Solar Hot Water Incentives

Panels on the roof of this home have provided domestic hot water and space heating for years.

My last column focused on our man-made solar eclipse, some of the damage that results from drilling for fossil fuels and ways we can reduce our need for natural gas by using the sun to heat water and even our homes. A new solar hot water rebate program is in the works for Nevadans, similar to the rebates already in place for photovoltaic (PV) systems. The program details are not finalized but it will be available to NV Energy and Southwest Gas customers.

To the west, Valley Electric is already implementing a solar hot water program for their customers in Pahrump. Hopefully their pioneering efforts will catch on with some of the other smaller utilities around the state. Meanwhile, here in the Las Vegas valley we just have to wait a bit longer – or so I thought.

I was recently pleasantly surprised to learn that Southwest Gas has already created a solar hot water rebate program. The program is so new that it is not yet listed in the Database of State Incentives for Renewable Energy (, a primary reference for financial incentives across the country. The “Solar Thermal Advantage Rebate (STAR) Program” provides rebates for qualified “high-efficiency solar thermal water heaters and solar thermal space heating installed in conjunction with natural gas water heaters and/or natural gas furnaces.” The program is available to Nevada residential customers through November 30, 2010 (unless funding is depleted sooner).

The program provides a rebate of 30% of the installed cost up to $1,500 for solar water heating systems and up to $3,000 for systems designed for space heating. Customers can apply for both rebates if applicable for a maximum rebate of $4,500. Systems must be properly installed and certified for performance so make sure you follow the guidelines carefully in order to qualify.

The rebate can be used in conjunction with the existing 30% renewable energy federal income tax credit. I’ll give a hypothetical example. Let’s assume you install a domestic hot water system for $6,000 (actual costs can vary significantly depending on the contractor, system type and capacity). That’s $4,500 after the STAR rebate. At tax time, you can recoup 30% of the after-rebate cost, making the net cost $3,150. That’s a 48% savings – not a bad deal for a system that might well provide 80% or more of your hot water needs for the next couple of decades. Businesses take advantage of incentives and tax credits all the time – why shouldn’t we?

Whether this is a good investment for your particular situation depends on a lot of things, but for many people in this climate, it could be a very good time to invest in a solar hot water system. It helps to view this as an investment; not just for long term financial gain but also in our future. The more we factor in the true cost of our fossil fuel consumption, including the fact that it is a finite resource, the greater our return on investment.

Although the STAR program provides a rebate for solar space heating, this column is focused on domestic hot water since this will likely be the most common system by far. These systems typically have a much smaller footprint on the roof, compared to PV for example, making solar hot water accessible to a much greater percentage of homeowners.

Perhaps the biggest hurdle in the whole equation is finding a good contractor who can provide the right system and install it properly. Choices are limited but should be increasing with these new incentive programs.

Thanks to Southwest Gas, programs like STAR will help us build a stronger, more diversified economy in our state. This is the shift we need. Take advantage of the program if you can. We’ll all breathe a little easier and you’ll really enjoy those solar-heated showers, I guarantee it!