FIGURE 2.
Simple Payback of Best-in-Class Systems in Two-Tank Arrangement, Co-Fired with Natural Gas
to operate. The instantaneous configuration
is optimal because the preheat tank is able to
maintain thermal stratification and the instantaneous water heater provides the remaining
heat on-demand, without standby losses.
External solar heat exchangers coupled with
a single natural gas- or propane-fired tank do
not perform well. The physical explanation for
this is that the natural gas or propane heating
element is at the bottom of the tank, in close
proximity to the heat exchanger carrying the
solar-heated antifreeze solution. Since the
lower portion of the tank is already heated by
natural gas or propane, there is less difference
TABLE 2.
Solar Water-Heating Job Years
Created in New York State*
Market 0.1 0.5 2. 5
Penetration: Percent Percent Percent
Systems Installed 1,167 5,833 29,167
Plumbing 18 88 438
Installation 53 263 1,313
Maintenance 15 73 365
TOTAL 86 424 2,116
*Based on a potential market of 1,167,000 well-oriented, simgle-family houses with
unshaded roof space in New York state.
between the solar fluid and the tank water.
New York City appears to be the most
favorable market in the state for solar water
heating, due to its relatively high energy costs
and levels of solar irradiation. For systems
with natural gas backup, the simple payback
against a conventional natural gas tank baseline is 24–43 years for flat-plate systems, 28–42
years for evacuated-tube systems and 78 years
for building-integrated systems. The low natural gas costs and lack of solar resource make
Binghamton, in south-central New York, the
least favorable market in the state. Binghamton
systems had a simple payback of 37–67 years
for flat-plate, 42–55 years for evacuated-tube
and 123 years for building-integrated systems
with natural gas-fired backup.
in temperature between the heat exchanger
and the tank water, allowing much less heat
transfer — that is, there is no stratification. The
electric element in a single tank external heat
exchanger configuration is located in the upper
part of the tank. That allows thermal stratification from top to bottom of the tank, leaving
the lower portion of the tank at a much lower
temperature, allowing for good heat exchange
Robust Market Would Yield
Fossil Fuel Savings, Jobs
Based on these findings, financial incentives would help bolster the New York state
solar water-heating industry by bringing this
technology within reach of cost-conscious
homeowners and businesses. Since consumers are apt to choose the lowest-cost option
for water heating — presently conventional
natural gas heating — an appropriate incentive
would make the effective cost to heat water
with a solar water-heating system less than that
of natural gas. This would increase demand for
the technology, which should allow economies
of scale to reduce prices.
The photovoltaics (PV) incentive program funded by the New York State Energy Research and Development Authority
(NYSERDA) offers a good model. Just as the
NYSERDA program has successfully boosted
the PV market in the state, a similar incentive
program could help grow the state’s market
for solar water-heating technology. Policymakers could craft an incentive policy that would
create the right conditions for investment in
solar thermal technology. According to this
analysis, an additional incentive of $2,000 per
system would achieve parity from a life-cycle
cost perspective, in terms of NPV. Of course,
many homeowners evaluate the lifecycle
economics in terms of another metric: payback time. The best-in-class flat-plate system
with natural gas backup has a simple payback
of 31 years for an average location in New
York state. Each $150 to $200 in incentives
would reduce the payback one year; therefore, to achieve a payback within the typical
warantee period of 10 years, an incentive of
roughly $4,000 per system would be required.
This incentive would be in addition to the
federal and state tax credits available as of
April 2008. Incentive levels could be tapered
as the price of solar water-heating technology
decreases.
A robust solar water-heating market in
New York would reduce the state’s reliance
on nonrenewable energy. Assuming that
about 1.2 million of the approximately 7 million households in New York state will be able
to reduce their fossil fuel consumption for
water heating 50 percent by using solar water-heating systems, energy savings of 171 million kilowatt-hours of electricity, 6. 5 billion
cubic feet of natural gas and 25 million gallons
of fuel oil annually are possible (Estimated
energy savings based on 2001 EIA data). Furthermore, a blossoming solar water-heating
industry would create jobs. Table 2 presents
the estimated number of jobs created at different levels of solar water-heating market
penetration. The job-growth figures exclude
contracting and back-office work, although
such growth may be substantial.
Even at relatively low levels of market
penetration, a significant number of new
jobs would be created by the proliferation of
solar water-heating systems across the state.
These would include new jobs specific to solar
water heating as well as an expansion of the
existing jobs in plumbing and contracting.
Markets in states with similar solar water-heating economics may benefit from similar
financial incentives. ST
solartoday.org SOLAR TODAY June 2009
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