How Solar Water Heating Works

Here is Rick installing my one panel solar water heating system 2 years ago. The small panel on the left produces the power to drive the system.

Glycol is the exchange medium that is pumped from the panel on the roof to the heat exchanger in my basement.

The small cube on the right is the heat exchanger. Heated Glycol comes down from the roof in insulated pipes and heats via an exchange water from our well that is then stored in the water heater on the right. The main water heater draws on this hot/warm source. On a good summer day the water is so hot from the solar heater that no extra power is required. On a modest day it means that the water heater draws warm water rather than cold water fromt he well.

When we first put this in – we and the ‘guys’ knew much less. We connected the solar source directly to our oil furnace. But the furnace would constantly be heating its own water jacket without drawing on the solar heated source.

Now the new norm is to isolate the furnace completely.

When you do this be careful about how the systems connect so that you maximize the value of the solar heat.

Oh and my economics? I used to use an entire tank of oil from May to September. About $1,000 now. My investment in a one panel system is just over $4,000. I am expecting an ROI of somewhere between 12% – 20% depending on the weather for there will be some electrical costs.

Solar Water Heating for Apartment Buildings – The Economics for Landlords

This is a 3 unit apartment building in Charlottetown, PEI. There are 11,000 apartments on PEI out of a total of 54,000 households. I have been wondering what can landlords do to reduce their exposure to oil costs.

I called my friend Wes, the owner to find out how he had made the business case for adding solar water heating to his building.

Wes sees the math like this:

Each unit uses about 1,750 litres of oil a year. At current prices this is about $2,000 a unit. About 25% of the cost/use ($500) is in water heating. The potential for Solar in normal years on PEI is about 60% or $300 a unit. So Wes’s target is about $900 a year in savings.

The cost of the installation was $5,000. So his pay back 5.6 years. His after tax ROI is 18%!

I am finding that in this time of low interest rates and uncertainty about the safety of the “market” that investing in my own energy savings is a good use of my capital. Even in a poor summer like this one with much less sunshine Wes might at worst get 7% or 8% – still way better than in the market. Over time of course the returns get very attractive – for as oil prices rise, the return gets better.

This is only a small operation. I wonder what the potential is for the larger operators on PEI? With 11,000 units out there – there is lots to play for.