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Solar Water Heating

Solar-powered heating incentives.

TEP is offering incentive payments for residential solar water heating to encourage the installation of solar power. Solar water heating is appropriate for areas that receive a relatively high amount of annual sunshine.

2013 Incentive Status:
View and download the fact sheet.

Is solar water heating right for me?

Depending on the availability of unshaded sunlight and the amount of water usage at your home, solar water heating can be a very efficient technology. The decision to install one of these systems on your property should be made after you consider a variety of factors. Local building codes, availability of sunlight, maintenance requirements and the cost of other alternative energy options, should all enter into your decision to install a solar water heating. In most populated areas of Arizona there is plentiful sunshine and utility incentives plus federal and state tax credits make this a very economical choice.

What are the benefits of installing solar water heating?

  • Produces no emissions and is replenished naturally
  • Reduces greenhouse gases
  • Saves the release of 2 lbs. of carbon dioxide (CO2) for each kilowatt hour (kWh) produced
  • Saves the use of one-half gallon of water for each kWh of solar energy produced
  • Saves the release of other emissions that result from the burning of fossil fuels such as nitrogen oxides, sulfur dioxide or mercury
  • Makes use of one of Arizona's greatest natural resources – sunshine
  • Provides customers with options to reduce their electric bills
  • Is very cost effective with payback periods of as little as five years

What incentives are available to TEP customers?

Up-Front Incentive1 — 20-Year Renewable Energy Credit (REC) Agreement
$0.40 per kWh to a maximum of $1750
  1. An up-front incentive (UFI) provides customers with a one-time payment based on their system rating, which is in kWh savings. In turn the customer would sign a credit purchase agreement assigning TEP the RECs for 20 years. To qualify for the UFI your solar collector must have a minimum 10-year manufacturer's warranty.

Customers may qualify for federal and state tax credits to further reduce the cost of the system. Talk with a tax professional about current tax credits available to you for a renewable energy system. You can also view federal and state tax credits at dsireusa.org.

Note: TEP incentives can cover no more than 40% of the total system cost. TEP incentives in combination with all federal and state tax credits can be no more than 85% of total project costs. A customer must cover at least 15% of total project costs.

Who is eligible for the incentives?

  • You must be a Tucson Electric Power customer.
  • The solar water heating system must be installed at a Tucson Electric Power service address.
  • You must purchase and install a qualifying solar water heating system for this incentive.

What size system would I need to meet most of my energy needs?

To choose a properly-sized solar water heating system, you'll need to consider the number of people living in the home, water usage, the size of the home and the output of the water heating system. A qualified installer can help you make the correct choice to meet your needs. The typical system installed in Tucson is sized for 2,750 kWh in annual savings. The average Tucson home uses 11,000 kWh of electricity per year. Typically, heating water makes up approximately 25% of the electric bill.

What is the application process?

Download a copy of the application process – PDF 75 KB

How long do I have after I receive my reservation confirmation to get my system installed?

Residential customers have 180 days to install their system and pass code and technical inspections.

Extensions will generally not be granted. However, under some extenuating circumstances an extension may be considered. When an extension is requested it must be submitted to TEP in writing and include the reason for the request. Please be aware extensions are granted solely at the discretion of TEP.

How is the TEP incentive payment calculated and when can I expect payment?

Customers will receive an Up-Front Incentive (UFI) providing their system carries a ten-year warranty on the collector, heat exchanger and storage units.

Up-Front Incentive (UFI) Calculation:

OG-300 rating in annual kWh savings_____ x $0.40 per kWh to a maximum of $1,750 or
TEP Payback = Total Cost - 15% (Customer's Portion) - Federal Credit (30% system cost less TEP incentive) - Max State Credit ($1,000)

Incentive payments are processed only after a final inspection of the system is completed and approved by jurisdictional inspectors and by TEP. Provided all necessary program documents have been received by TEP, incentive payments will be processed within 30 days of approved final inspection.

Will my solar water heating system have to replace my present system or be a supplement?

In general, the existing hot water tank will need to be replaced. However, with certain systems, your existing hot water tank can be retained to add additional storage capacity. The specifics of your existing water heater, the space available for the solar water heating tank and the type of solar water heating system you select will determine the options available to you. You should discuss your tank options with your installer.

