WEB EXCLUSIVE

Thought to be the largest in the United States, VEA's domestic solar water-heating (DSWH) program aims to help residential members purchase and install roughly 5,000 solar water-heating systems by 2013. To make system ownership more affordable for residents, VEA is selling program participants bulk-purchased solar water-heating systems at cost and providing certified installers. Qualified members can also take advantage of an interest-free installment loan program.

The systems will help VEA members permanently reduce their utility bills while allowing VEA to avoid expensive electricity procurement and transmission and distribution upgrades. The program will also sharply reduce carbon and other emissions by curbing the amount of fossil fuel-generated electricity the VEA purchases. This program is being done without state or federal government assistance (or interference).

The initial idea for the program came about in 2006, when VEA's board of directors hired Tom Husted as chief executive officer. Tom immediately implemented a proactive style of management, improving the internal culture of VEA and employee relationships with co-op members. Tom instituted the use of "Ambassadors," volunteer members who perform various tasks. One of the Ambassador committees focused on energy, initially emphasizing conservation and efficiency. But after two years of work, the need for some residential renewable energy generation became apparent.

Based on the Ambassador committee's feedback, VEA decided, under the guidance of Husted, to take a proactive stance to implement the use of renewable energy, specifically solar water heating.

Domestic solar water heating is one of the most cost-effective and efficient uses of renewable energy for residences. Although modern solar water heating was invented in the United States, widespread adoption has not occurred here. Fraud and incompetence in a significant number of installations in the 1970s deterred many people. Today, there are still few industry standards in place to prevent the problems of the 1970s and to help designers, distributors, installers and owners understand system specifications and requirements.

Widespread adoption has also been prevented by large utilities, which favor centralized distribution and control - and the associated revenue. There has also been little use of economies of scale and vertical integration by system manufacturers, distributors, or installers to optimize costs.

Thus, owners of solar water-heating systems have mostly been people who are interested in living off the grid, or who have environmental concerns, or who are patient enough to take on a long-term investment. These groups do not represent a significant portion of the population, especially in the VEA territory.

While the benefits of a DSWH program to VEA members were obvious, the program would also benefit VEA as a business. VEA services portions of Clark, Esmeralda, and Nye counties in Nevada and Inyo and Mono counties in California. The co-op sells about 450,000 megawatt-hours annually, with a peak load of about 120 megawatts (MW). About 65 percent of the load is residential.

By implementing the DSWH program, VEA will acquire roughly 5 MW of power generation at a reasonable cost (about the same as a new fossil fuel plant, but without fuel and operating costs). Since a significant fraction of the generation will occur during peak usage times, VEA will avoid having to buy peak power, which costs much more than contracted power. Installing additional transmission and distribution lines can be delayed. Although renewable portfolio standards do not apply to co-ops at this time, VEA will already have a program in place in case that ever changes.

As a community service, the carbon and other emissions offset by the entire solar water-heating program are significant. The following table shows the estimated annual emissions avoidance once the roughly 5,000 systems are installed (for electricity generated for Nevada).

Pounds CO2 avoided 15,437,855
Pounds NOx avoided 34,581
Pounds CO avoided 2,470
Pounds SO2 avoided 41,168
Pounds Hg avoided 166,317
Pounds Pb avoided 149,190

In order to effectively and efficiently implement the program, a number of steps were required.

While there have been studies to demonstrate the effectiveness of DSWH, VEA launched a pilot program in 2007 to verify the requirements for DSWH within the VEA territory. The pilot program evaluated a test group of 30 water heaters - 10 DSWH units, 10 high-efficiency Marathon water heaters with timers and 10 high-efficiency Marathon water heaters without timers. The test group units were compared to a control group of 10 existing standard conventional water heaters.

This study was quite important because the demographics of VEA membership are significantly different from those used for other studies. Other studies typically assume a household of at least four persons, i.e., two working adults and two active children. The majority of VEA households are one or two adults, usually retired, who do not use as much hot water as in the typical study. Also, a large percentage of homes in the VEA territory are manufactured, not frame.

The pilot program and its resulting report from the Cooperative Research Network, completed in early 2008, not only showed the benefits of solar water heating, but also emphasized the need for properly sizing systems for actual usage. Proper sizing of systems is extremely important to avoid stagnation. Stagnation occurs when the systems overheat, which can either damage components or reduce the lifetime of the systems.

The report also determined that standard systems would be required for the DSWH program to obtain economies of scale. Evaluation of the demographics determined that four standard systems would be adequate to satisfy the vast majority of the members. Since many solar water-heating system components, like solar collectors, are only available in fixed sizes, extensive modeling of heat production and transfer was required to properly size the systems for the expected usage, physical requirements and solar insolation. Critical modeling components were pump capability and pipe characteristics.

