Solar Water Heating in Commercial Buildings Poised for 20% Yearly Growth, Study Says

by | Apr 5, 2011

Businesses are increasingly installing solar water heating to help them meet environmental goals and hedge against rising energy prices, according to a study.

The report by research and consulting firm AltaTerra Research says that the U.S. solar water heating market is growing at about 20 percent per year in the commercial sector, a significant acceleration from long-term trends. Power purchase agreements are catching on for commercial solar thermal installations, which bodes well for the development of a robust market, AltaTerra said.

The study said that solar heating installations lower energy expenditures for most customers. Solar water heating captures about four times as much energy as solar photovoltaic systems, with much less expensive equipment, AltaTerra said. This results in a lower long-term energy cost before any cash incentives are taken into account.

Compared with electric water heating, solar heating is often a “hands-down winner”, the study said. But most companies will need tax credits and other incentives to make solar heating competitive with natural gas, particularly for retrofits.

The advisability of solar water heating in a given facility depends on several factors, the study said, including the amount of hot water used and the amount of energy expended on water compared with other uses. The food service, health care, hospitality and multi-unit housing industries all tend to use large amounts of hot water.

Hotels are showing some of the most rapid take-up of solar water heating technology. And although offices generally use little hot water, solar water heating can be advantageous at business parks and office campuses that include services such as dining and athletic facilities, the study said.

“The U.S. commercial market is benefiting from new incentives programs and an increase in corporate and commercial customers seeking to meet resource efficiency goals and hedge against rising energy prices,” said the report’s lead author, Eric Paul.

The report is based on interviews, public sources, a proprietary database of installations, and profiles of more than 250 customer-sited projects.

Last year a report released by the Solar Energy Industries Association (SEIA) and GTM Research projected that the solar water heating segment would achieve its sixth consecutive year of growth in 2010, growing 16 percent with approximately 3 million square feet (mmsf) of installed solar thermal collectors by year-end compared to about 2.6 mmsf in 2009.

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