What savings can I expect from my system?

The OG-300 rating is the assumed annual energy savings in kWh of electricity saved. This rating method assumes certain average use factors including number of people in a home, morning vs. evening use pattern, temperature of cold water and other factors. All of these factors will affect your savings. Use the OG-300 rating as a guide in comparing different systems. Ask your installer for details. The typical system installed in the TEP service territory is 2,750 kWh savings annually and the typical residential electrical usage is 11,000 kWh. These systems may save up to 25 percent off of your bill. Again, actual savings depend on household behavior.

What is the potential time period it will take for my system to pay for itself?

With the present tax credits and the incentive payments available from TEP, the payback period for a solar water heating system can be five years or less. To estimate the length of time it will take to recover a new system's cost, divide the cost by the estimated savings per year.

What are some of the basic equipment criteria?

All solar water heating systems must be rated by the Solar Rating and Certification Corporation (SRCC) and meet the OG-300 system standard.

Systems that include OG-100 collectors, but are not certified under OG-300, are allowed but will need to be verified by submitting either a testing certification for a substantially similar system prepared by a publicly funded laboratory or by submitting an engineering report stamped by a registered professional engineer detailing annual energy savings.

All systems should be installed so that the energy collection system is substantially unshaded and should have substantially unobstructed exposure to direct sunlight between the hours of 9:00 a.m. and 3:00 p.m.

The system must be a "closed loop" system with the exception of active, open-loop systems that have a proven technology or design that limits scaling and internal corrosion of system piping. These systems should also include appropriate automatic methods for freeze protection and present stagnation temperatures that exceed 250 degrees Fahrenheit under all conditions at the location of installation.

What is the SRCC and how are systems certified under OG-300?

The Solar Rating and Certification Corporation (SRCC) is an independent, non-profit organization formed in 1980 that certifies and rates the performance of solar energy equipment.

OG-300 is an overall water heating system rating that encompasses the entire solar system (collectors, controls, storage tanks, heat exchangers, pumps, etc). This program integrates results of tests conducted on the collector and the system with computer simulations to determine whether systems meet minimum standards for durability, reliability, safety and operation. Factors that affect total system design, installation, maintenance and service are also evaluated.

To learn more about the SRCC and system ratings, visit solar-rating.org.

Does TEP allow customers to install solar water heating systems themselves?

No. The installation of a solar water heating system is not a typical "do-it-yourself project" due to the following factors: proper use of dielectric fittings, cathodic protection measures, insulation, mounting, pump curve characteristics, pipe sizing, control wiring and low-point drains/high-point vents. All are important components that require experience to install correctly.

Am I really making a difference in the environment if I install a solar H20 system?

Absolutely! As customers use the energy from their solar water heating systems, they use less power from the utility. This allows us to reduce the amount of fuel used at our power plants, thus reducing emissions. Together, we are working today for a bright tomorrow.

Are there additional resources I can review?

Equipment Qualifications

  • Domestic solar water heating systems will be rated by the Solar Rating and Certification Corporation (SRCC) and meet the OG-300 system standard.
  • Systems that include OG-100 collectors, but are not certified under OG-300, will need to be verified by submitting either a testing certification for a substantially similar system prepared by a publicly funded laboratory or by submitting an engineering report stamped by a registered professional engineer detailing annual energy savings.
  • Domestic water heating systems shall be selected and sized according to the geographic location and hot water needs of the specific application. Reservation requests will include a manufacturer's verification disclosing that the system size and collector type proposed are appropriate for the specific application, including certification that collector stagnation temperature shall never exceed 300 degrees Fahrenheit under any possible conditions at the location of the installation. The manufacturer's verification may be presented as a manufacturer's product specification sheet and will be included in the reservation request.
  • Compliance reporting production will be based on the design energy savings submitted at time of application.
  • Active, open-loop systems are not eligible for Renewable Energy Credit Purchase Program (RECPP) incentives except for those that have a proven technology or design that limits scaling and internal corrosion of system piping. They also must include appropriate automatic methods for freeze protection and prevent stagnation temperatures that exceed 250 degrees Farenheit under all conditions at the location of installation. Details disclosing conformance with this exception shall be submitted as part of the manufacturer's verification documentation.
  • Integrated Collector (IC) systems shall have a minimum collector piping wall thickness of 0.058 inches. Details disclosing conformance with this requirement shall be submitted as part of the manufacturer's verification documentation.
  • IC units shall include certification that collector stagnation temperature shall never exceed 250 degrees F. under any possible conditions at the location of the installation.
  • The “high” limit on all domestic water heating controllers shall be set no higher than 160 degrees F.
  • Contractors must provide a minimum of a five-year equipment warranty as provided by the system manufacturer, including a minimum warranty period of five years for repair/replacement service to the customer.
  • Domestic water heating systems that are installed as an addition to an existing system or are submitted as a customer-designed system or not certified to OG-300 must be specifically reviewed and approved by the utility. The solar collector, heat exchangers and storage elements shall have an equipment warranty of at least 10 years to qualify for a UFI.

