Feature

by Greg Kennedy

Everyone knows that energy deregulation in California has failed to lower prices. Its promise of an efficient market system and lower competitive prices has instead illustrated the difficulties politicians and bureaucrats encounter in imposing a new free-market system on an existing and complex regulated economy.

One alternative to the raging energy chaos is solar energy. There are two basic types of solar renewable energy systems readily and commercially available: electricity and hot water. Solar electric photovoltaic systems are making all the headlines in the news. The technology of producing electric current from the sun has been around for years, but recent advances in the “conditioning” of this electricity has begun to make it a viable source of power for residential and commercial use. Twenty years ago, this technology was so expensive that it was limited to use by governments and scientists working in outer space, and citizens in remote places on Earth.

Ten years ago, direct current (DC) power became viable as an energy source for remote installations where electricity from utilities did not exist. This included third world countries and also rural installations in such locations as isolated parts of Northern California. We have also seen solar watches, calculators, roadside assistance phones and construction/traffic signage that use photovoltaic panels or cells to generate power. In almost all of these cases, the equipment and/or homes had to be designed specifically to accommodate DC power for there were difficulties in converting this power in those homes and businesses that already used alternating current (AC).

About five years ago, this problem was addressed with the commercial development of more sophisticated electric inverters or “black boxes” that proved more economical. These inverters readily converted or conditioned DC into AC current, making it compatible with our standard electrical appliances, lights and even our utility grids.The photovoltaic panels remain largely the same as they did twenty years ago, but the emergence of these inverters has made it possible to automatically and economically deliver this electricity directly to the building’s wiring and through the building’s electrical meter into the utility grid.

“Net metering” is the most commonly installed system. It allows for electricity to be used directly on site or delivered back into the utility grid with the existing electric meter crediting the owner’s account. The photovoltaic panels mounted on the roof generate DC current directly from the sun. This current is wired to the inverter or “black box” which conditions the electricity so it is compatible with standard AC current in the building. From the inverter, this current is wired directly to the electric panel. If nothing in the building is drawing electric current, this current will travel automatically through the meter into the utility’s grid. The electric meter will either slow down or run backwards depending on the building’s actual consumption of electricity. It can be designed to include battery backup for temporary power in the event of a power outage, but most of the systems only deliver power when the grid is operational. In the event of a blackout, these systems automatically shut down as a safety precaution and then start up again when it senses that the grid is operational.

In response to this energy crisis, the State of California has instituted a generous rebate program to help underwrite the cost of installing solar electric (photovoltaic) systems. They will pay $4.50 a watt toward the cost of installing solar panels that generate electricity. This, coupled with other tax incentives, can defray as much as 40-50 percent of the cost of such systems. Depending upon the size of the system, the payback has been anywhere from 15-25 years. The recent enactment of the new, five-tiered rate schedules will improve that payback especially for larger users. Fortunately, most apartment buildings are sub-metered with owners only responsible for common area lighting, elevators, heating systems, pools, etc. An important consideration is that the electrical energy these systems produce replaces the most expensive energy on the typical monthly bill. Usually a system is sized to reduce the bill to “baseline” quantities. Depending upon the building’s configuration and load, even a relatively small system can have a significant impact upon the electric utility bill.

Last winter, the cost of unregulated natural gas almost quadrupled. For those of you who were shocked by those energy bills, solar thermal systems can make economic sense. Solar thermal (hot water) systems have been around for years and can make a significant contribution to the apartment building’s energy needs. There were similar tax incentives to promote this renewable energy source twenty years ago. Unfortunately, when those tax incentives expired, the cost of natural gas remained too cheap to sustain the industry. But at current natural gas rates, a solar hot water system can contribute 50-60 percent of your hot water needs and pay for itself in seven to ten years.

Currently, only a $750 state tax credit applies to a solar thermal installation (also available for photovoltaic systems). Congress is currently working on legislation that will probably include additional tax credits for renewable energy, which will further offset the cost of either of these systems. In addition, the federal government allows a five-year, straight-line depreciation of the cost of installation.

Solar thermal systems, like solar electric systems, are designed to be totally automatic. The typical system preheats the water before entering the existing, standard water heating system. By preheating the water, the load on the existing equipment is reduced, often extending its life by as much as 50 percent. The existing water heater remains readily available for periods of time when solar heated water is not available. This system also uses panels mounted on the roof. They usually are piped to a new solar storage tank. A thermostatic controller turns a pump on and off which circulates the preheated water through the panels and back to the solar storage tank automatically. Whenever hot water is drawn into the building, it is now replaced by solar, preheated water in the conventional water heating system in lieu of cold water.

With the majority of apartment buildings containing centralized hot water systems, the solar industry has developed proven methods to integrate solar thermal systems with a variety of different heating systems. Most apartment buildings have adequate roof area to accommodate enough solar thermal panels to make a significant contribution. The technology is simple, usually with only one moving part (a water pump) that is easily and cheaply replaced.

Almost all of the solar thermal systems that you see on apartment houses today were installed 20 years ago and have long since paid for themselves. They work as well today as they did when they were first installed. As the cost of unregulated natural gas continues to rise, the benefit of these systems continues to improve. Often, solar-energy and roofing companies will work together, refurbishing both the system and the roof, ensuring a smooth and complete upgrade. These refurbished energy systems should easily outlast these second roofs.

Last, there is the benefit to pool heating systems. The cost savings are even greater than for domestic hot water. While there are few pools in San Francisco, many suburban apartment house complexes with pools benefit from solar heated pools. At current natural gas prices, the owners/operators of these pools now want to upgrade to a more permanent system, replacing their outdated plastic panels with the same quality copper panels used for domestic hot water.

For years apartment house owners have been aggressive in the use of energy conservation. They realized early on that the longevity and savings of fluorescent lights and controls made sense even with a seven-year payback. The economics are the same with renewable energy systems—only the scale and savings are more dramatic. More importantly, the life cycle of the installation is 20-25 years and unlike any other appliance—not only does it pay for itself—the economics continue to improve. The technologies are reliable, and it is a viable and proven means to save money. Beyond the number crunching, there is something satisfying in knowing that even on cloudy days these systems continue to produce hot water and electricity year around. Even in foggy San Francisco, solar energy systems have demonstrated their effectiveness with many satisfied residential and commercial customers. Depending upon your building’s configuration and timeframe, one or both of these technologies may be suitable for you.

The opinions expressed in this article are those of the authors and do not necessarily reflect the viewpoint of the SFAA or the SF Apartment Magazine. Greg Kennedy has actively worked in the renewable energy field for over twenty years. He has installed and maintained hundreds of solar water heating systems throughout the Bay Area, first as a partner at the Solar Center and now with his own company, Occidental Power. He can be reached at 415-681-8861 or on the Web at www.oxypower.com. © Copyright 2001.