Solar Thermal in New York: A Significant Role

Solar thermal systems in New York City do not only profit from a clear sky but also from the new incentive programme, which started in March in New York State.  (Photo: Pixabay/PredragKezic)
Solar thermal systems in New York City do not only profit from a clear sky but also from the new incentive programme, which started in March in New York State. (Photo: Pixabay/PredragKezic)

A revised incentive programme in New York State has increased the number of installations of solar thermal systems that replace fossil fuels and electricity. Now, the programme’s financial resources are already nearly exhausted.

Advances in PV technology, such as increased efficiency and reduced cost, have some peo­ple questioning whether solar thermal systems even make sense. The advent of highly efficient, electric heat pumps, when combined with solar PV, now provide a hot water alternative to solar thermal that is more cost effective, at least in the residential market. Martin Holladay, a Senior Editor at the web­site posted an article in ­December 2014 entitled “Solar Thermal is Really, ­Really Dead.” He goes through several cost comparisons that show a PV-based system to be more economical in most cases, especially when a heat pump water heater is used, despite the higher heater cost. Depending on the assumptions used, and without looking at operating costs or incentives, solar heat pump-based systems range from 23-50 % less ­expensive to install.

But solar thermal still has its supporters. New York State Energy Research and Development ­Authority (NYSERDA) has updated its incentive ­programme for solar hot water systems in March of this year. The programme is designed to provide ­financial assistance to any project whose use of solar energy to heat water will displace conventional fuels including heating oil, natural gas, propane and wood, as well as projects that displace electricity. The latest incentive expands upon an earlier programme that ­provided incentives only for those systems that used solar to replace electricity as an energy source. The programme is offering incentives of up to US$ 6,000 for residential installations, and up to US$ 150,000 for commercial, or non-residential applications.

Funds for solar thermal nearly exhausted

Response to the programme has been robust. So much so that the funds for the programme extension, which were derived from the Regional Greenhouse Gas Initiative (RGGI), have already been exhausted. However, there are still funds available for those projects replacing electric systems. NYSERDA has proposed a Clean Energy Fund to the state Public Service Commission that will provide support for ­renewables regardless of what type of fuel is being replaced and they expect a decision on that soon.

According to Dayle Zatlin, Assistant Director of Communications at NYSERDA, some 213 applications have been received so far this year. This is roughly equivalent to the number received for the full year in each of the preceding years since the programme began: 2014 (217), 2013 (232), 2012 (178), and 2011 (214). The applications were evenly distributed ­between residential (49 %) and non-residential (51 %). The 121 projects completed so far this year, also compare favorably with the average of 156 completed in each of the previous program years. Clearly, the availability of these incentives changes Holladay’s calculus. Even in Holladay’s most PV-friendly case, the NYSERDA incentive would potentially drop the price tag for a solar thermal system to beat out the price for the PV + conventional hot water heater system, requiring 1.17 kW by 44.7 %, and the PV + heat pump water heater system,  requiring 0.57 kW, by 18.2 %.

Of course solar PV has incentives as well, and those will vary by state. Shawn Lessord of Renewable Rochester, a solar PV installer in Rochester, NY,  says that for the most part, installing PV will be more cost effective, though solar thermal for hot water intensive applications can make sense, especially where roof space is limited, such as in a car wash, since solar thermal is more energy intensive.

Focus on commercial systems

That opinion was shared by A.J. Heiligman, the ­Founder and President of Alternative Carbon Energy Solutions (A.C.E.S), also of Rochester, NY. His company installs both solar thermal and PV systems as well as geothermal. He said that they were focusing their efforts on commercial installations where they were experiencing significant growth. With a projected 30 % increase in business they are expecting to be hiring 2 to 3 additional workers in the near future. Their primary customers are dairy farms, laundry facilities, and car washes. The key factor, said ­Heiligman, was the “substantial need for hot water on a year-round basis.” These customers, he said, were seeing paybacks in less than five years.

That’s why the biggest opportunity for solar thermal seems to be in the commercial space. NYSERDA’s incentives have allowed Bavarian Manor Inn and ­Restaurant, in Purling, NY, with its 18 guest rooms and restaurant to install solar hot water. The site previously used an electric water heater, to heat approximately 3,800 liters per day.  The solar thermal project will use 11 solar collectors (evacuated tubes) to provide about 67 % of their domestic hot water, or 33,052 kWh per year. At 12 US$-ct/kWh, that is roughly US$ 4,000 in annual savings.

Syracuse University has installed forty separate, identical installations, each consisting of six solar collectors to provide 636 liters of hot water for showers in student housing units.  Each system produces 7,508 kWh per year, offsetting about 59 % of the site’s hot water needs.

Through these incentives, NYSERDA has opened up another path to solar. While PV and heat pumps might have the upper hand for residential use, there are plenty of commercial operations that will benefit from solar thermal.          

RP Siegel

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