State promotes solar thermal as propane alternative

State officials say solar thermal systems could be an option for homeowners and businesses looking for an alternative to propane heating.

To help Minnesotans make the switch, state officials are reopening an incentive program for homeowners and businesses that want to install solar hot water and space heating systems.

The program helps with the costs of installing systems that were manufactured in Minnesota. A similar program for solar panels was oversubscribed, but Commerce Commissioner Mike Rothman said officials have found it harder to get the word out about solar thermal.

"A lot of people don't know about solar thermal," he said. "It's less of a focus from a public policy perspective, and we know that either commercial customers, agricultural applications that are out there or for homes that have volatile prices in whatever their source of heating is, this could be an opportunity for them to use an alternative source to heat their homes."

Propane prices in the state spiked this winter, leading state officials to offer additional heating assistance to those in need.

Given that the price volatility for propane and other fuels could continue, Rothman said consumers should think about ways to conserve energy and consider supplemental forms of energy or changing to different systems.

Those installing solar thermal systems might also be eligible for federal tax credits, he said.

"We do know that the major reasons for that happening could happen again," Rothman said of the sharp rise in propane costs. "We want to make sure that for people who are looking for a way to solve those issues for themselves. They should be thinking about other ways to do it."

The state incentive program applies only to solar thermal systems. A similar program to help businesses and homeowners install solar panels for electricity received more applications than the state will be able to fund.

About $160,000 in incentives for solar thermal systems is available, and officials said projects could also be eligible for federal renewable energy tax credits.

Rothman said homeowners and businesses will have to research their options to see if solar thermal would be cost effective.

"People should take a definite look at it," he said.

For example, he said, if installation of such a system cost $6,000, up to 25 percent could be paid by the state rebate and the federal tax credit could cover up to 30 percent of the cost.

"If you compare that to what you're currently paying for propane or other heating systems, you might find that this is a cheaper alternative," he said.