A Eugene businessman says he’s gearing up for production of low-cost solar water heaters to be placed on the roofs of local homes by Dec. 31.
After about four years of fits and starts, energy entrepreneur Peter Greenberg is ready to go with his $5,000 SunFlame residential solar water heater.
This is a diversification for Greenberg, who expects $10 million in sales this year from his other business ventures, which include the sale of energy-efficient lighting for factories and government buildings globally and photovoltaic arrays on schoolhouse roofs in Oregon.
But Greenberg understands the boom and bust in an industry dependent on the fluctuating whims — and incentives — of government. Decades ago, he watched his business and a whole renewables industry crumble after an abrupt change of federal policy.
This time, he’s pinning his hopes on a federal tax credit that’s meant to encourage residential use of solar energy — including to heat water — with the knowledge that the credit is scheduled to expire in 2016 and that Congress may not renew it.
But that’s how it is in the renewable energy business.
“Energy and politics are very closely related,” he said.
If Greenberg gets his solar water heating venture off the ground at a plant he rents at 410 Chambers St., it will be another sign of the stirring of durable goods manufacturing in Lane County, which was hit hard by the collapse of the local recreational vehicle industry in 2008.
Greenberg plans to build the solar water heaters at Pacific Metal Fab, a neighbor of his Energy Wise Group in west Eugene.
The solar industry has, for manufacturers, alternately been a great-and-poor source of business. The fluctuations are so pronounced that some business writers have dubbed it the “solarcoaster.”
Greenberg got into the solar business in the early 1980s when he quit his firefighter post — after nine years on the job — to build and install solar water heaters.
It was the heyday for solar hot water, because under President Jimmy Carter, Congress passed generous solar power tax breaks. The president even installed 32 solar panels on the White House to heat water for the kitchen.
In Oregon, solar hot water installations rose from 106 systems in 1978 to 2,588 in 1981 — and sales continued to grow, at the rate of about 1,000 new units per year, for the following five years, according to the state Department of Energy.
During that period, Greenberg’s SunFlame company made and installed 1,600 hot water systems.
But when President Ronald Reagan — who was no fan of subsidized solar — took office, he presided over the extinction of the solar energy incentive. He also took Carter’s array of solar panels off the White House.
The industry itself had some problems in its infancy, problems that continued to haunt it, said Glenn Montgomery, executive director of the Oregon Solar Energy Industries Association.
“Solar thermal systems were being slapped on roofs by shoddy installers and the systems themselves weren’t done well,” he said, “and people still remember that.”
In those early days, there were no industry standards, said Rob Del Mar, solar expert for the Energy Trust of Oregon.
In Oregon, installations fell from 1,601 in 1985 to 48 in 1987, and have not climbed out of the hundreds since then. With rare exceptions, such as Mr. Sun Solar in Portland, solar hot water manufacturing in Oregon ground to a halt. Greenberg’s business evaporated.
Today Greenberg, who is 56, muses that, had he stayed on the firefighting job, he could now be retired.
In the early 2000s, when solar energy became popular again — and President George W. Bush installed a system to heat the White House pool — Congress and a number of states, including Oregon, again gave homeowners tax credits for installing solar energy systems.
The federal program gives homeowners a tax credit for one third of the cost of installing either a photovoltaic electricity generating system or solar hot water system, up to a limit of $6,000.
But the state Legislature went another route, which has dampened the use of solar-heated water, compared with photovoltaics.
The solar hot water systems qualify for the conservation tax credit, like insulation does, which is up to $1,500. But photovoltaics can get a tax credit of up to $6,000.
“The financial incentives for PV got so generous that solar hot water heating couldn’t compete,” said Rob Del Mar, solar energy expert for the Energy Trust of Oregon. In Oregon, only 207 systems were installed last year.
The odd reality is, kilowatt for kilowatt, solar hot water is far more efficient, far less expensive (without the incentives) and takes up about a quarter of the space on a homeowner’s roof, Del Mar and others said.
