Turning up the heat on solar thermal projects

When the Loveland Housing Authority wanted to save money for residents at the Maple Terrace apartment complex in 2010, it teamed up with local nonprofit The Atmosphere Conservancy and other partners in tapping the sun for help.

The partners financed and built a massive array of 50 solar-thermal collectors on apartment roofs that on a blue-sky day can heat more than 2,300 gallons of water for cooking, bathing and other uses. Over its 25-year lifespan, the system will heat more than 20 million gallons of water and save more than $5,000 a year in heating costs that would otherwise need to be met by fossil-fuel energy.

While solar photovoltaic projects that use cells to convert the sun’s energy to generate electricity have noticeably increased in the state’s New Energy Economy, solar-thermal systems, which function by collecting solar radiation for hot water or space heat, have remained in the shadows.

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Solar-thermal projects have shaped up as a small and “quiet” market in the state, according to Tony Frank, executive director of the Colorado Renewable Energy Society — not to be confused with the Colorado State University president of the same name — but the sky’s the limit for growth. “It’s a great opportunity being missed,” he said.

In late January, a coalition of solar interests released what they called the Colorado Solar Thermal Roadmap to increase the profile and consideration of such projects.

According to the projections in the roadmap, Colorado can grow solar-thermal installed capacity from the current equivalent of 150 megawatts to more than 16,500 megawatts by 2050, boosting annual revenue from a $16 million market to a billion-dollar juggernaut. The potential growth would add 15,000 jobs in solar thermal sales, manufacturing and installation by 2030, and 9,000 more by 2050.

Colorado is especially well-suited for solar thermal because of its climate, geography and energy-use patterns. The state’s 300-plus days of sunshine combined with the mix of high and low temperatures are ideal for capitalizing on the ultra-high efficiency of the systems, while our cold winters create typically high heating loads.

Solar PV panels function by converting 15 to 20 percent of the energy that hits the system. But modern solar thermal collectors – far more sophisticated than passive solar heating that’s been used to warm water for centuries – gather 80 percent and sometimes more of the sun’s energy. The thermal energy is then distributed through piping into a building to be connected to a hot-water heater or HVAC, a radiant heating system, or even a backyard pool.

“On a lot of systems, the payback is very fast,´ said Justin Topel of Forge Mechanical in Fort Collins. “There are net positives from Day One.”

Topel’s company has installed a handful of thermal systems in the past year or so, ranging from arrays for single-family homes to the major project for the Maple Terrace apartments. He said solar thermal works especially well in complementing geo-exchange, or geothermal, systems that pull heat from the earth and can lead to ground freezing in very cold times. Solar thermal offsets those risks.

But despite the benefits, there are significant upfront costs. For example, a small building or three-bedroom home might pay $10,000 to purchase and install a solar-thermal system, which would include solar collectors for a roof, mounting, piping, insulation, wiring, pumps and circulation equipment, controls, and a storage tank.

On the other hand, once up and running, solar-thermal systems cost just $50 a year in additional electricity to run, while saving much more in lowered household electric use. Depending on a building’s water and heat use, payback to a break-even point can occur after eight to 12 years, Topel said. For major water users, such as restaurants or breweries, return on investment can occur even sooner.

So why has solar thermal languished while other renewable industries have taken off in recent years? Lack of education and understanding are part of the conundrum, advocates say.

“Ninety-five percent of the people who I tell (about) solar thermal ask, ‘But how much electricity does it produce?'” Topel said. Explaining the distinction between thermal heat and electricity clears up some of the confusion, but consumers – and governments – tend to home in on energy sourcing and kilowatts instead of energy efficiency and BTUs.

Tony Frank, of CRES, said Colorado – and many other states – have fixed a laser-like focus toward affecting where our electricity comes from, using policies such as the renewable energy standard that mandate a percentage of electricity to come from solar, wind and other alternatives to fossil fuels. But forgotten in the conversation and policy are efficiency improvements. “Thermal is not part of the mix” when we’re talking about building our renewable-energy standard, said Frank.

Insufficient financial and regulatory incentives also factor into the lag in solar-thermal projects. Since projects must cover 50 percent or more of a building’s energy load to qualify for certain federal renewable breaks, many solar-thermal systems don’t make the cut. That leaves financing up to owners who are understandably cautious to put up the investment. Restaurants might be ideal solar-thermal customers, but Topel said he’s heard from potential clients and bankers that many aren’t in a position to land a loan or to front the funds on tight profit margins.

“Looking at the whole picture is the hard part for most people,” Topel said, especially since natural gas or coal-powered electricity come with their own subsidies and breaks that most customers take for granted, if they consider or recognize them at all.

With the rollout of the solar-thermal roadmap, Frank said industry interests hope to standardize permitting and best practices. State solar groups successfully advocated for a new law last year for more consistent rules and limited permitting fees for PV projects. Setting similar controls for solar thermal is a whole other effort, Frank said, because system installations impact electrical and plumbing and water services within a building.

“We’re creating awareness to align the market and business drivers,” Frank said.

That, at least, is the hope.

Joshua Zaffos is a writer based in Northern Colorado who covers environmental issues for the Business Report. Contact him at news@ncbr.com.