ment responsibility rests totally with the installer and the facility pays only for energy delivered. billing could be directly based on the Btu meter, at fixed or current energy prices. (Including improvements such as energy conservation mea- sures or replacement of the conventional water heater, in addition to the parabolic-trough collector system, may require additional billing arrangements.) Codes and Standards Other than local building and plumbing codes, there are no special standards that parabolic-trough solar water-heating sys- tems need to comply with.
In certain juris- dictions, codes could require double-walled heat exchangers or nontoxic antifreeze, but the system design IST usually uses is already double-walled. IST prefers to use an ethylene glycol/water solution as the heat transfer fluid, but can easily substitute nontoxic propylene glycol. If a facility does not already have one, it might need to add a material safety data sheet for ethylene glycol. Utility and Government Incentives and Support Utility company incentives for demand reduction and load management can be an impor- tant non-Federal source of financial assistance.
Demand- side management (DSM) activ- ities, such as promoting solar water-heating systems, can save a utility from investing in sys- tem expansions or help them comply with air quality pro- grams. Some incentive pro- grams are designed for residential customers, but others also apply to or are specifically designed for commercial facili- ties, including Federal buildings. Federal facilities may also negotiate specific incen- tives for larger projects beyond the scope of standard programs or in cases where stan- dard programs do not exist.
The Hawaiian Electric Company, for example, has a commercial and industrial user rebate program that pays $125/kWh capacity reduction of evening peak usage plus 5ў/kWh for 1 year's production by solar projects displacing electric water heat- ing. The Lakeland (Florida) Department of Electric and Water Utilities has started a program—which it expects to be adopted statewide—in which the department acts very much like an energy service company. The utility installs metered solar water heaters on a lease basis and charges the cus- tomer for the energy delivered.
During the 5 years of operation of a Sacramento Municipal Utility District incentive pro- gram, more than 3000 solar water heaters were installed. On the one hand, anticipated utility industry restructuring may cut back on DSM programs such as these, but on the other, it may encourage utilities to spin off energy service companies specifically set up to design and install energy efficiency and renewable energy projects. Russ Hewett, NREL/PIX05649 Costs Figure 12. Simple connections to intake and outflow temperature gauges and an intake flowmeter allow this Btu meter to quite accurately report how much energy has been delivered by a parabolic-trough collector system.
Parabolic-trough system installation costs will vary considerably with circumstances for particular projects. IST quotes costs on an individual basis. Costs per unit will, however, generally be higher for smaller projects and lower for larger projects. Costs for three completed projects ranged from $21 to $32 per square foot of collector and $101 to $135/MBtu of energy per year ($24 to $43 per square foot and $113 to $204/MBtu per year in 1997 dollars). New technology that IST is now using costs about 10% more but produces about one- third more energy. Two new projects cost $29 and $36 per square foot of collector and $101 and $132/MBtu per year.
The larger of these projects, however, was oversized with unusually large storage to accommodate local utility peak pricing for electricity, so a large new project is quite likely to have lower costs than these. Under an ESPC contract, the facility does not pay for the project cost, but instead pays for the resulting utility bill savings. A flowmeter on the intake and temperature gauges on intake and outflow are connected to a Btu meter that calculates energy deliv- ered. If the facility has concerns about the energy delivery calculation, FEMP/NREL can set up an independent verification system for initial system operation.
The IDIQ contract directs establishment of an annual energy use baseline for the facility and projection of energy cost sav- ings. Monthly billing is based on projected energy delivery and fixed energy costs agreed on in the delivery order. Otherwise, Although Federal facilities can accept utility rebates, they cannot take advantage of tax credits or incentives, so the following does not apply to Federal facilities that purchase a parabolic-trough system outright. Even with an ESPC project, the facility cannot use tax credits or incentives, but the installing company or third-party investor may be able to.
Tax incentives can therefore be very important for parabolic-trough sys- tems installed as ESPC projects. Because of such incentives, it is not unusual for ESPC projects to be financially attractive to the system installer or third-party investor even if it would be economically marginal for the Federal facility to purchase the system. (See case studies on pages 17 and 18.) System cost and the cost of competing conventional water heating will always be the dominant factors, but if those factors make the mar- gins close, tax incentives may make projects financially feasible.
The Federal government currently pro- vides a 10% business energy tax credit for purchase of solar and geothermal energy equipment (Section 1916 of the Energy Policy Act of 1992; 26 USC 48). Also, 26 USC 168 allows for accelerated deprecia- tion of solar energy property investments — 5 years instead of 20 years. These two incentives can be quite significant to a third- party investor with a high tax bill. A hypo- 16