Because of these critical needs, one of the major requirements for the program's selected manufacturer was to provide systems that were suitable for one or two older persons, as well as larger systems, and to have a storage tank/heat exchanger that would physically fit in a manufactured home. Rheem was willing to work with VEA, agreeing to provide small systems that were not in the company's existing product line. Part of the effort included developing economies of scale pricing and delivery structures, so system costs could be optimized, especially for the smaller systems, where fixed costs are a much larger fraction of the system total cost.

Once Rheem was selected and the four system sizes were established, the search for a general contractor and installer began. The installer had to be able to manage the workforce, which must have some experience with plumbing, be willing to be trained and certified and be able to install a large number of systems per week. The general contractor had to have the experience and ability to manage the installers as well as manage the inventory of necessary tools, materials and components used. In order to maximize local involvement, VEA chose a general contractor and installer in the Pahrump, Nev., area, where 90 percent of VEA's residential meters are located.

No renewable energy manufacturers provide freely available standards to cover all aspects of design, packaging, shipping, installation, operation, maintenance, quality and reliability of systems. So the general contractor, in conjunction with Great Basin College and Rheem, was tasked with generating and providing adequate training materials for the site analysts, the installers, the system inspectors and the homeowners.

Rheem had a training manual for the existing product line. Intensive work is ongoing to expand the manual for the new systems, the new components and the specific guidance for the VEA territory environment, which is very arid mid- and high-desert. Additional sections of the manual are being added to address the lack of industry available standards in various areas, such as homeowner education. Great Basin College has prepared additional material, based on the Rheem in-house training program and other sources, to properly educate installers on what, why and how to properly install a system. Installers are required to complete the Great Basin training course before being allowed to install VEA systems.

The VEA board of directors approved the business plan for the DSWH program in June of 2009, and the program was introduced to co-op membership at VEA's annual Energy Symposium in September 2009. The first installations occurred in September 2009 and were placed in VEA employees' homes to debug the process. Installations were occurring in co-op member homes by October 2009.

Ambassadors and the VEA have been working hard to market the program to co-op members, explaining the operation and benefits of DSWH to those who have expressed initial interest. Operation of a solar water-heating system requires more homeowner involvement than is typically exerted for a standard water heater. And financing the systems is a major economic issue.

In order to overcome the perceived initial cost barrier of solar water heating, VEA is providing an interest-free loan to members for the cost of the system. Based on modeling, the total of the annual loan payments will be less than the value of the avoided energy use, meaning, on an annual basis, the homeowner's electric bill will actually decrease, even including the loan payment. The duration of the loan and the payment size depend on the type of system installed. After the loan is paid off, the homeowners' electric bills will decrease even more, as they will have no more loan payments and will not have to pay ever-rising electricity prices to heat water.

The DSWH program has not gone off without a hitch. VEA has encountered a few obstacles:

- The Pahrump planning commission tried to impose unnecessary paperwork and taxation on the program. With widespread vocal support from the community and the county commissioners, the problem was resolved. No other obstacles were raised in any other portion of the VEA territory.

- Manufactured homes have no existing standards for mounting structures on the roof, especially those, such as solar collectors, that create tensile stress when the wind is blowing. Work is underway to verify the adequacy of the roofs. In the meantime, ground-mounted solar collectors will be used. Ground mounting costs slightly more and reduces efficiency, so the preferred mounting is on the roof.

- To generate renewable energy credits (RECs), a meter is normally required. Meters are quite expensive, running roughly 25 percent of the cost of a system, so the Nevada Public Utilities Commission agreed to use a standard rating (based on Solar Rating and Certification Corp. data) for each system for REC generation. The value of the RECs remains with VEA while the systems are being paid off. This revenue stream is important to ease the transition to the reduced revenue generation from the electricity no longer needed to heat the water.

- An initial proposal was to use Conservation Renewable Energy Bonds (CREBs) from the federal government to finance the program. However, the paperwork and restrictions were too burdensome to overcome. The Cooperative Finance Corporation, which already finances VEA business operations, provided the necessary funds instead, without the unreasonable paperwork and restrictions of the CREB program.

Since the program launch, more than 1,000 members have signed up. By January, 50 systems had been installed, and the program is on track to have 5,000 systems completed by late 2012 or early 2013. Another 1,000 to 3,000 systems could be installed by 2016.

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About the Author: David Sweetman ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) is retired. His previous positions include - vice president of quality and customer support at SST; vice president of quality and reliability at Catalyst; director of military programs and director of quality and reliability at Seeq.

David has a master's in business administration from Santa Clara University and a bachelor's degree in Physics (Phi Beta Kappa) from San Diego State University. He was an electronics technician and reactor operator in the U.S. Navy, serving primarily aboard the USS Kamehameha, SSBN-642.

David has been active in JEDEC, serving four years as chair of JC-13, the Joint Industry - Government Liaison Committee. He is also active in JC-14 and JC-10. David contributed to the IEEE standards and books for floating gate memories. He is the author of articles in a variety of publications on such topics as nonvolatile memory reliability, statistical process control, sampling, radiation, renewable energy and slide rules.