SOLAR HOT WATER HEATERS.  Hot water from the sun.   It is the one source of energy that isn't going to run out anytime soon.  And its free.   However, harnessing that energy source isn't free.  But is it a good deal?

For San Diego households,  perhaps.  We're blessed with plenty of sun, so solar hot water heaters stay happy and warm throughout the year.   If your SDG&E gas bill is somewhere in the $75-$85 per month, then you could buy a solar hot water heater, fully installed, and have the investment pay for itself in about 5-7 years.  If your monthly natural gas bill is higher, then the payoff could be quicker.   And if your water is heated by electricity, rather than natural gas, then the payback on a solar water heating system could be as quick as 3 years. 

The upfront cost for the installation of a 48-square-foot collector and a 40-gallon storage tank should run about $7500.  After the federal tax credits and an California Solar initiative (CSI) cash incentive for residential solar hot water heating, the out-of-pocket cost of a solar water heating system will end up to be about $4,000.  

Other benefits to the investment include an increased property value (but exempt from increase property tax) and protection against future natural gas rate increases.

Consumer Reports magazine reported in its October 2009 edition that solar hot water heating made sense for customers, especially if they live in the Sunbelt areas of the U.S.   It liked flat panels the most.   It reported that the Rheem RS47-21BP, cost about $5,000 to $6,200 with professional installation, and the Heliodyne 50180, $6,000 to $7,500.  Both use flat-roof panels to absorb the sun's rays. Both cut our energy use by about 32 percent on sunny days compared with an electric water heater.

The San Diego Center for Sustainable Energy uses a more conservative savings estimation.   It reports that with an installed cost of $6,500 with an incentive rebate of $1,200 and a federal tax credit of $1,590 the resulting net cost is $3,710. Using a conservatively calculated utility rate escalation over 25 years as well as low energy savings figures, they estimate that  solar system backed up by a natural gas water heater will reach the break-even point at around 13 years - an annual return of 6 percent. One that is backed up by an electric water heater will break even in around seven years for an annual return of more than 10 percent.  Importantly, if utility rates increase beyond conservative levels, the cost recovery times decrease quickly.  With natural gas currently at historically low prices,  the likelihood of rather sizeable gas price hikes is high.   

If you are interested in installing solar, there are a few things to consider: 

1. Hire only licensed contractors. Check the contractor's license number by calling the Contractors State License Board at 1-800-321-2752 or visiting www.cslb.ca.gov.
2. Hire insured contractors. Always insist upon a certificate of insurance for general liability insurance. Uninsured workers who are injured on the job can file damage claims against the homeowner.
3. Get multiple bids.  We recommend at least three (3) bids and use a written estimate, so you can compare apples to apples. 
4. Never sign a contract under pressure. Insist on at least 48 hours to study any contract.
5. Pay as you go. To start a job, never pay more than 10% down or $1,000 -- whichever is less. Hold back 10% for the final payment after the entire job is complete. Never pay for work before it is done.
6. Never pay cash.  UCAN urges that you use a credit card so that you can use the legally mandated buyer protections associated with credit card purchases. Or, you can pay by check. But not cash.

The San Diego Center for Sustainable Energy, which administers state-sponsored renewable energy programs in San Diego,  lists two companies that facilitate solar hot water heating installations for residential customers: 

Solar Alliance of San Diego
3111 Camino Del Rio N. #400
San Diego, CA 92108
Toll Free: 877.642.1038
Phone: 619.528.2277
Fax: 619.528.2297
www.solaralliancesd.com

San Diego Solar Water Heating
3977 Honeycutt St #2
San Diego, CA 92109
Phone: 858.352.6083
Mobile: 858.382.4867
matt@sdsolarhotwater.org

We secured a bid from the Solar Alliance which serves as a marketing agent for local solar contractors.   They install a Fafco Solar System  (4' X 12') with a 40-gallon storage tank that sits next to your existing water heater. Their bid was $6750 for the full installation.  Less the federal tax credit and the state cash incentive, their advertised out-of-pocket cost was $3,991.