The installation of a solar hot water heater could cost $6,000, but Valley Electric customers could realize annual energy savings of $2,742 in addition to a $3,000 rebate, a VEA study shows.

Cliburn and Associates was commissioned to study 10 Pahrump homes where solar hot water heaters were installed in a pilot project. Results were made available at the recent VEA Energy Symposium at the Pahrump Nugget Oct. 3-4.

The study concludes individual installation of solar hot water heaters would be beneficial, resulting in savings of 11.1 percent on the annual electric bill. Authors admit savings would be greatest where consumption of hot water exceeds 60 gallons per day, which excludes many customers.

The installation of the solar hot water heaters, however, would cost VEA $4,345 in lost energy sales and rebates, after the co-op subtracts peak power purchases amounting to $2,296 per customer.

Three business models studied indicate a carefully designed program could support the costs and still deliver economic value to a utility. Utilitlies that target the right customers had the most success, the report stated.

Commercial businesses and institutions, as well as large families that use a lot of hot water would be strong candidates, the study said. The 10 homes in the pilot program used on average less than 15 gallons to more than 60 gallons per day.

Authors concluded the 10 test houses in the VEA pilot program could have paid back the cost of the solar hot water heater in as quickly as 6.5 years in some homes.

Utilities like Valley Electric can benefit from renewable energy credits in the solar market, which haven't been determined yet, the study stated. The cost of avoiding energy can also be considerable, it added, as VEA relies heavily on natural gas.

The peak Valley Electric load in 2006 was 22.5 megawatts. The most costly power supplies are purchased in peak periods, the study noted. A megawatt is roughly considered enough to power 200 homes. If 70 percent of VEA customers used solar hot water heaters, the cooperative could reduce consumption by six to nine megawatts in peak periods, the study said.

"A strong resource plan might address construction, appliances and equipment in all sectors and various renewables including solar water heating (SWH), solar thermal heatring and cooling and solar electric (PV) generation among other strategies," the report stated.

The imposition of impact fees by Valley Electric "sends the right price signals to homebuilders" to limit loads per home to 200 amps, the study noted.

Authors suggest Pahrump is vulnerable with no natural gas and a reliance on electricity for air-conditioning and heating. The abundant solar resources would lend support to using solar hot water heaters, they said. It could jump-start a solar industry in Pahrump as well.

In Austria, 15 percent of single-family homes have solar water heaters, in a climate more similar to Anchorage, Alaska, the authors said.

Abundant solar energy in Pahrump means customers could get 80 percent or more of their hot water heated by the sun, the study states.

"Because of the nearly ideal conditions for solar at VEA, a broader range of technical options would provide the full benefit of that high solar fraction. One relevant observation is that VEA potentially could market to 60 to 65 percent of homes and 60 to 70 percent of commercial buildings for SWH."

Space consideration would limit installation in mobile homes, authors said.

Valley Electric received 80 participants who wanted to participate in the pilot program, but there were only 10 slots. Interest is high in Pahrump because of the active program in nearby California, local newspaper articles about solar energy and projects like the 60-megawatt Nevada Solar One facility near Boulder City, the authors said.

The VEA study included residential solar water heaters, Marathon storage water heaters, Marathon storage water heaters with timers and conventional water heaters. The solar water heaters saved the most, authors said.

Consultants said a Wisconsin program helped develop the solar market there by holding workshops for contractors, offering quality assurance programs, giving extended warranties, collaborating with economic development partners to grow solar businesses and providing technical support including reduced-cost site assessments to screen customers for contractors.

Contractors receiving utility incentives should adhere to guidelines for things like freeze protection and overheating protection, the study recommends.