In 1974, Congress passed the Solar Heating and Cooling Demonstration Act, assigning the Department of Housing and Urban Development the task of testing solar systems in residential buildings, developing standards and performance criteria, and passing on the lessons learned to the building industry and the public.

After awarding builders more than $20 million to demonstrate various aspects of what was then new energy technology, HUD's solar office says it has uncovered a number of unsettling problems with the state of the art of solar systems.

"If one were to judge the quality of the solar systems now being marketed by the performance of systems in the residential program, the decision would be a negative one," the agency's solar researchers concluded in a preliminary analysis. "System quality has been generally poor, and in some cases it has been terrible."

Product quality, designs," HUD contends. Of 918 single and multi-family systems built over five years, 496, or 54 percent, have required repairs to continue operating. In many cases, HUD has had to pick up the repair bills for the installations it sponsored. A spokesman for the solar energy industry says, however, that many of the problems stem from poor installations made in the infant stage of the new technology.

Problems noted by HUD ranged from the severe to the almost silly, but were generally more frequent and serious with active solar systems, particularly those used to heat space rather than water, than with passive systems.

The difference between the two is that active solar systems use mechanical means such as pumps and pipes (for liquid systems), or fans and ducts (for air systems,) to carry heat from outside sunshine collectors to storage, and from there to inside living spaces. Passive systems, on the other hand, generally rely on the structural characteristics of the building to catch and distribute sunshine.

In HUD's demonstration, 65 percent of the installations it sponsored were active; the rest were passive, or hybrid, solar systems.

Many of the difficulties with active systems were simple, seemingly one-of-a-kind installation errors, HUD found, with the discouraging discovery that they were repeated in many different projects.

Examples included pumps and check valves installed backwards; pipes that did not permit system draining; the use of interior insulation on exterior pipes without adequate projection from sunlight and ozone, use of the wrong kind of solder on connections, air-system dampers that did not close tightly and duct joints that leaked.

More serious problems began to crop up in projects about a year ago, HUD found. In the active systems they included fire hazard from poorly manufactured collectors and deterioration caused by corosion in liquid active space systems.

The major fault found with passive systems -- one that is aggravating though not dangerous to homeowners -- was with projects built without temperature controls to balance overheating during sunny hours, and night-time cooling. HUD also suggests, however, that potential fire hazards in some passive designs need to be looked into.

The most disturbing incident reported to HUD took place more than a year ago in Boulder, Colo., when a flat-plate collector on an unoccupied demonstration house with an active system set off a roof fire. Investigation showed that plastic foam insulation used to back the absorber plate and plywood around the collector had become charred under the sun's heat.

Lessons learned, HUD said, were that collector tests were not adequate, and that plywood may not belong in solar systems. This includes passive systems, such as those that use attic space as a heat collection area, HUD noted.

Not many of the manufacturers in the study used plywood in collectors, and those that did have substituted aluminum since the demonstration pointed out the danger, said Guy Wilcomb, executive vice president of the Solar Rating and Certification Corp., an off-shoot of the Solar Energy Industries Association.

Though he agreed tha failures in active systems discovered through HUD's efforts have led to some improvements, Wilcomb criticized the agency for approving projects from incompetent and inexperienced contractors. Few of the problems HUD found were manufacturing errors, he pointed out, but rather poor installations in the early stages of active solar space heating technology.

The corrosion problem, which can occur in liquid collector loops of active space-heating systems, has been recognized for some time. But HUD's demonstration showed that deterioration also occurred in the distribution portion of the systems, causing storage tanks to rust through, heat exchangers to be blocked and pumps to freeze.

In addition, the agency found that most homeowners are unwilling to go to the trouble and expense of periodically replacing antifreeze additives, which is a necessary maintenance step with liquid systems.

All this adds up to a rather bleak picture of the current use of active space-heating systems.

"The technology hasn't caught up to the idea," said a representative of the National Association of Home Builders. Technical difficulties and the cost of active systems -- $10,000 to $12,000 per house in the HUD program -- has led the association to encourage energy-conscious builders to use passive designs and wait for improvements in active systems.

Passive systems, with their extra windows, thick glass and heat-collecting mass, add about $3,000 to $5,000 to house construction costs.

The most promising, and widely used, active solar application is to heat water. An estimated 150,000 solar water-heating systems are in place, including one at the White House. Wilcomb says they cost an average of $1,500 to $3,000 per house, depending on geograhpic location.

HUD, which said hot water systems run from $2,500 to $4,000, found this use of solar energy much more successful than active space heating.

Solar cooling technologies, the agency discovered, also can work, but the problems are severe. None of the few active cooling systems in single-family houses selected for the demonstration are now working. Two multifamily-unit coolng systems still operate, but one has had to be repaired. The cost, in any case, is still too high to make them a practical substitute for conventional cooling methods.

Besides paying for reparis, HUD's solar staff has attempted to spread the world on its demonstration findings to both the solar industry and to consumers. Reams of manuals on solar energy have been published, and the National Solar Heating and Cooling Information Center, set up under the program, still answers questions and makes referrals, despite drastic budget cuts by the Reagan administration. Its name was changed to the Conservation and Renewable Energy Inquiry and Referral Service. The toll-free number is 800-523-2929 (in Pennsylvania, 800-462-4983).

In addition, the agency recently revised its performance guidelines for solar systems, which is a technical reference for the solar industry, builders and government agencies.