Making a Difference with Solar Thermal - Green Advantage Newsletter

Solar Thermal Panel Systems are Hotter Than Ever: Federal Tax Incentive Program Extended Through 2008!

Solar Thermal… Very PC… But Not PV

Solar Thermal Panels are based on a very simple principle, capturing the sun’s energy to generate hot water. These systems should not be confused with photovoltaic systems which use the sun’s energy to generate electricity. Solar thermal systems are available for use in domestic, commercial and industrial new construction and remodeling projects. The individual application will determine which of the following systems is best.

There are two main types of solar thermal collectors which are generally placed on roof tops, “Batch” and “Flat Plate.” Flat plate collectors contain an array of fluid circulation tubes attached to dark absorber plates. Batch collectors, also know as “breadbox” collectors, contain one large tank of liquid. Once heated by solar energy, the water travels into one of the four main types of thermal systems and most often provides hot water for bath and kitchen needs.

The four main thermal systems include:

Passive
Active
Direct (Open Loop)
Indirect (Closed Loop)

Passive Systems: In passive systems the water circulates without the aid of pumps or controls.
Active Systems: In active systems the liquid circulation is assisted by pumps.

Direct (Open Loop) Designs: With direct or open loop designs the water pumped through the system is the same water that occupants use. These systems are susceptible to freezing unless safeguards are built in. Thermosiphons, use convection to circulate fluid within the system and can be installed in lieu of pumps when conditions allow.

Indirect (Closed Loop/ Drainback) Designs: With indirect or closed loop designs, an antifreeze solution is circulated from the panel to a heat transfer unit where it warms the water occupants will use.

Making a Difference with Solar Thermal

According to TheSolarGuide and the Department of Energy, the cost of closed loop solar thermal domestic hot water system is around $5,000 and the cost seems to be decreasing as demand increases. Open loop systems generally cost about one third to one half less.

PAYBACK ON SYSTEM COST

Comparative payback periods shorten as gas and electricity prices rise. Many natural gas customers have seen rates double in the last five years and electric customers face increases associated with deregulation. Return on investment payback periods depend on a number of factors including climate, insulation, landscape, building orientation and use, tax incentives, and availability of materials and qualified labor. However, according to the Department of Energy, “a simple payback of 4 to 8 years” should be expected on a well designed and properly installed solar water heater system.

Green Home Guide, an on-line site for green product reviews and sustainable building advice, posted the following

On August 21, 2007, Scott wrote: We live in Florida and just installed a passive solar water heating system for domestic hot water needs. We had been paying about $90 a month ($1080 per year) to heat our water with propane. About 2 weeks ago, I turned off the propane and now enjoy 140 degree hot water. The cost of our system was $5000, with a tax credit of $1500 and a State of Florida rebate of $500.

We should pay for our system in less than 3 years. I am strongly considering installing two solar systems in our retirement home. One system for domestic hot water and one to supply hot water for the radiant floor heat system we intend to install. I realize that we will be relocating to a colder climate and will probably have to supplement with electricity or natural gas during the colder months, but I would hope to recoup our installation fairly quickly. We are really sold on solar. The difficult part is finding a good dealer/installer and doing a lot of research. Here is a good place to start www.solar-rating.org.

ADDITIONAL APPLICATIONS- RADIANT FLOORING AND POOLS

Solar thermal systems are heating water for more than just bath and kitchen needs. They are also being used to heat water for radiant floor systems and swimming pools.

Radiant floor applications are enhanced by the fact that many floors possess thermal mass, storing and releasing heat over time. TheSolarGuide.com estimates that a whole house solar thermal systems can cost as much as $14,000 in comparison to a $7,000 conventional radiant system. It has been suggested that the most cost effective systems are those that provide both solar hot water and partial (40-80%) solar space heating. According to www.house-energy.com, the payback for solar space heating systems is twice that of solar hot water systems (roughly 6-15 years) due to higher hardware investment costs, availability of materials, and labor costs. Local finance incentives and tax credits may reduce these costs considerably thereby significantly reducing the payback period.

