The California Solar Initiative (CSI) Thermal Rebate Program was developed by the State of California as an incentive to help offset global warming gasses related to heating water and pool systems. Natural gas (methane) is known to be a major climate change component as it is roughly 30 times more potent than CO2 and is released in every step of the natural gas process. However, just as importantly, there is an economic urgency for apartment, condo and hotel owners/managers to install solar thermal now as the CSI rebate money will be gone after July 31st, if not before!
Unique Situation for Long Beach
For the first time, Long Beach Energy Resources now offers the same gigantic rebates that have been available to So Cal Gas customers (and SDG&E and PG&E) for the last nine years for the installation of solar water and pool heating systems. These rebates are so big that they pay for 50% to 100% of the total cost of the systems! When combined with Federal Tax Credits and Depreciations benefits, a 100% return on investment can usually be achieved in the first year.
While installation of these systems may be completed up to 18 months after the rebate reservation, that reservation must happen by July 31st (or until the available funding is exhausted). This means new construction also qualifies. Once reserved, you are guaranteed the rebate as long as you complete the project.
For those of you not in Long Beach, only swimming pool heating rebates remain, with the solar apartment or condo hot water category being waitlist only. It is still worth applying since solar thermal makes economic sense, even without the rebate! By getting on the waiting list, you never know – you might get a big bonus benefit in July in the event they move funds from other categories at the very end of the program!
Understanding the CSI Rebate and Guidelines
All CA thermal solar programs and categories, regardless of where, follow the same high-quality guidelines, rules, and rebate calculations as developed for the California Solar Initiative. Only contractors that have qualified by taking a special class can calculate and obtain these rebates for their clients. Reserved in advance, the contractor handles all the paperwork and can guarantee these rebates before proceeding with the installation. Historically, these rebates have been paid in a very timely manner (30 to 60 days after completion).
Most thermal solar applications save natural gas, which is usually not a huge part of an apartment owner’s economic focus. However, the interaction of huge California Solar Initiative rebates administered through Long Beach and So Cal Gas, hereafter called CSI rebate, coupled with tax incentives end up making this the best deal ever! Under this program, most solar hot water and pool systems pay for themselves in only one to two years. Since they last for three to four decades, they will pay for themselves many times over during their lifetime with very little need for maintenance.
Replacement of Systems Installed in The 80’s: The Opportunity Is Now!
Thermal solar is a very “mature” technology, which means there will not be any breakthroughs in the future. The hot water heating systems we installed back in the 1970’s are very similar to those we install today–they just cost more now, driven by the rising cost of copper, aluminum, plastics and labor over time.
About a decade ago, the CSI studied what happened to the thousands of thermal systems installed between 1976 and 1986 (the last time we had big rebates and tax credits for solar thermal due to the Oil Embargo). While some had continued to operate for 25 to 30 years, others had been destroyed due to freeze damage, including places where freezing temperatures are rarely reached, like in Long Beach!
Due to a physics phenomenon called “radiative cooling”, the inside of glazed solar panels can reach temperatures on cold clear nights up to 15 degrees colder than the outside air, causing water to expand as ice, splitting the copper tubes inside wide open. Systems were designed to prevent this by active means (pumping water through the panels to keep them warm)…but any small failure could result in catastrophic damage: power failure, a control or pump failed and nobody knew it, sensors in the wrong place, someone unplugged or turned the system off and forgot to turn it back on, etc. I remember a case in 2002 when I saw $36,000 in damage to an apartment solar system due to an unknowing maintenance man not telling anyone that a solar control had been shorted by a hot water pipe leak!
In order to obtain any CSI Rebate, today’s systems must be completely freeze-proof. This is a particularly great opportunity for apartments or hotels which have old systems that had freeze damage especially if the tank(s) are still present. Complete refurbishment of those systems is usually very profitable in the first year! While almost everything must be replaced (except for piping, tanks and racking), the large custom tanks made in the 80’s are actually of higher quality than tanks made today, therefore, they can be relined and last for many more decades. Even if they have leaked, rusted sections can be replaced and relined for a superb finished product.
If you happen to have a building with an old, 1980’s solar hot water system – DO NOT DELAY! The economics are phenomenal to take this opportunity to rejuvenate and modify your system into a freeze-proof, over-heat proof CSI rebate-ready system. Even without the rebate, I just did a replacement estimate for a 33 unit building which is expected to profit an extra $123,000 in the next 20 years!
Solar 101: What to Consider Before Buying
Difference Between Glazed and Unglazed Solar Collectors: Solar thermal collectors work on the simple technology that when sunlight hits a black material, much of the energy is absorbed creating heat. Collectors without a glass cover are called “unglazed” and are generally only for swimming pool heating, made from black copper, plastic, vinyl or rubber materials. By running pool water through that material, heat is absorbed by the water and heats up the swimming pool.
To achieve higher temperature water, the black absorber is put inside an insulated box with a clear glass cover, allowing the sunlight in and trapping the heat. Even on a cold, sunny day, temperatures of over 300 degrees are possible from these glazed collectors, so providing domestic hot water at 140 degrees is an easy task.
