Greentech Media

The first time California passed a bill supporting solar water heating, the result was nothing short of disaster.

A lack of standards or criteria led to scandals that the industry has yet to live down. Customers got defective or improperly installed systems that never saved them any money, while tax credits lined installers' pockets, said David Kopans, director of regulatory affairs at Fat Spaniel, an energy-management company with trials in solar-thermal.

"There were some horror stories of cases where nothing was really installed. There was something on the roof, but it wasn't connected," he said. "Generally in the United States, there was a bad taste in everyone's mouth after that situation."

Now, the Golden State is trying again.

The state Legislature last week passed a bill that will create solar water-heating incentives for 10 years in the state, if it's signed by Gov. Arnold Schwarzenegger by Oct. 14. The bill is intended to encourage the installation of 200,000 solar water-heating systems to reduce natural-gas consumption.

Huffman said he is "very hopeful" Gov. Schwarzenegger will sign the bill, adding that his office worked with the governor's staff early on, making changes that staff members asked for.

The bill is one sign that solar water heating is starting to regain respect after long being relegated to "second-cousin status," said Mike Taylor, technical services manager for the Solar Electric Power Association.

And it's not the only sign.

Hawaii, Florida, Massachusetts, Oregon and Washington have solar water-heating programs, some through local agencies or utilities. And in May, Conergy subsidiary SunTechnics Energy Systems made headlines when it bought Aztec Solar, a solar water heating company. The news that Conergy, a large photovoltaic manufacturer and installer, was expanding into the market gave solar water heating a boost.

Popular Abroad

Of course, solar water heating hasn't had a bad reputation everywhere. While it hasn't done well in the United States, China, Spain, Israel and other countries have embraced the technology.

According to a report by Environment California, an environmental advocacy group, 46 million houses worldwide had solar hot-water systems by the end of 2005, with a combined capacity of about 88 thermal gigawatts. Israel, Cyprus, Greece, Austria, Turkey, and Japan have the highest per-capita usage, while Chinese installations make up almost 80 percent of new systems, according to the Worldwatch Institute, a think tank focused on environmental and social issues.

One appeal of solar water heating is that it's simpler to heat liquids with the sun than to make electricity, said Robert Wilder, CEO of WilderShares, which manages three energy indices. Solar water-heating systems also are much cheaper than solar-electric systems, he said.

"It's just a no-brainer," he said. "It's such as easy way to capture solar power."

But while the U.S. has lagged behind the rest of the world in solar water heating, industry insiders said California's bill could help change that.

"California is trying to put a quarter of a billion dollars on the table," Kopans said. "That should get people's attention. …Seldom does a government put a quarter of a billion dollars on the table and nobody tries to pick it up."

According to a fact sheet for the bill, California relies heavily on mostly imported natural gas for water heating and the state's demand is expected to continue to rise.