Heating a swimming pool requires a large amount of energy, some project as much as an average home uses per year. A solar thermal system for a typical 300-400 square foot residential pool will run between $3,000 and $5,000. However, as illustrated in the following payback scenario provided by www.house-energy.com, a solar thermal system is by far the most advantageous choice:

10 Year period comparative economics for an initial investment of $2500 for a gas pool heating system and a $5000 initial cost of a solar pool heating system:

Gas Pool Heating System (10 Years, 400 square foot pool)

Initial Investment: $2,500
Operating Costs: $10,000 (optimistic hypothesis)
Total Costs: $12,500

Solar Pool Heating System (10 Years, 400 square foot pool)

Initial Investment: $5,000
Operating Costs: $500 (maintenance)
Total Costs: $5,500

Conclusion:

In the case above, the payback period for a solar pool heating is around 3 years, and the savings for a 10 years period around $7000…

Since the span life of a solar pool heating system (20 years, or so) is higher than the span life of a Gas Pool Heating System, the savings would continue for more a much wider period. www.house-energy.com

LOCAL POLICIES

Homeowner Associations, local ordinances and CC&Rs (codes, covenants, and restrictions) need to be consulted when planning a solar thermal installation. Currently thirteen states (Hawaii, California, Nevada, Arizona, New Mexico, Colorado, Florida, South Carolina, Wisconsin, New Jersey, Indiana, Massachusetts, and West Virginia) have enacted laws prohibiting or limiting CC&Rs and local ordinances from restricting solar system installations. Solar easements may also be available which allow property owners to protect existing solar access by restricting future development that could deny that resource. Click here to review State-by-State Energy Efficiency Policies.

TAX INCENTIVES (Credits, Deductions, and Rebates)

Because tax credits reduce the amount of tax dollars owed “dollar-for-dollar,” they are generally seen as more valuable than tax deductions - which reduce tax dollars owed by percentages only. For example, if you are eligible for a $2000 deduction and are in the 20% tax bracket, your deduction would reduce your taxes by $400, whereas a $2000 tax credit would reduce your taxes by $2000. Some local utility companies offer rebates for solar installations because they offset peak load demands. Generally these show up as refunds on utility bills.

IRS Form 5695 & Instructions: Residential Energy Credits for Tax Year 2006

Tax Credits have been extended through December 31, 2008.

The Energy Policy Act of 2005 (H.R. 6, Sec. 1335) established a 30% tax credit up to $2,000 for the purchase and installation of residential solar electric and solar water heating property. An individual can take both a 30% credit up to the $2,000 cap for a photovoltaics system and a 30% credit up to a separate $2,000 cap for a solar water heating system. A 30% tax credit up to $500 per 0.5 kilowatt (kW) is also available for fuels cells. Initially scheduled to expire at the end of 2007, the tax credits were extended through December 31, 2008, by Section 206 of the Tax Relief and Health Care Act of 2006 (H.R. 6111).

Solar water heating property must be certified for performance by The Solar Rating Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed. Note that the tax credit does not apply to solar water heating property for swimming pools or hot tubs.

The extension of the act also applies to special tax allowances for cellulosic ethanol facilities to include plants placed in service by 2012, as well as the research and development tax credit, which encourages businesses to invest in new innovations. See the text of the bill, the White House press release and fact sheet, and the press releases from the Solar Energy Industries Association and the Alliance to Save Energy

The Tax Incentives Assistance Project (TIAP) is sponsored by a group of public interest non-profit groups, government agencies, and other organizations, designed to give consumers information needed to make use of the federal tax incentives for energy efficient products and technologies.

ENVIRONMENTAL BENEFITS

In addition to the fact that solar thermal systems lock in a free energy source, it is also very important to consider the tremendous positive environmental effect these systems represent – reducing our dependency on natural gas and fossil fuels while also reducing greenhouse gas emissions.

Solar Service Incorporated, a solar hot water and heating system supplier located in Niles, IL, has designed more than 1,000 systems nationwide and is finding that many of their customers are experiencing not only a quick payback, but positive feedback as well:

“Businesses that use large quantities of hot water can experience dramatic cost savings by going solar. Laundromats, apartment buildings, restaurants, factories and hotels are examples of some of our most satisfied customers. Many of these businesses use the majority of their hot water when the sun is shining and are ideal for solar. Exceptional state and federal incentives exist for commercial applications; including a 30% Illinois state rebate, a federal 30% tax credit, and an 85% tax write off. Solar offers an opportunity to reduce the business risk associated with skyrocketing energy costs. Many businesses are benefiting from the positive publicity and media coverage that the solar systems generate, particularly as concern about global warming increases.” www.SolarServiceInc.com

DECENTRALIZATION AND OUR CARBON FOOTPRINT

According to a DOE Energy Efficiency and Renewable Energy Program report, “When a solar water heater replaces an electric water heater, the electricity displaced over 20 years represents more than 50 tons of avoided carbon dioxide emissions alone.” Additionally, as more and more buildings become outfitted with renewable systems, our dependency on regional power stations is reduced.

