Solar use beginning to shine.

Byline: SCOTT MABEN The Register-Guard

Higher power rates are leading more Oregonians to turn skyward to lower their electric bills.

Enticed by the "green" benefits of solar power - it's good for the pocketbook and for the environment - hundreds of homeowners are adding solar water heating systems.

Solar is not a new technology, but it is making a comeback. It's especially popular with residents shell-shocked by rising energy costs. Second only to space heating in electric consumption, water heaters account for a quarter to a third of a home's electricity use.

On average, a solar water system in the Willamette Valley saves about 2,400 kilowatt hours a year, according to the Oregon Office of Energy. At 6.5 cents per kwh, that's an annual savings of $156.

"If done right, a solar water heating system will look good, reduce your water heating bill by at least 50 percent and keep your energy dollars clean and local," said Christopher Dymond of the state energy office.

Oregon ranks in the top 10 states in the nation for the number of solar water heating systems installed, and the number put in this year is expected to be up 50 percent over 2000, Dymond said.

"Geographically about three-quarters of the state is very sunny. If you're living in Central Oregon and have an electric water heater, you're a fool not to do solar water heating," he said. "Because it's positive cash flow."

Solar works even in the rainy regions. Performance drops December through February, but cooler groundwater and long summer days make up for poor performance during those months. Solar water heaters work best when the water entering them is cold.

Lee and Margaret Boutell of Eugene converted last June to a solar water system that features a roof-mounted tank. They immediately saw a big drop in their Eugene Water & Electric Board bill.

"It's been real impressive," Lee Boutell said. "Right away we went from 25 to 12 kilowatt hours a day."

For the summer, the couple shut off the electricity to their old water heater and relied solely on the sun's rays to heat all their water. Even when skies are cloudy, water that comes out of the ground at 48 degrees is heated to as much as 90 degrees before it heads into the conventional water heater.

"There's nothing better than free hot water," Lee Boutell said.

Darrell Palmer, an apple orchard owner near Cottage Grove, put a solar water system in his house last May. Mindful of the energy crisis, he and his wife also replaced light bulbs with new compact fluorescents and reduced their power use.

"Overall, we're using about 35 percent less power," Palmer said. "It's a combination of things. But without question, the solar water heater is the major factor. It's a terrific asset to have in your home."

Solar water earned a bad reputation in the early to mid-'80s. Spurred by federal and state tax credits, a crop of new companies offered systems that were poorly designed and installed. Prone to freezing or overheating, many of the setups failed.

By the '90s, the industry had overcome its problems and improved the look and efficiency of solar panels and the associated components.

"Most of the public doesn't know how well solar works," said Kelly Dancer, owner of Eugene-based Oregon Solar & Water.

Dancer said that over and over he hears from customers who are saving up to 80 percent on their hot water costs.

Utility officials say such financial benefits are the main reson for renewed interest in solar.

"What really drove this was last spring when everybody started talking about the rate increases," said Joe Savage, residential program lead at Emerald People's Utility District. "Not knowing what the power costs would be, people just started calling in like mad."

About 30 of EPUD's 14,000 residential customers converted to solar water this year, and another 30 are expected to do so in 2002, Savage said. That's up from 17 customers who switched last year.

EWEB has nearly 900 customers in its service area who now heat water with solar energy, said Don Spiek, an energy management specialist with the utility. Between 75 and 80 households went to solar water this year.

"We've seen interest 2 1/2 times what we saw last year," Spiek said.

To promote conservation and reduce demand for electricity, EWEB, EPUD and other utilities also offer incentives for converting to solar water systems. These include cash rebates and no-interest loans.

The state also offers a $1,500 tax credit, based on system performance. It's a dollar-for-dollar credit, meaning that a person can reduce state taxes owed - or increase a tax return - by up to $1,500.

All that can take the bite out of a new solar water system, which costs from $2,000 to $4,000 installed.

The Boutells' system cost about $4,000. Thanks to the state tax credit and a $500 cash discount from EWEB, they cut the cost in half. They're paying for that with a no-interest EWEB loan, which adds $58 a month to their utility bill.

The Palmers spent about $3,500 for their system, and EPUD offers rebates of $600 and zero-interest financing. Because they're retired, the income tax credit didn't factor in.

However, they were able to reduce their power consumption 10 percent this year, qualifying for a special program that rewards them with conservation credits on their power bill. Those credits have offset this year's electric rate increase and are helping pay for the solar hardware.

Darrell Palmer figures that with the solar savings and other conservation measures, he'll pay for his new system in less than four years.

Most solar water hearing systems pay for themselves in three to five years. But that shouldn't be the only consideration, Dymond said.

"Focusing solely on payback and dollars saved is sort of like only buying food that tastes good rather than being good for you," he said. "When you buy a solar water heating system, make sure it has a good warranty and the company is reputable."

Dymond recommends asking a solar contractor for references, finding out how long the company has been in business and getting a written warranty.

The Boutells and Palmers, who purchased their systems through Oregon Solar & Water, each have a 12-year warranty guaranteeing all parts.

The Oregon Office of Energy maintains a list of solar water heater contractors that have been in business more than seven years.

The Legislature this year approved a specialty license for solar water heater contractors. The license, which will go into effect July 1, is intended to assure higher quality and allow those with solar specialty skills to legally get permits and do the installations.

In addition, EWEB's solar water program, "The Bright Way to Heat Water," soon may be offered to all Northwest utilities that have contracts with the federal Bonneville Power Administration. Currently, EPUD, Lane Electric Cooperative and the city of Ashland are the only utilities outside EWEB using the program, which was created to ensure quality in solar water installations.

Dymond said he's bullish on solar because the state needs more diversity in its energy portfolio, which remains heavily dependent on hydro power.

"Fuel cells, solar electric and water, wind, conservation and efficiency all are resources that we have yet to really tap," he said. "For many people, a quick return on their investment is not as important as other issues such as the positive environmental and local economic benefits of using a renewable energy resource."

SOLAR WATER HEATING INCENTIVES

State income tax credit: Up to $1,500, based on performance. The deadline to register for the 2001 tax credit is Dec. 31. Installation and certification of the system must follow by April 1. Call [phone].

Eugene Water & Electric Board: Cash discount of $400 to $600 and no-interest loan up to $4,000

Springfield Utility Board: $700 rebate or no-interest loan up to $2,500

Emerald People's Utility District: $600 rebate and no-interest loan up to $4,000

Blachly-Lane Electric: Two interest loan options, up to $3,000 or up to $5,000; possible rebates in 2002

Lane Electric Cooperative: $100 rebate and 2 percent loan

More information on solar: Contact the Oregon Office of Energy at [phone] or send e-mail to [e-mail]. The Web site is www.energy.state.or.us

CAPTION(S):

Lee Boutell and his wife, Margaret, took advantage of a state tax break and a rebate from EWEB to install a solar hot water heater on their Eugene home.