In order to picture the difference between glazed and unglazed collectors think about what happens inside the passenger compartment of your car when it’s parked in the sun on a cold, sunny day. If the windows are up, it gets hot inside (aka the glazed effect). If the windows are down, you are cold (aka the unglazed).
It should be noted that glazed collectors provide significantly more gas savings for all-year pool heating applications.
Preventing Freeze Damage of Systems: Drainback vs. Glycol Options: In order to obtain any CSI Rebate, the system must be completely freeze-proof. There are two types of systems from which to choose for the typical solar hot water system to meet this requirement: Drainback or Glycol. Both have a closed loop of collector loop fluid to collect the heat, and both transfer that heat to the water through a heat exchanger.
In a Drainback system, the system is plumbed so that the collectors are empty by gravity whenever the pump is off. Since gravity never fails, Drainback systems are immune to freeze damage or over-heating issues. The fluid is water, which never breaks down or needs to be changed. These systems have only one moving part (a pump or two), and therefore have the least maintenance. They do however need to be designed and installed by an expert in Drainback systems, as mistakes can result in serious problems.
There are open “atmospheric tank” Drainback systems, and “closed” sealed Drainback systems for various configurations of facility. There is almost always a way for an experienced Drainback contractor to design a Drainback system for any application.
Glycol systems have collector loops that are filled with propylene glycol, a non-toxic type of anti-freeze. This is the common method in Europe and of novice contractors here. There are many more parts to maintain that can and do fail such as air vents, closed-loop expansion tank, check valves, flow setters, relief valves and the glycol fluid itself.
Not unlike automobile anti-freeze, glycol requires testing and occasional replacement, or damage can occur to the system. Stagnation temperatures occurring during power failures or other periods of system bypass also break down the glycol into acidic elements. The only good solution to these unavoidable power failure events is to put white sheets over all the panels on the roof when they occur…who is going to even know to do that?
Solar Hot Water Storage Tank Placement
The majority of solar hot water is produced between 10 a.m. and 3 p.m., which is not when hot water is needed in apartment buildings or condos. Therefore, a large insulated solar storage tank or tanks are necessary to store the solar heated hot water so that it can be provided as needed in the evening and the next morning. Finding a practical location for this tank(s) is the most important element to be determined, affecting the cost and size limitation of solar for any particular facility. Ideally, it should be close to the backup gas heating system–distance from the solar collectors being a less important factor.
Available space and aesthetics are of primary consideration as well. Rectangular tanks are available that allow for a more efficient use of space than cylindrical ones. The highest quality tanks for long life with no or low maintenance are polypropylene (rectangular), or vertical or horizontal steel tanks with glass or ceramic linings. EPDM and fiberglass tanks are considerably shorter lived, albeit lower cost.
Why Consider Solar Thermal Over Solar Electric if You Can Only Choose One?
We recommend BOTH solar electric and solar thermal, but if you can only choose one to do right now, we STRONGLY RECOMMEND solar thermal over solar electric and here’s why:
Rebates ROI Longevity Efficiency Cost in the Future
|Solar Thermal||50%-100% if by July 31, 2020||1-2 Years||25-40 Years||60%-90%||Installation cost will increase in future years|
|Solar Electric||None||5-8 Years||25-40 Years||15%-22%||Installation cost will decrease in future years|
Three Reasons Why It’s Important to Act Now Before This Opportunity is Gone!
Because natural gas rates are still fairly low in California, solar hot water systems mostly make sense due to the current rebate and tax incentives, which won’t be available much longer, or new construction Title 24 requirements. Therefore, here are three reasons why you should not wait:
- The CSI rebate will likely cover 50% to 100% of the cost of a system!
- The rebate is paid within 30 to 60 days of system completion and is reserved in advance by your solar thermal contractor.
- The federal solar Investment Tax Credit (ITC) is 26% in 2020 and reduces to 22% in 2021. There are legal ways to combine these incentives for tax-paying building owners that result in 100% ROI in year one! For non-profit condominium associations, the tax credit is split up among all the owners.
P.S. A special word to So Cal Gas customers: There are still solar pool rebates available until the funding runs out or July 31st, whichever comes first.
Ted Bavin is the owner and CEO of All Valley Solar (AVS). He has over 40 years of solar experience, was one of the first C46 Solar licensees granted in California (1986) and has obtained over $10 million in rebates for his clients. Considered a pioneer in the solar industry, Bavin is one of a very few experts in both solar hot water (thermal) and solar electric (photovoltaic) systems. Ted often travels to Sacramento to meet with state legislators and public officials as an expert when requested and to promote the benefits of solar energy over fossil fuels.
Born and raised in Los Angeles, Ted Bavin received his Bachelor’s Degree in Geography-Ecosystems from U.C.L.A. in 1975. Shortly thereafter, he discovered solar to be a practical alternative to conventional sources of energy. Ted’s company, AVS, in business for 34 years, serves all of Los Angeles, Ventura, Orange County and the Inland Empire. For questions or more information feel free to contact Ted.Bavin@allvalleysolar.com or call him on his mobile at 818-489-7780.