To building the Solar Calculator we first determined the expected energy performance of an indoor and an outdoor swimming pool in each of the regions in the Solar Calculator’s map. This was done using an energy performance software tool called “Energy Smart Pools”, a tool developed by the Department of Energy as part of its RSPEC! program (which stands for “Reduce Swimming Pool Energy Costs!”). From the modeling, we obtained the annual energy cost to heat each pool under 4 conditions:

The Simple Payback for the swimming pool cover is the initial cost of the cover divided by the annual energy savings (in $’s) obtained by its use. In mathematical terms it is as follows:

After a brief survey of on-line retail costs of swimming pool covers we selected a median cost of $2 per square foot of cover for manual-type pool covers. This cost included the cover material and a manual take-up reel for storing the cover. In our modeling, we assumed 90% coverage of the pool surface by the cover. Hence, the energy cost of the cover (Cost, cover) was fixed at $1,800 (900 square feet times $2/sq ft.).

The energy savings (Energy Savings, cover) for the cover came directly from our software modeling work (in units of MBtu/year).

Finally, the unit cost for the energy (Unit Cost, energy) is a user input value.

Computing the SPB for an Unglazed Solar Collector

The Simple Payback for an unglazed solar collector is computed in a similar fashion. It is the installed cost of the solar system divided by the annual energy savings, and is computed as follows:

Several assumptions were made that determined the cost of the solar collector:

As in the case of the pool cover, the Energy Savings (MBtu/year) came directly from the RSPEC! performance modeling, and the Unit Cost of energy is a user input value.

Computing the SPB for both the cover and the solar collector

The Simple Payback for both the cover and the solar collector is the total cost of cover plus collector system divided by the total annual energy savings. We computed it as follows:

Note that the Simple Payback is more or less unchanged when you change the size of the pool. That is because both a) the cost of the cover and solar system and b) the annual savings derived from them are approximately linear with the size (surface area) of the pool. That assumption may break down if you equipping a single small pool (in which case you may have to pay a higher price per square foot of pool cover).

Installed cost of solar swimming pool heater system

The Calculator provides a reasonable estimate of the installed cost of the solar hot water (SHW) system(s). It is computed by rule of thumb:

Size of solar collector: We sized the SHW system to provide a solar collection area (array size) equal to ¾ of the surface area of the swimming pool(s). In the detailed design stage that area may well be adjusted (optimized) and this would of course change the installed cost. But the Simple Payback and the IEP’s Best Offer price (explained below) are not significantly impacted by changes in the solar array size.

Installed SHW system cost: The typical unit cost of installed SHW systems of this type (using unglazed solar collectors) is around $11 per square foot of solar collector when installed using non-union labor. When union labor is employed that number is roughly $19.

IEP Best Offer helps you determine the viability of your project

Managers want to get to the bottom line when it comes to decision making. In the matter of heating swimming pools, you have these questions: Will it be profitable for a third party to invest in a solar swimming pool heating system(s) and sell back to you the energy needed to heat your pool(s)? Can he make enough money from the deal while still offering you a better price than you are currently paying to heat your pool(s)? Most importantly and specifically, what would he need to charge you for the heat he supplies? What might his best offer be?

The Best Offer price which is embedded in the Solar Calculator answers that question. It gives you the likely best price you’d obtain for solar heat delivered to the pool and, for comparison, shows you what you are probably paying right now.

Keep in mind that your current cost for pool heating is the price you pay for energy divided by the efficiency of your pool heating system. (In the Calculator we assumed an efficiency of 75%, which is a reasonable number to use.)

Details about the method behind the Best Offer price

The IEP Best Offer price is the price to heat your pool that the independent energy producer would need to charge you, the pool owner, while earning for himself an after-tax internal rate of return of 15%. We computed the Best Offer price using a private ownership Rate of Return methodology and incorporated the results into the Solar Calculator.

The “Private Ownership Rate of Return” method (Independent Energy Producer) computes the annual after-tax cash flow, taking into account the revenues defined in the potential power purchase contract and the costs associated with the construction and operation of the solar swimming pool heating system. The approach captures the relevant investment costs after-tax and compares them with the net cash flow from the investment after-tax over time. Investor feasibility is determined by calculating a project’s potential internal rate of return after tax. In this analysis, an after-tax return of 15% with a 70/30 debt equity ratio was determined to provide an adequate return. The debt coverage ratio (DCR) was evaluated to provide a preliminary indication of the feasibility for financing. A minimum debt coverage ratio of 1.40 was assumed to be adequate. The accompanying table indicates the significant assumptions that were made


Assumptions for IEP Best Offer Calculation

The Federal ITC applies to photovoltaics, solar hot water, and solar hot air. It does not apply to solar heating of pools or daylighting.

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