive mistake.

Firstly, to qualify for most state, federal and utility rebate programs you'll need to show that your collector and/or system is rated or compliant with various governing agencies. Some of these organizations include the Solar Ratings & Certification Organization, the Florida Solar Energy Center and the Industry Association of Plumbing & Mechanical Officials. These independent organizations develop codes and criteria specifically for solar thermal systems to protect consumers and to hold manufacturers accountable for the safety and quality of their products.

A high quality solar thermal collector will also come with a comprehensive warranty, protecting the purchaser for an extended period of time. Aurora solar hot water collectors by Solene, for example, come with a 10 year warranty plus a bonus lifetime limited warranty. It is important to note, however, the warranty requires that the collector is installed by a trained, authorized installer.

In addition to warranty coverage, homeowners should seek a trained professional for a solar hot water system installation for performance, safety and protection from liability.

Proper installation depends on a variety of factors including climate and local building codes. A qualified solar thermal contractor can ensure you're getting the best performance and return on your investment while adhering to code requirements.

Working on the roof (where most solar thermal collectors are mounted) can be dangerous, especially when working with large panels, electric wires (in the case of active systems) and water. You should consider the long term protection of your home, as well. An untrained individual can make mistakes leading to a myriad of future problems in your roof and attic, not the least of which could be flooding and fire.

By choosing a licensed contractor to perform the installation, you'll protect yourself from liability in the case of injury, damage and future property values. (Having work done on your home without a proper permit must be disclosed to future buyers.)

A trained solar professional will get the best
performance from a solar water heating system.

A solar hot water system can be an excellent investment with long-term benefits for your budget and the environment.  By choosing your system and your installation professional carefully, you can reap the rewards of clean, renewable solar energy for years to come.