Electricity is currently produced in a limited number of large power plants located great distances from where much of the energy is ultimately used. Huge amounts of wasted energy is released from these power plants into the air or discharged into rivers, never to contribute one kilowatt of power to the grid. Further energy is wasted as the electricity travels along transmission wires. Some estimates project this waste at levels greater than the actual electrical needs, as high as 60% according to Stephen Tindale, Executive Director of Greenpeace UK, as reported in Greenpeace Decentralising Power - An Energy Revolution for the 21st Century.

In a Decentralized Energy (DE) system, electricity is generated at –or very near- the point of use. Buildings outfitted with photovoltaic panels, solar thermal panels, wind turbines, and geothermal heat pumps become mini power stations networking to create localized power grids.

Distributed generation at many locations around the grid increases power reliability and quality while reducing the strain on the electricity system. It also makes our electricity infrastructure less vulnerable to [natural disaster and] terrorist attack, both by distributing the generation and by diversifying the generation fuels.

David Garman, US Assistant Secretary of Energy

A solar professional should be consulted to help you determine the best solar thermal application for your particular needs and installation conditions.

REFERENCES AND RESOURCES

Visit these sites for additional information on solar power.

A Consumers Guide - Heat Your Water With the Sun

Alliance to Save Energy

Carbon Calculator W/ REC offset function

Database of State Incentives for Renewables and Efficiency

Department of Energy Solar Water Heating Technologies

Department of Energy - Alternative Energy Resources State-by-State

Economics of Investing in a Solar Electric System

EERE - Solar Energy Glossary of Terms

Find Pre-screened Solar Professionals for Installations and Service

Greenpeace Decentralising Power - Full Report

Green Home Guide- Unbiased Reviews and Advice

Interstate Renewable Energy Council

PV Watts - Solar Calculator

Retail Renewable Energy Certificates - Green Power Markets

Solar America Initiative - DOE solicitation for 2008 Solar Cities

Solar Policy News and Trends

Solar Water Heating Calculator

Southface: Responsible Solutions for Environmental Living

State-by-State Energy Efficiency Policies

The Tax Incentives Assistance Project

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In This Issue:	March 2008
News Overview Welcome Letter Solar Thermal Making a Difference Part 2 of The Bainey Group How We Started Instructor Spotlight Certification Success Story Zachary Bidle We Want to Hear from You! Green Tips from Chap Vail of New Jersey DSIRE Energy Efficiency and Renewable Energy? New to the Green Scene? "Business as Usual" Energy Efficiency Decision Approved High Performance Building Requires a High Performance Team	GREENLIGHT Archive June 2008 March 2008 Inaugural Issue
Solar Thermal Panel Systems are Hotter Than Ever: Federal Tax Incentive Program Extended Through 2008! Solar Thermal… Very PC… But Not PV Solar Thermal Panels are based on a very simple principle, capturing the sun’s energy to generate hot water. These systems should not be confused with photovoltaic systems which use the sun’s energy to generate electricity. Solar thermal systems are available for use in domestic, commercial and industrial new construction and remodeling projects. The individual application will determine which of the following systems is best. There are two main types of solar thermal collectors which are generally placed on roof tops, “Batch” and “Flat Plate.” Flat plate collectors contain an array of fluid circulation tubes attached to dark absorber plates. Batch collectors, also know as “breadbox” collectors, contain one large tank of liquid. Once heated by solar energy, the water travels into one of the four main types of thermal systems and most often provides hot water for bath and kitchen needs. The four main thermal systems include: Passive Active Direct (Open Loop) Indirect (Closed Loop) Passive Systems: In passive systems the water circulates without the aid of pumps or controls. Active Systems: In active systems the liquid circulation is assisted by pumps. Direct (Open Loop) Designs: With direct or open loop designs the water pumped through the system is the same water that occupants use. These systems are susceptible to freezing unless safeguards are built in. Thermosiphons, use convection to circulate fluid within the system and can be installed in lieu of pumps when conditions allow. Indirect (Closed Loop/ Drainback) Designs: With indirect or closed loop designs, an antifreeze solution is circulated from the panel to a heat transfer unit where it warms the water occupants will use. According to TheSolarGuide and the Department of Energy, the cost of closed loop solar thermal domestic hot water system is around $5,000 and the cost seems to be decreasing as demand increases. Open loop systems generally cost about one third to one half less. PAYBACK ON SYSTEM COST Comparative payback periods shorten as gas and electricity prices rise. Many natural gas customers have seen rates double in the last five years and electric customers face increases associated with deregulation. Return on investment payback periods depend on a number of factors including climate, insulation, landscape, building