Installation Guidance

The system shall be installed with a horizontal tilt angle between 20 degrees and 60 degrees, and an azimuth angle of +/- 60 degrees of due south. It is recommended that collectors be positioned for optimum winter heating conditions at a minimum tilt angle of 45 degrees above horizontal, or as recommended by the manufacturer for the specific collector type and geographic location of installation.

All systems should be installed such that the energy collection system is substantially unshaded and should have substantially unobstructed exposure to direct sunlight between the hours of 9 a.m. and 3 p.m.

Heat exchange fluid in glycol systems should be tested, flushed and refilled with new fluid as necessary or at a minimum every five years or sooner per manufacturer's recommendations.

It is recommended that the anode rod be checked and replaced per manufacturer's recommendations, but no less frequently than every five years.

It is recommended that the system design include a timer, switch, or other control device on the backup element of the storage tank.

The collectors and storage tank should be in close proximity to the backup system and house distribution system to avoid excessive pressure or temperature losses.

It is recommended that in areas where water quality problems are reported to have reduced the expected life of a solar water heater, that a water quality test is performed for each residence to screen for materials that through interaction with the materials of the proposed solar water heating system may reduce the expected operational life of the system components. The customer should consider contacting the manufacturer to determine if warranty or operational life will be affected.

In areas subject to snow accumulation, sufficient clearance will be provided to allow a 12” snowfall to be shed from a solar collector without shadowing any part of the collector.

Each system shall have a comprehensive operation and maintenance manual at the customer's site, which includes a spare parts list, data sheets and flow diagrams indicating operating temperatures and pressures, maintenance schedules and description of testing methods and each customer must complete an initial start up and operation training review with the contractor at the time of system start up.

Ball valves shall be used throughout the system. Gate valves shall not be used.

Pipes carrying heated fluids shall be insulated for thermal energy conservation as well as personal protection.

Get Started

  1. Contact a licensed solar installer for an estimate. Please refer to the AZROC website.
  2. Meet with your installer to complete all TEP required program documents contained in the "reservation packet" which includes the Renewable Energy Credit Purchase Program (RECPP) Coversheet, W-9, Up Front Incentive (UFI) Agreement and Assignment of Payment (AOP), if applicable. The Installer is responsible for submitting the appropriate online application for your system.
  3. TEP will review your online application and the reservation packet, to ensure it conforms to program requirements.
  4. TEP will respond with a reservation confirmation letter. The letter will be mailed direct to the customer within 30 days upon receipt of properly completed reservation packet and online application.
  5. For Solar Hot Water applications the Installer must provide copies of jurisdictional approved final inspection paperwork to TEP.
  6. Installer notifies TEP that installation is complete and ready for incentive processing by submitting the Certificate of Completion to TEP.
  7. TEP, at their discretion, will perform an acceptance test to verify system performance.
  8. UFI incentive payment is processed within 30 days of receipt of Certificate of Completion and acceptance test, provided all company documents have been received.
  9. TEP is assigned exclusive rights to all Renewable Energy Credits (REC) associated with project for 20 years.

Online Application

Residential Solar Water Heating Online Application

Documents

Visit the Southern Arizona Solar Standards Board website to learn more about best practices in solar installation.