What are the Economics for a Commercial Solar Water Heating System? 

In Nevada, commercial thermal solar systems benefit from a number of incentives, both state and  federal. 

State:

• There is no local sales tax, and only a 2% state sales tax on solar water heating system equipment (set to expire 12/31/05; if the legislature does not reinstate this tax forgiveness, the full sales tax rate would apply).
• The value added by the installation of a solar water heating system shall not be taxed for property tax purposes.

Federal:

• A tax credit of 30% is available for the period of January 1, 2009 to December 31, 2016 on solar water heating systems.
• A 5-year accelerated depreciation schedule can be applied to the cost of the solar water heating system.

Table 1 represents the estimated final cost of a typical commercial solar water heating system installed in Nevada.

Table 2 represents the simple payback period given the expected output of the solar water heating system, on an annual basis, with a current cost of propane at $2.92 per gallon, and secondly the anticipated cost of propane escalating at 25% per year for the foreseeable future (has been averaging 25% per year over the 2000-2005 time frame here in Elko, Nevada). At an equivalent system output of 3285 gallons of propane, you would save approximately $800. per month on your propane usage.

Having said all this, your situation will be different. You may purchase different components that make up the solar water heating system that significantly changes the system cost, install the system in a different local, be from another state entirely, be surprised to find that propane rates have leveled off,  heat water with a different fuel, or any number of other variables. Each project should be evaluated on a case by case basis.

Please consider one last thing. Contrary to an economist's rather negative definition of the term "payback", a renewable energy advocate, much like yourself, sees the purchase of a system in a more positive light, more like an investment in the future. Upon start-up of the system you begin to see an immediate savings in your monthly expenses. After a few years the initial investment is paid off. Thereafter these savings go directly into your pocket. When your neighbor complains to you about their high utility bills, you of course just smile, and then tell them about your system. 

So, if you believe as we do, now is the time to take action. Incentive programs are bound to vaporize or not be available to you when you need them the most. Furthermore, we believe propane rates will follow crude oil prices, escalating at more than the 25% per year as they have over the 2005-2005 time frame here in Nevada.   

Whatever you decide, know that Silver State Renewables, Inc. will be there to help you reach your goals. Call or email us, with your questions, or for a quote.

Where Can I Find More Information?

For accurate, up-to-date information on the incentive programs mentioned above, please contact any of the following organizations:

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