Doing the Math on Solar Water Heaters

[Geee]

American Thinker:

The Massachusetts Clean Energy Center (MassCEC) claims that "solar hot water systems are great because they provide an easy and low cost way to create hot water in a clean and sustainable way."

On the Environmental Protection Agency's Energy Star website, we read:

While the initial purchase price of solar water heaters is high compared to standard models, they can be cost effective. That is because the sun's energy is harnessed to reduce operating costs up to 90 percent.

To overcome this "initial purchase price" obstacle, government grants are needed so all these wonderful cost savings can be realized. To this end, a myriad of tax credits and rebate programs has been created in federal, state, and local governments. The Department of Energy has assembled a few of these programs in its Database of State Incentives for Renewables and Efficiency (DSIRE).

Picking at random from a page-long list for Massachusetts, we find the Commonwealth Solar Hot Water Residential Program, which gave out grants of up to $3,500, or 25% of the installation cost over the last year and a half, with $1 million budgeted for residential and $1 million for commercial locations. The Commonwealth Solar II Rebates program offers a $4,250 rebate for residential photovoltaic installation.

A recent e-mail from a municipal agency called the Cambridge Energy Alliance (CEA), not listed with DSIRE, in association with the MassCEC, offered rebates of up to $2,000 to install a solar water heater (SWH) on my roof.

I spent the afternoon crunching a few numbers and concluded, as suspected, that solar hot water systems are not "cost effective" and do not "provide an easy and low cost way to create hot water." The calculations are simple, but the relevant data is often obscured, as we shall see.

Three essential figures are needed:

1. The annual residential cost of heating water with natural gas.

-The EPA's EnergyStar site reports that the annual energy bill for a single family home is approximately $2,200. Of this, 14%, or $308/year, is spent to heat water. In the fine print, however, you read that this information was derived from a Lawrence Berkeley National Laboratory study from 2009, using an "average price of natural gas [of] $13.29 per million Btu." The closing price on June 20, 2012 was $2.51 per MMBtu.