Homeowners and businesses interested in reducing their utility costs for heating water can now take advantage of significantly increased cash rebates for solar water heating systems from the California Solar Initiative – Thermal Program.

Starting this month, the California Public Utilities Commission raised incentives for solar water heating systems that displace natural gas use by 60 percent for residential installations and nearly 40 percent for commercial applications. The increased rebates present an opportunity to invigorate the solar water heating industry while offering both residential and commercial consumers ways to save money, cut energy use and reduce their carbon footprint.

Benefits for homeowners

“The typical San Diego household consumes 45 gallons of hot water every day,” said Sarah Smith, CSE’s solar thermal program manager. “By capturing the warmth of the sun to help heat water, homeowners can save up to 75% on annual water heating costs while reducing their impact on the environment.”

The average San Diego homeowner can expect to pay about $7,300 for solar water heating installation before rebates and tax credits. Rebates from the California Solar Initiative are based on the amount of energy the system is expected to displace over the course of one year and average about $3,300 per installation for homes that heat water with natural gas.

In addition, the federal government provides homeowners a solar tax credit of up to 30 percent of the system costs including equipment and installation. The federal investment tax credit is set to expire for residential installations at the end of 2016 and decrease to 10 percent for commercial installations.

Beyond domestic water heating

According to Smith, a solar water heating system can displace much of the natural gas used for commercial water heating and helps achieve profitable and sustainable operations while providing a safeguard against future natural gas price increases. “Virtually any business with a need for hot water and a roof exposed to the sun can take advantage of solar water heating,” she said.

For commercial operations, solar thermal systems can supply heated water for a wide variety of applications, ranging from hand sinks and showers to high-volume commercial dishwashers and heavy-duty laundries. They can also heat or cool indoor spaces and supply low-temperature heated water for industrial processes.

Property owners of multitenant facilities, such as apartment buildings and dormitories, with large hot water loads can benefit from solar water heating by reducing operating expenses and achieving a “green” appeal for eco-conscious residents.

Rebates up to $800,000 per installation are available for commercial and multifamily properties, as are certain tax credits. In addition, commercial, public and multifamily swimming pools are eligible for solar thermal rebates that can cover up to 50 percent of the cost of the solar pool system.

For more information about solar water heating and available incentives, contact CSE at 858-244-1177 or visit solar water heating. We also offer free workshops for residents on the basics of solar water heating.