photo credit: Abri_Beluga

Solar water heaters are placed on roofs and absorb the sun’s energy to heat water, which is then stored in a water tank for later use.  Some include a gas heating system for backup. Unobstructed Southern sky exposure is most optimal. Sometimes the units need to be tilted to face the sky, making for some unsightly installations.

California utility regulators have recently approved rebates of $350 million over the next 8 years to encourage the use of solar water heaters. The $1500 rebates could reduce the cost of these expensive solar water heater by 15% to 25%. Average systems cost from $6500 to $8000.  Rebates are retroactive to August 2009, so apply if you already had a system put in. Many other states have similar rebates.

Multifamily and commercial buildings are also eligible for special rebates up to $500,000. The goal is to add solar water heating to reduce natural gas use by about 200,000 single-family homes.

Local utility companies administer the rebate, so check with your local utility company. PGE has a page outlining the program that also covers San Diego Gas and Electric (SDG&E), Southern California Edison (SCE) or Southern California Gas (SoCalGas). California’s rebate is in additional to the Federal Energy Tax Rebate.

The payback of a Solar Water Heater occur over a long period. Water heating bills should drop 50%–80%, making payback times at least 10 years after rebates. Systems should last for 25+ years. Gas rates many rise in the future, helping to shorten payback times. SEIA.org has a dealer locater.

California recently approved several new bills that will help spur growth in solar power. They affect how California’s power market works and encourage people to setup more solar panel systems.

The first bill AB920 requires California’s utilities to buy extra solar power you generate.  This usually occurs during most day time hours, when you are generating more power than you are consuming. If you made more over the course of a year than you used, before you would receive zero.

A second bill SB32 expands “feed-in tarriffs” that set prices for renewable energy from businesses with solar arrays.

Another bill SB695 raises electricity rates, based on the inflation rate, of customers who use little power.

Costco has a special discount on REC Solar’s Solar electric systems for Arizona, California, Colorado, Hawaii, and Oregon for Costco members.

A typical system priced 1/10/2009 for Colorado:

$ 9,697.22 Solar Equipment – 3Kw system
$13,162.97 Installation
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$22,860.19
- $10,780 Colorado rebate
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$12,080.19 Costco Member purchase price

Possible additional savings:
- $92.40 1% rebate from Amex TrueEarnings Card
-$184.80 2% Costco Executive member reward
-$3624 Federal Tax credit
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$8178.99

Pretty sweet deal!  Check with your local Costco and tax adviser for your pricing.

Interested in Solar? Sunpower has free solar power site evaluations.