Carolina dairies see fast payback from solar water systems Federal cost-share provision expires May 12, while other incentives continue to warm prospects for sun-heated water.

By Gabriela Martin
Posted March 9, 2006

Tally Ho Dairy

In 1937, Beth Talley’s grandfather started up a diary in the foothills of the Blue Ridge Mountains of North Carolina, more than an hour southwest of Greensboro. Today, Mrs. Talley and her husband Rick continue the family tradition as owner-operators of the Talley Ho Dairy, raising and milking a herd of 200 Holstein cows. Their cows average about 22,000 lbs of milk a year that the Talleys sell to the Maryland Virginia Cooperative.

The operation requires the use of 300-500 gallons of hot water per day at around 145°F to sanitize the milking equipment, wash the tanks and help cut butterfat residue in the milk handling equipment. So far, Rick Talley has relied on electricity to heat his water but that is about to change. Later this spring/summer he will be installing a solar thermal system to heat the water. “The dairy business can be tough,” says Talley, “If I can save on my electric hot water bill that will be good for my business.”

The solar hot water system at the Talley Ho Dairy will consist of ten 4x8-foot panels that will be placed on the barn roof. With the help of a small pump, the system circulates water through the panels where it absorbs the heat from the sun. The solar-heated water flows out of the panels to be stored in a 300-gallon drain-back storage tank. The milk house’s incoming cold water flows through a heat exchanger in the storage tank where it is pre-heated with the free solar energy before it flows into the propane-fired hot water tank to be used as needed.

The solar hot water system should reach water temperatures from 140-160°F, and even higher in the summer. The electric hot water heater will serve as a back-up, when needed.

“Solar hot water systems are actually pretty simple technology,” say Bill Bostic of Evergreen Energy Co. “Whether your are in Nova Scotia or North Carolina, as long as the sun shines, there is free energy available for you to harvest. If properly installed and maintained, they can easily last 20-30 years. I have many customers from the early ‘80s that have saved thousands of dollars in energy cost over the last two decades. This technology works.”

The Talley Ho Dairy’s new system fully installed costs nearly $20,000, but thanks to current Federal and State support for solar systems, Rick Talley faces much more favorable economics. With Bill Bostic’s help on the USDA 9006 renewable energy grant application, Rick Talley was able to obtain about $4,400 towards the cost of the system. Starting January 1, 2006 (and effective through December 31, 2007) a 30% Federal tax credit is in effect for solar systems. Furthermore, businesses that install solar systems for their operations can depreciate them over five years. And at the state-level, North Carolina provides a 35% corporate tax credit on the cost of the installation that can be taken in equal amounts over five years.

The final cost to the Talley Ho Dairy will be around $2,500 and Mr. Talley expects that the system will pay for itself in about three years.

Goat Lady Dairy

The Goat Lady Dairy is located on lovely, rolling hills south of Greensboro, North Carolina. For almost 10 years, Steve Tate and his family have been raising goats and producing handmade farmstead cheese. With the milk from their herd of 60 goats and some additional milk purchased from other goat operations, Goat Lady Dairy (www.goatladydairy.com) produces 400-600 lbs of cheese each week from March to December.

In the winter months, just before kidding season, the Tates get a break from milking and making cheese. But Steve Tate is already thinking about next season’s operations. He is about to install a solar thermal system that will provide much of the hot water needed to clean the milking parlor, milk bulk tank, and all the cheese room equipment. “We are committed to nurturing the land and operating our business based on principles of sustainable agriculture,” said Tate, “so looking to the sun as a source of energy seemed natural. But in this case, we will also have significant savings from greatly reducing our use of propane to heat our water.”

The solar hot water system at the Goat Lady Dairy will consist of five 4x10-foot panels mounted on the south facing roof of the barn.

Steve Tate expects that the hot water temperature for their operations will easily exceed 150°F and that the propane-fired hot water heater will mainly function as a back-up on cloudy days.

While the reduction in energy costs is attractive in itself, current Federal and State support for renewable energy has helped to greatly improve the economics. The Goat Lady Dairy solar thermal system will cost $10,000, fully installed. To make the deal more attractive, the Tates:

• Applied for, and received, a Federal Farm Bill grant for $2,500.
• Will us a 30-percent federal tax credit effective through December 31, 2007 for solar systems.
• Will depreciate the system over five years in another renewable energy incentive.
• Will use a 35-percent North Carolina corporate tax credit on the cost of the installation that can be taken in equal amounts over five years.

Add it all up, and the $10,000 solar thermal system is costing Steve Tate less than $1,500. “The cost of propane has gone up 25 percent since last year,” Tate says. “At this level of fuel prices, this system will pay for itself in less than two years!”

Gabriela Martin is Clean Energy Consultant for the Environmental Law & Policy Center in Chicago. ELPC is a Midwest-based environmental and economic development advocacy organization.