Sunday, August 11, 2013

To Mandate or Not to Mandate Solar Hot Water, That Is the Question

While incentives alone have worked to grow the market for solar PV systems in California, the state's generous CSI Thermal rebates — plus the Federal 30% Investment Tax Credit — have yet to create a solar hot water boom in California. At least not yet. Is it time to lobby for some type of state solar thermal mandate?

California already has one type of state mandate for solar, though not specifically for solar thermal. In 2012, the California Energy Commission (CEC) approved new Title 24 energy efficiency building code requirements. Starting in 2014, the code requires new homes, buildings, and major renovation projects to be “solar ready.”

What does “solar ready” mean? It means that builders must:
Orient the building toward the south,
Make sure the roof isn't shaded, and
Keep the roof as clear as possible so that chimneys, vents, air conditioning, etc don't inhibit the maximum number of solar panels.

As usual for the solar thermal industry, this mandate is geared toward solar PV, and so are two recent mandates from two California cities:

The city of Lancaster, California now mandates requiring solar PV on all new residential construction. Soon after their announcement, the city of Sebastopol mandated that solar be installed on new residential and commercial buildings, as well as on major additions and renovations.

It’s too early to tell whether these city mandates will be successfully implemented and accepted by the electorate, but these are small cities compared to the entire state of California.

If you want to talk about a larger scale, look no further than Hawaii, which by law requires all new home construction and renovations include installing solar hot water systems. While Hawaii's mandate has created a solar thermal boom in the state, there are also reports of new home developers trying to avoid the mandate through a loophole that allows tankless natural gas water heaters be substituted under a variance.

That being said, according to the Hawaii Solar Energy Association (HSEA), Hawaii now has the highest per capita solar hot water use in the nation, with over 90,000 solar hot water systems currently installed. That's a hugely successful program.

Given that success, will solar water heating mandates work for California too? I would love to say yes, but it’s far from clear. Hawaii depends on imported oil and gas for most of its utility energy, so it’s not surprising that solar energy savings would be embraced by residents, despite the upfront costs and lack of incentives beyond the 30% ITC.

But California is not an island and natural gas is plentiful and cheap right now. If the state allows fracking, natural gas will be even more plentiful. Consequently, Hawaii’s embrace of solar thermal is based on expensive oil economics. While Californians are progressive and environmentally proactive, seemingly expensive solar mandates may upset homeowners who are just recovering from the recession.

That's not the case for the commercial side, however. Even without mandates, installing solar hot water on California apartment buildings is now cost competitive with natural gas systems. Free Hot Water has shown that, and we even won an Intersolar Award recognizing that fact.

So, the solution for the lack of commercial solar thermal in California may not be solar mandates, but simply increasing consumer awareness about its cost competitiveness. That is, if Free Hot Water can design a solar thermal system for a renovated apartment building that is cost-competitive with natural gas before incentives, why wouldn’t any California architect or developer choose the solar solution and save on the building’s operating costs?

Most likely, they would, but they just don’t know the facts. Perhaps solar thermal mandates in California would at least bring attention to cost competitiveness. On the other hand, it may just demonize the solar thermal industry and cause a consumer or business backlash. So, let's all try the education and outreach solution first.

Source: Renewable Energy World

Author: Tor Valenza is a solar communications consultant for Free Hot Water, a solar thermal engineer and procurement company based in San Jose, California.

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