orientation and use, tax incentives, and availability of materials and qualified labor. However, according to the Department of Energy, “a simple payback of 4 to 8 years” should be expected on a well designed and properly installed solar water heater system. Green Home Guide, an on-line site for green product reviews and sustainable building advice, posted the following On August 21, 2007, Scott wrote: We live in Florida and just installed a passive solar water heating system for domestic hot water needs. We had been paying about $90 a month ($1080 per year) to heat our water with propane. About 2 weeks ago, I turned off the propane and now enjoy 140 degree hot water. The cost of our system was $5000, with a tax credit of $1500 and a State of Florida rebate of $500. We should pay for our system in less than 3 years. I am strongly considering installing two solar systems in our retirement home. One system for domestic hot water and one to supply hot water for the radiant floor heat system we intend to install. I realize that we will be relocating to a colder climate and will probably have to supplement with electricity or natural gas during the colder months, but I would hope to recoup our installation fairly quickly. We are really sold on solar. The difficult part is finding a good dealer/installer and doing a lot of research. Here is a good place to start www.solar-rating.org. ADDITIONAL APPLICATIONS- RADIANT FLOORING AND POOLS Solar thermal systems are heating water for more than just bath and kitchen needs. They are also being used to heat water for radiant floor systems and swimming pools. Radiant floor applications are enhanced by the fact that many floors possess thermal mass, storing and releasing heat over time. TheSolarGuide.com estimates that a whole house solar thermal systems can cost as much as $14,000 in comparison to a $7,000 conventional radiant system. It has been suggested that the most cost effective systems are those that provide both solar hot water and partial (40-80%) solar space heating. According to www.house-energy.com, the payback for solar space heating systems is twice that of solar hot water systems (roughly 6-15 years) due to higher hardware investment costs, availability of materials, and labor costs. Local finance incentives and tax credits may reduce these costs considerably thereby significantly reducing the payback period. Heating a swimming pool requires a large amount of energy, some project as much as an average home uses per year. A solar thermal system for a typical 300-400 square foot residential pool will run between $3,000 and $5,000. However, as illustrated in the following payback scenario provided by www.house-energy.com, a solar thermal system is by far the most advantageous choice: 10 Year period comparative economics for an initial investment of $2500 for a gas pool heating system and a $5000 initial cost of a solar pool heating system: Gas Pool Heating System (10 Years, 400 square foot pool) Initial Investment: $2,500 Operating Costs: $10,000 (optimistic hypothesis) Total Costs: $12,500 Solar Pool Heating System (10 Years, 400 square foot pool) Initial Investment: $5,000 Operating Costs: $500 (maintenance) Total Costs: $5,500 Conclusion: In the case above, the payback period for a solar pool heating is around 3 years, and the savings for a 10 years period around $7000… Since the span life of a solar pool heating system (20 years, or so) is higher than the span life of a Gas Pool Heating System, the savings would continue for more a much wider period. www.house-energy.com LOCAL POLICIES Homeowner Associations, local ordinances and CC&Rs (codes, covenants, and restrictions) need to be consulted when planning a solar thermal installation. Currently thirteen states (Hawaii, California, Nevada, Arizona, New Mexico, Colorado, Florida, South Carolina, Wisconsin, New Jersey, Indiana, Massachusetts, and West Virginia) have enacted laws prohibiting or limiting CC&Rs and local ordinances from restricting solar system installations. Solar easements may also be available which allow property owners to protect existing solar access by restricting future development that could deny that resource. Click here to review State-by-State Energy Efficiency Policies. TAX INCENTIVES (Credits, Deductions, and Rebates) Because tax credits reduce the amount of tax dollars owed “dollar-for-dollar,” they are generally seen as more valuable than tax deductions - which reduce tax dollars owed by percentages only. For example, if you are eligible for a $2000 deduction and are in the 20% tax bracket, your deduction would reduce your taxes by $400, whereas a $2000 tax credit would reduce your taxes by $2000. Some local utility companies offer rebates for solar installations because they offset peak load demands. Generally these show up as refunds on utility bills. IRS Form 5695 & Instructions: Residential Energy Credits for Tax Year 2006 Tax Credits have been extended through December 31, 2008. The Energy Policy Act of 2005 (H.R. 6, Sec. 1335) established a 30% tax credit up to $2,000 for the purchase and installation of residential solar electric and solar water heating property. An individual can take both a 30% credit up to the $2,000 cap for a photovoltaics system and a 30% credit up to a separate $2,000 cap for a solar water heating system. A 30% tax credit up to $500 per 0.5 kilowatt (kW) is also available for fuels cells. Initially scheduled to expire at the end of 2007, the