Frequently asked questions about SRP's residential solar water heating program

SRP pays the incentive in exchange for the renewable energy credits generated by the solar water heater. These renewable energy credits are used to ensure that SRP is complying with its sustainable resource goals. In addition, SRP offers solar incentives to encourage investment in solar energy while defraying the cost of purchasing and installing a solar water heater.

The placement of the solar collector panels will affect the energy savings that a solar water heater will realize. The OG-300 rating used to calculate the incentive is based on the panels being in an optimal location with sufficient tilt and facing due south. SRP allows for different panel placement configurations, but reduces the incentive to account for the anticipated reduced energy savings. SRP will not provide an incentive for systems with panels that face north.

Your contractor should reduce the cost of your system by the amount of the SRP incentive. Once your application has successfully completed the program requirements and process, the incentive check will be sent to your contractor on your behalf.

Since you are still getting the benefit of the SRP incentive by lowering the price you pay for the system, an IRS W-9 form must still be submitted. The purpose of this form is to issue an IRS 1099-MISC form at the end of the year for tax purposes.

SRP pays the incentive in exchange for the renewable energy credits generated by the solar water heater. The Bill of Sale represents the formal document that provides SRP with ownership of the environmental attributes and environmental attribute reporting rights associated with those renewable energy credits.

Program eligibility

Yes, you must be an active SRP customer at the address at which the solar water heater is to be installed.

No. You must install a new and complete solar water heater to qualify for the program.

To qualify for the incentive, the solar water heater must be OG-300 certified by a third-party entity approved by SRP. To view a list of OG-300 certified systems, please visit the Solar Rating & Certification Corporation (SRCC) or the International Association of Plumbing and Mechanical Officials websites. SRP does not provide incentives to direct forced systems (also known as open-loop systems) that utilize a flush-type freeze protection valve, as these systems do not have adequate freeze protection.

No, SRP does not provide incentives for residential swimming pools.

Benefits

Since water heating can account for approximately 15% of your annual energy use, you can take control of your energy bill by harnessing the sun to reduce the amount of electricity required to heat your water. A solar water heater can offset up to 80% of your annual water heating costs. Also, you will be helping to protect the environment by using clean renewable energy to heat the water for your home.

Arizona currently offers a one-time tax credit equivalent to 25% of the system cost, capped at $1,000 per residence, regardless of the number of energy devices installed. The federal tax credit is 30% of the cost. These credits are obtained through your annual tax process. Tax credits are subject to change. SRP recommends that you contact your tax professional with any further questions on these tax credits and whether you are eligible to take advantage of them.

System design and installation

Prior to installing a solar water heater, please consider the following:

  • Contractor selection. As with any home improvement project, its ultimate success is dependent on choosing the right contractor. Get advice to help you make an educated choice.
  • System Type. There are different types of systems and costs can vary widely among contractors. You should research the system types available so that you ultimately select the best type for your home.
  • Maintenance. Solar water heaters will require ongoing maintenance, so know the system's recommended maintenance schedule and take these costs into consideration when selecting your solar water heater.
  • Panel location. It is important that the panels receive the greatest amount of sunlight. As a result, you should consider factors that will impact the sun's ability to shine on the panels including shading from obstructions (such as trees), the tilt angle of the panels, and the direction the panels are facing (southern exposure is best). The location of the panels can impact your eligible incentive amount from SRP.
  • Mounting. The method of mounting for some systems could impact roof warranties and home insurance policies.
  • Homeowner Association (HOA) rules. Homeowner association rules may affect system selection and mounting, so review your plans with your association before installing a solar water heater.

First, you need to consider how much hot water you use typically in your household. A solar contractor can help you select a system that will meet your needs and our program requirements.

SRP relies on the OG-300 rating to determine how much energy savings can be realized by a solar water heater. For example, a water heater that has an OG-300 rating of 2,600 kilowatt-hours would equate to 2,600 kilowatt-hours of energy savings per year. System output will ultimately vary depending on the type of components installed and the system's orientation in relation to the sun.

Your solar panel will not generate hot water when there is no sunlight. So, you must have a water heater backup system that is powered by electricity to ensure that you have hot water when your solar water heater is not working. If you do not have a backup system, you will not have hot water if your solar water heater is not operating.

The lifetime of your solar water heater is dependent on the type of device selected, the quality of the installation, and compliance with maintenance requirements. Your contractor should provide you with a comprehensive maintenance plan based on the manufacturer's recommendations for your system type.

At a minimum, your solar water heater must have the following warranties to qualify for SRP's solar incentive program:

  • Collectors. Solar collectors must have a 10-year warranty provided by the equipment manufacturer that protects against defect or component breakdown.
  • Storage Tank. The storage tank must have a 5-year warranty provided by the equipment manufacturer that protects against defect or component breakdown.
  • Installation. The installer must provide a 2-year warranty that protects against defects in the overall installation of the solar water heater. In addition, the installer must provide a 2-year warranty that covers roof penetration leaks. These installation warranties also must provide for no-cost repair or replacement of affected components, including any associated labor that is not otherwise provided by the manufacturer, during the warranty period.

SRP uses the ratings provided by the independent, third-party companies who evaluate each system based on the region where they will be located. The OG-300 rating evaluates the entire system from panels to tank. If a solar water heater is OG-300 rated, it means the entire system has been certified to meet applicable requirements.

In February 2003, the Arizona Court of Appeals ruled that a homeowner's prohibition related to the installation of a solar energy system violated the public policy of Arizona as expressed in Arizona Revised Statute Section 33-439. Please refer to this statute to learn more about the state law regarding this issue.

Contractor selection

A properly licensed contractor must install the solar water heater to ensure it complies with all applicable building codes, SRP program requirements and OG-300 standards. SRP does not install solar water heaters, nor do we promote or partner with individual contractors. The following solar interest groups do provide lists of solar water heater contractors that you can contact for more information:

SRP acknowledges that there are two types of contractors that will work on your project - dealers and installers. In some instances, this may be the same company. Both the dealer and the installer must have the appropriate license from the Arizona Registrar of Contractors as outlined below.

The dealer represents the company that has the contract with you for the purchase of the solar water heater. Dealers must have one of the following license types: B-, C-37, KB-1, KB-2, C61, K-77, or K-78. If the contractor can show that the scope of work associated with their license application includes a solar water heating component, the following licenses also would be accepted: C-05, C-37R, KO-, and K-05.

The installer represents the company that is actually installing the solar water heater on your home. Installers must have one of the following license types: C-37, K-77, or K-78. If the contractor can show that the scope of work associated with their license application includes a solar water heater installation component, the following licenses also would be accepted: C-05, C-37R, and K-05.

Please visit the Arizona Registrar of Contractors' website or call them toll free at (888) 271-9286 to verify the validity of the contractor's license.

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