Commercial solar water heating system

Is Solar Water Heating Right for Your Business?

By Jessica Tellez

Businesses across California are embracing renewable energy, not only because it is good for the environment but because it also enhances their image and reduces their energy bills. One form of renewable energy that is gaining popularity among California businesses is harnessing solar power to heat the water in their buildings.

Commercial solar water heating systems supplement conventional water heaters or boilers and reduce the amount of non-renewable energy a business uses to heat water. Installing a commercial solar water heater can reduce a business's cost to heat water by 50% to 80%, and payback can be as little as a few years.1 If installed properly, solar water heaters require little maintenance and last up to 25 years.

Property-specific factors to consider
Virtually any California business that uses a lot of hot water in its operations can save money and energy by installing a commercial solar water heating system. Still, there are several things businesses should take into account when evaluating a commercial or multi-family property for solar water heating:

  • Buildings with a southern or southwestern exposure are the optimum candidates for a solar water heating system.
  • The building needs to have adequate roof space exposed to the sun and space for a separate solar storage tank near the existing water heater or boiler. If the roof doesn't have enough space or is the wrong pitch, the system can be installed on the ground as long as the location receives sunlight.

Elements of solar water heaters
Solar water heating systems are composed of three main elements: the solar collector, insulated piping and a hot water storage tank. The solar collector gathers heat from the sun and transfers it to potable water. This heated water flows out of the collector through the piping into a hot water storage tank.

There are two types of solar water heating systems and the contractor will determine the best system to install based on the conditions at the property.

In either case, the solar-heated water in the storage tank pre-feeds the conventional water heating system. Because the preheated water is fed into the boiler or water heater, it will not run or run for less time than if there were no solar hot water system. This reduces the amount of conventional energy that is needed to heat your water and increases your energy and cost efficiency.

Working with a contractor
Once a business has determined that a commercial solar water heating system is right for its facility, the next step is to find a licensed contractor, who will assess the business's hot water needs and determine the right system before performing the installation.

The California Solar Initiative (CSI) Thermal Program, the statewide solar rebate for customers of the state's investor-owned utilities (IOUs), maintains a Contractor Database that allows businesses to search for contractors by ZIP code. The database also shows contractors who have installed systems in their area and allows businesses to filter results by the average cost to learn how much other customers have paid.

It is recommended that businesses get at least three estimates or bids. There is no obligation and it allows businesses to compare costs, systems and savings from different contractors. Also, verify that the contractor has an active A, B, C-10 or C-46 license by checking the Contractors State License Board (CSLB) website. Be sure to ask about experience and check references before making a final selection. Make sure the details of the job are in writing before signing a contract.

After designing a system to meet the building's needs, the contractor will arrange for any necessary permits and site inspections to complete the installation of the solar water heating system. Business owners or managers should talk to their contractor before installation about the timeline for completion. Installation generally takes a few days to a few weeks, depending on the unique conditions of the system. Note that the city or county will need to do a final inspection and sign off on the permit.

Rebates available
The CSI Thermal Program provides incentives of up to $800,000* to eligible business and multi-family building customers of California's IOUs, including Pacific Gas and Electric Company (PG&E), that install a commercial solar water heating system. The incentive amount is based on the size and performance of the system—how much natural gas is saved.** The more water the business heats with the sun, the bigger the rebate.

The contractor will determine if the business qualifies for a rebate and the rebate amount. The contractor also generally handles the entire rebate application process, including submitting all necessary paperwork. Businesses should talk with their contractor about deducting the rebate from the upfront costs to offer immediate savings.

To learn more about solar water heating and working with a contractor, download PG&E's free eBook, "How to Make Solar Water Heating Affordable for Your Business."

*Final rebate amount will be based on the estimated savings as determined by the contractor.
**Must currently heat water with a natural gas water heater or boiler. PG&E customers who heat their water with electricity or propane are not eligible.


  1. Pacific Gas and Electric Company

Is a commercial solar water heating system right for your business?
  • SMB Blog Author
    Jessica Tellez
    Senior Marketing Strategist at PG&E, is a recognized leader in solutions marketing for renewables. Jessica uses her proven and practical expertise to bring renewable education to residential and business customers. In this vital role, she develops and oversees highly successful initiatives that result in the adoption of more renewable projects throughout PG&E's territory.

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