tax credits were extended through December 31, 2008, by Section 206 of the Tax Relief and Health Care Act of 2006 (H.R. 6111). Solar water heating property must be certified for performance by The Solar Rating Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed. Note that the tax credit does not apply to solar water heating property for swimming pools or hot tubs. The extension of the act also applies to special tax allowances for cellulosic ethanol facilities to include plants placed in service by 2012, as well as the research and development tax credit, which encourages businesses to invest in new innovations. See the text of the bill, the White House press release and fact sheet, and the press releases from the Solar Energy Industries Association and the Alliance to Save Energy The Tax Incentives Assistance Project (TIAP) is sponsored by a group of public interest non-profit groups, government agencies, and other organizations, designed to give consumers information needed to make use of the federal tax incentives for energy efficient products and technologies. ENVIRONMENTAL BENEFITS In addition to the fact that solar thermal systems lock in a free energy source, it is also very important to consider the tremendous positive environmental effect these systems represent – reducing our dependency on natural gas and fossil fuels while also reducing greenhouse gas emissions. Solar Service Incorporated, a solar hot water and heating system supplier located in Niles, IL, has designed more than 1,000 systems nationwide and is finding that many of their customers are experiencing not only a quick payback, but positive feedback as well: “Businesses that use large quantities of hot water can experience dramatic cost savings by going solar. Laundromats, apartment buildings, restaurants, factories and hotels are examples of some of our most satisfied customers. Many of these businesses use the majority of their hot water when the sun is shining and are ideal for solar. Exceptional state and federal incentives exist for commercial applications; including a 30% Illinois state rebate, a federal 30% tax credit, and an 85% tax write off. Solar offers an opportunity to reduce the business risk associated with skyrocketing energy costs. Many businesses are benefiting from the positive publicity and media coverage that the solar systems generate, particularly as concern about global warming increases.” www.SolarServiceInc.com DECENTRALIZATION AND OUR CARBON FOOTPRINT According to a DOE Energy Efficiency and Renewable Energy Program report, “When a solar water heater replaces an electric water heater, the electricity displaced over 20 years represents more than 50 tons of avoided carbon dioxide emissions alone.” Additionally, as more and more buildings become outfitted with renewable systems, our dependency on regional power stations is reduced. Electricity is currently produced in a limited number of large power plants located great distances from where much of the energy is ultimately used. Huge amounts of wasted energy is released from these power plants into the air or discharged into rivers, never to contribute one kilowatt of power to the grid. Further energy is wasted as the electricity travels along transmission wires. Some estimates project this waste at levels greater than the actual electrical needs, as high as 60% according to Stephen Tindale, Executive Director of Greenpeace UK, as reported in Greenpeace Decentralising Power - An Energy Revolution for the 21st Century. In a Decentralized Energy (DE) system, electricity is generated at –or very near- the point of use. Buildings outfitted with photovoltaic panels, solar thermal panels, wind turbines, and geothermal heat pumps become mini power stations networking to create localized power grids. Distributed generation at many locations around the grid increases power reliability and quality while reducing the strain on the electricity system. It also makes our electricity infrastructure less vulnerable to [natural disaster and] terrorist attack, both by distributing the generation and by diversifying the generation fuels. David Garman, US Assistant Secretary of Energy A solar professional should be consulted to help you determine the best solar thermal application for your particular needs and installation conditions. REFERENCES AND RESOURCES Visit these sites for additional information on solar power. A Consumers Guide - Heat Your Water With the Sun Alliance to Save Energy Carbon Calculator W/ REC offset function Database of State Incentives for Renewables and Efficiency Department of Energy Solar Water Heating Technologies Department of Energy - Alternative Energy Resources State-by-State Economics of Investing in a Solar Electric System EERE - Solar Energy Glossary of Terms Find Pre-screened Solar Professionals for Installations and Service Greenpeace Decentralising Power - Full Report Green Home Guide- Unbiased Reviews and Advice Interstate Renewable Energy Council PV Watts - Solar Calculator Retail Renewable Energy Certificates - Green Power Markets Solar America Initiative - DOE solicitation for 2008 Solar Cities Solar Policy News and Trends Solar Water Heating Calculator Southface: Responsible Solutions for Environmental Living State-by-State Energy Efficiency Policies The Tax Incentives Assistance Project top of the page

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In This Issue:

March 2008

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