Recently in Solar Thermal / Water Heating Category

With solar electricity generating more than one terawatt-hour (one billion kilowatt hours) of electricity in the United States in 2010 and continuing to expand rapidly, the key question is, "How can companies best capture value as the industry grows?", said Michael Rogol, global PV analyst and CEO of Boston-based PHOTON Consulting.

Solar business  opportunities in installation, financing and related services

"The U.S. solar power sector is very profitable, but value is migrating from companies that manufacture toward companies that provide installation, financing and other services. As profit migrates, solar companies and utilities have at least seven models to capture value," said Rogol, during his presentation at the 2010 Solar Terawatt-hours Conference Series  in San Francisco.

Models to capture value in Solar Business Opportunities

• Solar equipment and software engineering and manufacturing
• Related equipment manufacturing such as sensors, monitors and regulators
• Installation and maintenance of installed systems
  
• Regulatory auditing - zoning, codes, renewable credits, etc .
  
• Renewable Energy Credits
  
• Equity investment opportunities
  
• Sales, marketing and outreach about solar energy
• Research, management and strategic consulting services
• Financing of solar systems (residential, commercial and generation)
• Tax incentives and rebates can add to bottom line profitability
  

Value Creation with Solar Energy

Strong value creation, including being low cost suppliers, agile traders, value-added service providers, system developers and bundlers of solar power with other technologies. For traditional electricity companies, the biggest challenge, Rogol noted, is to adjust their traditional businesses to create value from solar electricity.

Rogol showed how Solar Business Opportunities focusing on lower module prices are enabling swift growth in the North American solar market and how, as this occurs, profit within the sector is shifting downstream. The key to success, according to Rogol, is a strong, profitable business model capable of "unlocking value." He provided several key examples of strategies for strong value creation, including being

• low-cost suppliers,
  
• agile traders,
  
• value-added service providers,
  
• system developers and
  
• bundlers of solar power with other technologies.
  

For traditional electricity companies, the biggest challenge, he noted, is to adjust their traditional businesses to create value from solar electricity.

Solar consultants model company, geographic and industry projections from the outside-in, cross checking company announcements with providers and buyers. Photon PV data consists of historical and five-year forward projections for price, volume, revenue, cost, operating profit, operating margin and demand for c-Si and thin film technologies.

"This is not the dot-com boom with easy access to capital. Alternative energy companies need to build profitable businesses largely on their own. To do this requires detailed understanding of changing solar power market dynamics and how the electricity sector is evolving across North America," said Rogol.

Electricity is becoming the energy source of choice for a greener economy because it is possible to generate and transport electricity without the greenhouse gas residuals of petroleum and coal based generation feedstocks.

To support companies as they assess strategic moves in solar power, PHOTON Consulting publishes three in-depth business research reports each year focused on

• company risks,
  
• market risks and
  
• sector risks.
  

PHOTON Consulting's research reports provide solar companies at every step of the supply chain with the tools to make fact-based decisions in terms of price, volume and strategy. 

PHOTON Consulting is the largest dedicated solar energy research consultancy and is a leading supplier of in-depth research, management and strategic consulting services specific to the PV sector. With the deepest, broadest integrated coverage, PHOTON Consulting tracks the solar energy sector from feedstock to factory gate to end customer in every active and emerging market.

PHOTON Consulting is a robust source for research and analysis in solar power based on extensive research and data in the sector. For more information on PHOTON Consulting, visit the Company's website: http://www.photonconsulting.com.

The climate-change fighting, energy efficiency California Statewide solar water heating rebate program, called "CSI-Thermal" seeks to place @200,000 solar water heaters in California in its single family and multi-family program that runs through 2017.

Applications will be accepted April 1, 2010.

The CSI - Thermal program is being developed and is expected to run from April 2010 through 2017. A 30 percent federal tax credit is also available on the installed cost of the system less the rebate.

The goals of the CSI Thermal Program are to:

· Significantly increase the size of the solar water heating market in California by increasing the adoption rate of solar water heating technologies, including achieving:

o Installation of natural gas-displacing systems that displace 585 million therms, equivalent to placing a solar water heater on 200,000 single-family homes;

o Installation of electric-displacing solar water heating systems that displace 275.7 million kilowatt-hours per year of electricity by the end of 2017; and

o Expansion of the market for other solar thermal technologies that displace natural gas and electricity use, in addition to solar water heating.

· Support reductions in the cost of solar water heating systems of at least 16 percent through a program that increases market size and encourages cost reductions through market efficiency and innovation.

· Engage in market facilitation activities to reduce market barriers to solar water heating adoption, such as high permitting costs, lack of access to information, and lack of trained installers.

This rebate program is a four-step declining incentive structure over the life of the program and the rebate is calculated based on the expected energy savings of your solar water heating system. Incentive amounts depend upon your current water heating fuel source (natural gas or electricity).

Residents who heat their water with natural gas may receive a maximum incentive of $1,875.

