Archive for the ‘FAQ’ Category

Here is a short video that shows what to expect during a solar hot water installation.

The video shows a split system, where the tank is on the ground.

The installation took about 4 hours, but I’ve cut the video down into 90 seconds. It still shows the most important aspects:

• Taking the old tank away
• Placing the new tank
• Connecting the tank to the plumbing in the house
• Running the pipes up to the roof
• Installing the pump
• Mounting the solar panels on the roof
• Running the plumbing inside the roof
• Cleaning up

The only thing it does not show is how the electrician connected the tank. I was up on the roof at that time and missed it. That’s how quick he was…

One of our clients doubted that he could get the solar hot water rebate for his investment property. He took the trouble to call the Department of the Environment, Water, Heritage and the Arts. The answer: “No, only the tenant can apply.”

When I heard that, I called the Department as well and sure enough got the same answer.

However, I had a FAQ document produced by the Department. Here is what it says:

Can I get the rebate for a system I install on my investment property?

Yes. The system for which a rebate is being claimed must be installed at a principal place of residence. There is no requirement that this is the applicant’s principal place of residence. An owner may apply for a rebate for more than one property.

The sharing of costs other than the rebate between the landlord and the tenant is a matter for you to
negotiate. Regardless of whether you are an owner or a tenant, all other eligibility requirements must be met.

Vita, the lady I talked to, had to ask her superiors. She called back after half an hour, confirming that in fact, yes, a landlord can apply for and receive the solar hot water rebate.

So if you have any problems, claiming the rebate, do not give up, tell the Department to check its policy more carefully.

No upfront cost always means financing in some way. That is true for an interest-free deal, for a bank loan or using a credit card.

However, as a solar hot water heater reduces your energy bills, the sun can effectively pay for the system and the interest. The average household in Australia spends $300 to $700 per year on hot water. Most solar hot water heaters cost between $1,800 and $2,500 (after all possible rebates).

Option 1: Pay Solar Hot Water Heater Outright

This is always the cheapest option.

As you can see in the graph, you start out in the negative. Then there is a steady improvement of your cash position until you are far better off than without a solar hot water heater.

The sharp rise represents the $1,600 federal rebate.

If you currently have a line of credit or a loan with a good interest rate, you might want to look into a redraw. Check for the best interest and cheapest fees.

Option 2: Finance with a Credit Card or Loan

Financing with a credit card or loan, you may be able to better manage your cash flow.

Apart from the first two months (before you receive the federal rebate), you actually have more cash than without financing the system. The overall return is lower than paying outright. But it is still substantial.

The Choice

If you can, pay upfront. It will always be the cheaper option. However if you do not have the cash to cover the initial cost, Option 2 might be beneficial. When money becomes available (e.g. from tax rebates) it is good to use it to repay the loan to minimise your costs and increase year benefits.

Assumptions

Please note that this is not financial advice. Speak to your financial adviser if you are unsure which approach is appropriate for your situation. For the graphs, we have assumed:

• purchase price of $3,000 (before getting the $1,600 federal rebate)
• minimum repayments of 2.5% of loan or $40, whatever is higher
• fees of $49 per year and interest rate of 12.8%
• not using the $1,600 federal rebate for repayments
• electricity savings of $40 per month (or $480 per year)

Financing the system in this way would cost approximately $1,770. By using the $1,600 federal rebate for repayments when it comes in, costs can be reduced to $880. To further reduce the total costs, just repay more than the minimum monthly repayments. If you can afford slightly higher payments, the Bendigo Bank Green Loan might also be useful for you.

The main difference in solar hot water heating systems is where the tank is located.

On-roof Solar Hot Water Heating Systems

With on-roof or roof mounted systems, the tank is directly above the collector panels.

Hot water is lighter than cold water, so it naturally flows up into the tank (or rather gets pushed up by the colder water sinking down).

Water flow happens through the mains pressure. As hot water is taken out (from the top), new cold water flows in and gets heated up in the panels.

Using these natural physical laws makes it reliable and cheap to run.

The disadvantages: You might not like the look of the tank on the roof.

There are also some situations were the hot water would need to travel too long before reaching your shower. In such cases, a lot of water is  wasted and we recommend the split systems.

Split Solar Hot Water Heating Systems

A split system only has the collector panels on the roof. The tank is located where your current tank is.

A small electrical pump is necessary to pump the hot water down from the panels into the tank. However, the energy for the pump is offset in reduced heat losses, as the tank is more protected.

If the ideal location of the collector panels is far away from the location of the old hot water tank, a split system will result in better water usage. The reason is that the hot water is stored closer to where it is used. That means you do not have to wait for the hot water to reach your shower.

An added advantage is the in-built frost support. If the temperature falls below 5 degrees the pump automatically starts circulating the water. That brings warmer water back up to the panels so that the chances of it freezing are reduced.

The disadvantages, slightly more expensive to buy and install.

How to Decide?

When you go through the quoting process for your solar hot water heating systems, you get a choice between the two kinds of systems (where your situation makes that possible). To make the right decision, consider:

• The distance of the collector panels to the old tank (the further away, the more it makes sense to get a split system, e.g. two-story house)
• Your aesthetic preferences
• Your finances (how quickly you want to be paid through your investment)
• Future value of house. Whoever purchases the house might prefer a split system.

Some of the answers you give might rule out an on-roof system anyway, then you just need to decide on tank size.

One of the issues that came up in the interviews at World Environment Day was the question of the reliability of solar water heating.

Some people have experienced problems with earlier systems that did not have enough capacity to handle a few days of grey skies.

There are three components to that issue

1) Tank Size

All tanks have great insulation, so that the heat-loss over a few days is minimised. The more important factor is how much hot water is used. According to the Sustainable Energy Development Office of WA an average person uses 50 Litre of hot water per day.

The water in the tank heats up to 90 degrees in summer, but gets mixed with cold water when it comes out (to 50 degrees, so that no one gets burnt). That means a 300 Litre tank has a capacity of close to 550 Litre of 50 degree water. So for a family of four, it can last close to 3 days without any sunshine.

So the bigger the tank, the more hot water you bank.

2) Solar Water Heating Collectors

Efficiency of collectors depends on a lot of factors. We check them all on this website and then again before installation to make sure you get the best efficiency out of your system.

We use the highly efficient technology in all our split solar hot water systems that can face anywhere from North-East to North-West to work well. You need to get an absolute minimum of 4 hours of sunlight on the panels to successfully heat your tank.

3) The Booster

The last element in solar water heating is the booster. It has a thermostat that is set to 60 degrees. So whenever the water temperature falls below 60 degrees, it automatically heats it up.

Conclusion

Is solar hot water heating reliable? Yes absolutely. The technology is well matured since the 1950’s. It is highly efficient (up to 80% of the sun’s energy is turned into hot water) and it has a reliable backup with the booster.