While the United States has been preoccupied with photovoltaics, the rest of the world has been equipping itself with solar hot water. China is at the head of the pack; It accounts for 70 to 80 percent of the global solar hot water market, according to the Worldwatch Institute.
Heaters cover the roofs in cities in China, Greenberg said.
“I went to one street in one city and there was five different solar water heater factories that have more capacity than all the solar companies in the United States,” he said. “They’re way ahead of us in solar hot water heaters.”
In the meantime, Apricus from Australia, Schüco from Germany and Velux from Denmark are claiming shares of the U.S. solar hot water market, including in Eugene. So are California firms Heliodyne and SunEarth.
All the new models undergo rigorous testing under the auspices of the Solar Ratings Certification Corp., which addresses performance, safety, design and maintenance standards.
With certified reliability and the buzz created by the international example, the U.S. solar water heater industry is poised for growth, Del Mar said.
“We’re seeing some innovations — including (Greenberg’s) system — that should reduce the cost,” he said. “Even without the incentives, it will get back to the point where it’s cost competitive with PV systems.”
After Greenberg left the solar water heating industry the first time, he started up Energy Wise Lighting, which has since installed 70,000 fixtures (which save their owners 110 kilowatt hours of electricity a year), he said. Under contract with the U.S. State Department, he outfitted overseas missions at Singapore, Mongolia, Vietnam, Colombia, Cuba and the Republic of Georgia. He changed fixtures in government offices, factories, prisons and schools in the United States.
Greenberg got into photovoltaics before returning to solar hot water.
In recent years, though, the demand for lighting has tapered off, so Greenberg and business partner Lynn Post threw themselves into the third-party solar array business in which an entrepreneur essentially rents rooftops from schools or nonprofit agencies for solar arrays, collects the proceeds from energy production over a 15 year period — and after, turns the system over to the school or agency for their continued benefit. Greenberg installed dozens of systems on schools in Albany, Mount Angel, Turner, Newberg and Salem.
“We kind of went over the deep end with photovoltaics,” Greenberg said. “In two years, we’ve become the third- or fourth-biggest owner of solar in the state.”
In May, Greenberg finally got the seal approval from the Solar Ratings Certification Corp. for his new solar water heater design.
Greenberg uses an unusual combination of passive heating and circulation (called thermosiphon) and evacuated-pipe collectors. A tank of water sits on the top. Thirty-five tubes — 6 feet long, 2½ inches in diameter — are attached underneath. Gravity circulates the water through heating and cooling through the home’s plumbing. Unlike most U.S. systems, it needs no pump.
“There’s no moving parts. There’s nothing to change. Nothing to wear out,” Greenberg said. “There’s really very few passive thermosiphons (in the United States), but that’s the most common solar hot water system in the world.”
The evacuated tubes are double-walled, with a vacuum between the walls. The sun’s energy penetrates, but it can’t get out.
“Think about a thermos bottle,” Greenberg said. “It keeps it cold or keeps it hot.”
Another attribute: The evacuated tubes perform well in what the manufacturer calls “situations of consistently low sunshine.” Oregon, for example.
Greenberg has tucked the plumbing inside a premade module. The major assembly is done at the factory. He plans to lift the units onto customers’ houses with a crane. “You plop down the solar systems, you connect the fittings and you’re done. We’ve got it really pretty simple,” he said.
The units will come with a 15-year warranty, he said, but he said he’d expect them to last as long as three decades.
He’s betting that the federal government will extend its energy tax credits after the 2016 sunset and that the state Legislature will keep its residential energy tax credits beyond the 2018 sunset. But nothing is guaranteed, he said.
President Obama directed $90 billion in stimulus dollars into various energy investments. But green energy enthusiasts are disappointed because he has yet to restore a solar water heater and photovoltaics to the White House roof, although the White House says they’re in the works. Candidate Mitt Romney has said he’s in favor of solar but not tax breaks and subsidies for renewable energy.