OLR Research Report


September 10, 2009

 

2009-R-0327

CLEAN ENERGY FUND'S SOLAR WATER HEATING PROGRAM

By: Kevin E. McCarthy, Principal Analyst

You asked for a status report on the Connecticut Clean Energy Fund's (CCEF) solar water heating program.

CCEF expects to launch the program shortly, but is not yet taking grant applications. It is awaiting guidance on several issues from the federal Department of Energy, which is funding the program under the American Recovery and Reinvestment Act (ARRA). The issues are the act's requirements regarding wage rates for contractors participating in the program and data reporting, record retention, and environmental reporting requirements.

ARRA is expected to provide $ 20 million in funding for CCEF programs over the next three years, through the State Energy Program administered by the Office of Policy and Management (OPM). OPM has directed CCEF to allocate $ 4 million of the federal funds, which OPM has already received, to the solar water heating program.

CCEF expects to provide incentives for solar water heating for approximately 600 residential installations ($ 1. 8 million in incentives) and about 120 non-residential projects ($ 1. 8 million in incentives). The remaining $ 400,000 in the program allocation will be used for program administration.

The incentives will be provided as grants to install solar water heating systems on existing and new buildings. All types of buildings are eligible, but the building's roof must have at least 15 years of useful life remaining. Incentive amounts will be based on the system's estimated annual heat output, with the requirement that it be able to meet 50% to 80% of the site's hot water demand on an annual basis. (The 80% cap is meant to prevent funding systems that have to dump excess hot water during the summer. ) Residential and for-profit commercial projects will receive $ 200 per million British thermal units (MMBtu) of annual system output. Not-for-profit and governmental projects will receive $ 330 per MMBtu of annual system output. The maximum incentive awarded per residential installation ranges from $ 2,400 for a two-person household to $ 4,800 for a household with six or more members. The maximum incentive awarded to for-profit nonresidential projects is $ 50,000 and the maximum incentive for not-for-profit projects is $ 82,500. CCEF plans to evaluate the program over the next two years to optimize the incentive structure while meeting the installation objectives.

The program website is www. ctcleanenergy. com/YourHome/SolarThermal/tabid/71/Default. aspx. The website includes an application form for contractors interested in the program.

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