Manufacturers are reducing costs of systems to remain competitive with other energy sources.

A. O. Smith’s Cirrex is an all-in-one-system, which simplifies specification and installation for the contractor. Photo credit: A. O. Smith

Nearly 75% of Americans responding to a Gotham Research Group poll last summer agreed that the solar water heating industry will produce jobs and help the American economy. Nearly half of respondents have generally positive perceptions about solar water heating; the remainder didn’t have enough information to have an opinion.

Solar energy is considered to be the energy source most deserving of government support - surpassing natural gas, oil, nuclear and wind energy, the survey notes.

When asked about solar thermal applications, only 63% of respondents were aware that solar energy could be used to heat water, heat and cool buildings, heat swimming pools and produce electricity. Nearly half say they were likely to consider installing a solar water heating system in their homes.

The two obstacles to having these systems installed? The cost of purchasing the system (72%) and the maintenance costs (56%).

For industry manufacturers, this illustrates the conundrum they face with consumers and installers in a slowly recovering American economy: How do they produce high-performing, quality products while reducing the cost to the end-user?

“We need to reduce the cost so we can be competitive with other sources of energy,” notesRex Gillespie, director of marketing atCaleffi North America. “If you can reduce labor costs 50%, contractors can install quality products yet give homeowners a much better value.”

Bradford White offers 32 water heaters for use in solar applications. Photo credit: Bradford White

This means better technology for increased efficiency, which helps lower installed costs.

“Older technologies are complicated and expensive,” saysRod Hyatt,Heat Transfer Products’ national solar products manager. “Today’s technology gives us more design options and smarter design options to make systems more efficient for carrying the load. We can make the investment worth the customer’s while, especially during the shoulder seasons.”

Installed solar photovoltaic systems dropped 20% in 2011, the Solar Energy Industries Association reports, due in part to lower component costs, improved installation efficiency, expanded financing options and a shift toward larger systems nationwide. And solar PV installs reached a record 1,855 megawatts of capacity last year, about a 109% growth rate.

Solar water heating systems installed in the United States today serve 1.5 million homes, the SEIA says. In 2010, 35,464 solar water heating systems and 29,540 solar pool heating systems were installed, heating about 65,000 homes and businesses - a 5% increase from the previous year. Solar heating and cooling is 9% ($400 million) of the industry’s total domestic value.

Caleffi offers 84 different Energy Star-certified solar water heating systems for residential homes. Photo credit: Caleffi

Tax credits and rebates

Of course, the cost of energy makes a big difference on whether homeowners make changes to their heating and cooling systems. As we go to press, gas and oil are spiking to record highs, with some energy experts predicting even higher prices this summer. This may give a boost to renewable energy projects, yet many homeowners are still dealing with job loss or reductions in pay.

Tax credits, such as the 30% federal tax credit for installing renewable energy equipment that is set to expire in 2016, and state and utility rebates can only help the implementation of solar thermal systems.

“We’ve seen modest growth within the residential market for solar water heaters,” saysDavid Chisolm, director of marketing atA. O. Smith. “However, there are specific areas of the country where interest in solar water heaters is particularly high. These are generally areas where local utility rebates are at their highest, usually matching or exceeding the federal tax credit level. We’ve found these rebates to be extraordinarily effective at stimulating the solar water heater market and motivating customers to make the switch.”

The Utility Solar Water Heating Initiative (, a program funded by the U.S. Department of Energy and the National Renewable Energy Laboratory, promotes utility solar water heating programs - residential and commercial - and provides information about these programs to utility companies, energy service providers, manufacturers, distributors and installers of solar water heating systems.

“Cheap natural gas puts pressure on the solar thermal industry,” Gillespie notes. “People want to know how much can they really save. In the Northeast, where homes use a lot of heating oil, solar looks more economical.”

He adds that some states have cut funding for renewable energy and reduced incentives to balance their budgets, yet states such as California and New Jersey believe it is important to fund renew-able energy projects. (The Database of State Incentives for Renewables & Efficiency has updated information on state, local, utility and federal incentives that promote renewable energy and energy efficiency.)

HTP’s Versa-Hydro Solar is a highly efficient (96%) modulating condensing boiler built into its own stainless-steel buffer tank. Photo credit: HTP

Spreading the message

While there is tremendous support for solar hot water, education is still needed to build awareness of the benefits of solar hot water systems for homes, schools, laundries, hotels, hospitals, nursing homes, apartment buildings and restaurants.

“For consumers, the message is that solar water heating today is technically simpler, better performing and longer lasting with less maintenance,” Hyatt says. “Contractors need to get up to speed on the new designs and technologies in order to get these projects.”

Many industry manufacturers provide training - webinars, factory training, in-the-field training - not only on installation techniques, but system design, too. They may also help in marketing solar thermal systems to your customers.