Residents who heat their water with electricity may receive a maximum incentive of $1,250.

Commercial or multifamily buildings who heat their water with natural gas may receive a maximum incentive of $200,000, while commercial or multifamily buildings who heat their water with electricity may receive a maximum incentive of $100,000.

Eligible SWH Equipment for the CSI-Thermal Program

Solar water heating ( SWH) equipment must be certified by the Solar Rating and Certification Corporation ( SRCC). SRCC OG-300 certified equipment must be installed on single-family homes and SRCC OG-100 certified collectors must be installed on multifamily and commercial buildings. At the start of the program, only solar water heating technology will be eligible for the rebate. Other Solar Thermal technologies such as space heating, radiant floor heating, space cooling, etc will not be eligible. We expect that those technologies may be introduced into the rebate program at a later date.

Administration: PG&E, SoCalGas, Edison and California Center for Sustainable Energy

The CSI Thermal Program will be administered by PG&E, Edison, SoCalGas, and by the California Center for Sustainable Energy (CCSE) in the SDG&E territory.

PG&E and SDG&E, in coordination CCSE, will disburse incentives to both electric and natural gas ratepayers who install eligible solar water heating systems in their territories.

Edison will disburse incentives through the CSI Thermal Program to customers who install electric displacing solar water heating systems. SoCalGas will disburse incentives to customers in its territory who install natural gas displacing solar water heating systems.

Incentives are as follows:

Natural Gas Displacing Incentives:

· Incentives are paid up-front based on estimated first year therms displaced.

· Incentives decline in four steps based on program participation.

· Forty percent of the incentive budget is reserved for single-family residential systems; 60 percent for commercial and multifamily systems.

Electric Displacing Incentives:

· Incentives paid up-front based on estimated first year kWh displacement.

Contactor Participation Requirements

The requirements for contractor participation are currently being developed. We expect that contractors will need to attend a training workshop to learn about the application process, program guidelines and SWH installation techniques. We may also ask for verification of liability insurance, workman's compensation and auto insurance coverage. This requirement will be determined by March 1, 2010.

Contractors Submit Paperwork

Contractors will be responsible for submitting the rebate applications. The Program Administrators (PG&E, SoCal Edison, SoCalGas and the California Center for Sustainable Energy) are currently developing the application process and creating an appropriate online application database.

Installation Team Training

Some great technical resources posted in our "Contractors Corner." We recommend you become very familiar with the Solar Rating and Certification Corporation installation guidelines (www.solar-rating.org). It is also strongly encouraged for you to seek training from SWH equipment manufacturers.

The California Public Utilities Commission

CPUC will be holding public workshops in the first quarter of 2010 to discuss the following: system sizing requirements, development of an online incentive calculation tool that estimates energy savings, development of energy-efficiency requirements and metering requirements. Your input is welcome and encouraged! Refer to the CPUC website for postings on workshop details.

CSI Program Calendar

Do I have to wait until April 1, 2010, to sell and install SWH systems in order to receive the incentive? No. The CSI-Thermal Program will provide a rebate to projects that meet the program requirements and were installed after July 15, 2009. You will have to wait until April 1, 2010, to apply for the rebate for single-family projects and May 1, 2010, for multifamily and commercial projects.

San Diego Solar Water Heating Pilot Program

As part of the California Solar Initiative, the Solar Water Heating Pilot Program (SWHPP) provides incentives to business and customers who install qualifying solar water heating systems. The California Center for Sustainable Energy (CCSE) is administering the program.  CCSE is authorized to provide $1.5 million in rate payer funds as incentives for the Solar Water Heating Pilot Program. These incentives will go to qualified, licensed contractors to promote the installation of clean, renewable solar water heating systems.

How can I learn more about the CSI Program?

If you are a SDG&E electric customer seeking to retrofit your current water heating system, contact the California Center for Sustainable Energy for an informational packet and list of registered installers. You may contact them directly for additional details: swh@energycenter.org

As of January 20th, 2010, the California Solar Initiative Solar Thermal Program is underway. 

A new California Statewide solar water heating rebate program, called CSI-Thermal applications will be accepted April 1, 2010.

The CSI-Thermal program is currently being developed and is expected to run from April 2010 through 2017. A 30 percent federal tax credit is also available on the installed cost of the system less the rebate.

Solar water heating ( SWH) systems reduce greenhouse gas emissions and conserve fossil fuel resources, while cutting energy use and saving money on utility bills. Systems can offset up to 75% of the natural gas, electricity or propane used by your current water heater. SWH systems work to supplement the existing water heater - you do not need to replace or remove it.

SWH systems preheat the water used in a home or business (such as showers, dishwashers or sinks) and can help protect consumers against future gas and electricity shortages, as well as price increases. They help preserve the environment by eliminating carbon dioxide emissions and reducing harmful pollutants. For more information visit the Solar Water Heating Resources.