Solar Hot Water: Hawaiian Success Story

The constant sunshine that bathes the Hawaiian Islands and beckons tourists from around the globe is helping to ease the state’s demand for imported fossil fuels through a popular solar program offered by the Hawaii Electric Company.

Honolulu, Hawaii – November 22, 2002 [] With the state mired in a recession, though, the program’s continuation is far from guaranteed. Established in 1996, the Residential Solar Water Heating Program has ignited a vibrant solar-heating industry on the islands of Hawaii, Maui, Oahu and Molokai. By now over 19,000 systems have been installed on residential units allowing owners to derive all their hot water needs from the sun for at least 90 percent of the year. “We’re very pleased with the program,” said Ron Richmond, technical advisor for the program. “The right combination of circumstances made this the most successful program in the country.” In addition to the islands’ favorable climate, the state of Hawaii offers financial incentives for homeowners looking to reduce their reliance on the electric grid. An instant rebate of US$750 for each system reduces the initial price, while a 35 percent state tax credit of up to US$1750 for the total cost of the installed system lends a hand around tax time. Even the federal government has backed Hawaii’s support for renewables. The U.S. military, especially the Navy, has been a staunch supporter of Hawaii’s solar water heating program. Every World War II era military housing unit that is replaced or renovated is being equipped with a solar hot water system. The Navy has nearly 1000 installed units, while the Marines have close to 200. The Army recently retro-fitted 610 existing units with solar thermal systems, and the Air Force and Coast Guard have been active as well. “The federal government has really stepped up the plate to reduce energy use on the islands,” Richmond said. The Residential Solar Water Program doesn’t actually provide for the installation of the systems – they help create a favorable atmosphere for a solar water heating industry and establish standards for the over 60 independent contractors that have become members of the program. In order to qualify for the tax credit and rebate, customers must have their systems installed by qualified program member contractors. This ensures all the systems are professionally installed and are able to achieve the program’s performance and efficiency standards. Although contractors are free to choose from several system configurations and manufacturers, most opt for open-loop systems where a solar collector is mounted on the roof of a house and water is directly heated by the sun and circulated into the building’s hot water tank. Closed-loop systems that heat a heat-transfer liquid such as a glycol-based anti-freeze solution are more frequently used in cooler climates where the temperate drops to below freezing. Hawaii relies heavily on imported fossil fuels with 90 percent of that fuel imported to the remote islands through a costly supply line. The economics of import dependence shed an especially favorable light on Renewable Energy and efficiency in the state, Richmond said. Unfortunately not everyone feels that way. With the state incentives due to expire in June 2003, the program’s renewal stands in a precarious position. Two factors may spell the end of the program according to Richmond. “First of all, the state is in a prolonged recession, and there is a perceived cost to the credit despite irrefutable, comprehensive documentation that it makes money for the state,” Richmond said. Studies based on economic import models for the state were conducted by private economists. The studies proved the state’s rebates pay for themselves in the savings generated, said Richmond. According to a study conducted by Hawaiian Electric Company, an average system saves five 44-gallon drums of oil per year – that’s 90,000 barrels in all. These savings have resulted in 12.2 MW of savings since the program’s inception. Each year the program eliminates 47,500 tons of carbon dioxide from entering the atmosphere and contributing to global warming. Despite the evidence, however, Richmond worries legislators may look only at the immediate gross costs of the incentives and not at the long-term benefits to the state, economy and environment. “It’s a win-win situation for everyone but the real clincher is whether or not the tax credit continues,” said Richmond. “With the countdown fast approaching, I’m cautiously optimistic.”
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