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SOLAR ENERGY

Solar Hot Water Heaters Guide: Benefits, Costs and Installation

Harnessing the Sun's Power with Solar Hot Water Heaters

If you’ve started prioritizing energy efficiency and sustainability over the past few years, you’re not alone. More and more households are making an effort to adopt greener habits and technologies that can help reduce energy costs and protect the planet. One of the most cost-effective, energy-efficient changes you can make is switching from an electric- or gas-powered water heater to a solar water heating system.

According to the U.S. Department of Energy (DOE), water heating accounts for about 18% of your home’s energy costs, which is why investing in a solar water heating system can be so impactful for both your financial and sustainability goals. In fact, a solar water heater has the potential to pay for itself within just a few years.

In this guide, we’ll explain how solar water heaters work, show you which kinds of systems work better for specific climates and give you pointers that can help you make an informed decision about whether a solar water heater is the right choice for your home.

A solar water heater labeled “Solar Prince” is sitting on an orange roof next to its panel in a location with palm trees in the background on a cloudy day.

Understanding Solar Hot Water Heaters

While most water heaters use electricity or natural gas to heat your home’s water supply, solar water heaters use sunlight instead. Several types of solar water heating systems are available, and each is designed to meet your home’s specific needs, based on your local climate, existing water heating setup and daily hot water usage.

Explore the different types of solar water heating systems below to narrow down your options and find the best solution for you.

Types of Solar Collectors:

Solar water heaters use rooftop solar collectors to capture sunlight and convert it into thermal energy that heats water. Understanding the three basic types of solar collectors and how they work is the first step to identifying the right solar water heater for your home.

A Solahart brand solar hot water panel and integrated tank on a house roof in Australia.
  • Flat-Plate Collectors (FPC): FPCs are the most common type of collector. They have a dark, sunlight-absorbing metal plate protected by a transparent cover that lets sunlight pass through, along with a layer of insulation on the back to minimize heat loss.


Best For:

  • Smaller budgets: lower initial cost, low maintenance and long lifespan
  • Warmer regions: long summers, moderate to hot weather, minimal overcast days
  • Evacuated Tube Collectors (ETC): ETCs are extremely efficient collectors made up of parallel rows of transparent glass tubes, each with a vacuum between the outer and inner tubes to minimize heat loss. These collectors perform well even in cold climates and low sunlight, but they are more expensive than flat-plate collectors.


Best For:

  • Higher budgets: higher initial cost, but low maintenance and long lifespan
  • Colder climates: highly efficient in freezing temperatures and minimal heat loss
  • Cloudy regions: performs efficiently with minimal sunlight

  • Batch Collectors or Integrated Collector-Storage (ICS) systems: ICS systems use dark, insulated tanks or tubes that hold water heated directly by the sun. They are simple, passive systems that don’t require pumps or controls, making them low-cost and easy to install. However, they work best in warm climates that don’t need a closed-loop circulation system.


Best For:

  • Smaller households: low to moderate hot water needs
  • Warmer regions: best for climates with no freezing temperatures
  • DIY and budget-friendly projects: simple design, low cost and easy to install

Types of Solar Water Heaters: Active vs. Passive

Now that you understand the different types of solar energy collectors, let’s explore the two main categories of solar water heating systems: active and passive.

Active systems use pumps and controls to actively circulate water and optimize heating, while passive systems rely on natural forces like gravity and convection to passively move and heat water without mechanical intervention. This difference significantly impacts the system’s efficiency, cost, maintenance and suitability for various climates.

1. Active Solar Water Heaters: Active systems utilize electric pumps, valves, and controllers to move water or a heat-transfer fluid from the solar collectors to the storage tank, actively managing the heating and circulation process for greater efficiency.

  • Direct Systems: These systems circulate water directly through rooftop solar collectors, heating it as it flows and then storing it for use. Because the water is heated directly, this system requires consistent sunlight and mild weather conditions.


Best For:

  • Warmer regions with mild winters
  • Households with high hot water demand
  • Efficient systems with higher upfront costs but long-term savings
  • Indirect Systems: These systems actively circulate a non-freezing fluid (such as glycol or antifreeze) through the solar collectors, which absorb heat from the sun and then transfer it to the water using a heat exchanger. This indirect approach prevents the water from freezing in cold temperatures, making it suitable for colder climates.

Best For:

  • Cold regions prone to freezing temperatures
  • Homeowners seeking efficient year-round hot water supply
  • Higher budgets for a more complex setup

2. Passive Solar Water Heating Systems: Passive systems do not use pumps or electrical components. Instead, they rely on natural convection (the natural rise of hot water and fall of cold water) to passively move heated water from the collectors to the storage tank.


Best For:

  • Warmer regions with minimal freezing
  • Smaller households with moderate hot water needs
  • Low-cost, low-maintenance solutions
  • Thermosyphon Systems: These systems have a solar collector positioned below a storage tank. As water heats in the collector, it naturally rises to the storage tank above, while cooler water flows down to be heated.


Best For:

  • Mild climates with occasional freezing
  • Homes with a steady daily hot water demand
  • Reliable, simple solar water heating option

The Cost of Solar Hot Water Heaters

Solar water heaters can pay for themselves through energy savings and solar tax credits within three to six years, according to Forbes. However, the initial investment can range from $3,000 to $9,000, depending on the system’s size, type and installation complexity.

  • Save on Energy Costs: After the project makes up for its initial costs through energy savings, your water will be heated by sunlight at no additional cost to you (unless you end up needing a supplemental water heater). As mentioned earlier, this will significantly increase your energy savings since water heating accounts for around 18% of your energy costs. Plus, since sunlight is free, you won’t have to worry about fluctuating energy or fuel costs.
  • Government Incentives: The federal solar tax credit (ITC) allows homeowners to deduct 30% of the installation cost for systems installed before December 31, 2032. Learn how to qualify. Additionally, many states and local governments offer rebates or incentives that can further reduce the initial investment.
A person in a black shirt wearing round glasses in a beige room counts money while sitting at a desk with a laptop, papers, cash and a calculator.
  • Long-Term Value and Payback Period: Solar water heaters usually last over 20 years, adding long-term value to your home. This makes solar water heaters a solid investment, particularly in areas that get lots of sunlight, have high energy prices or where conventional fuels are more expensive.
  • Determining Efficiency: When selecting a solar water heater, it’s important to consider the system’s Solar Energy Factor (SEF) and Solar Fraction (SF). The SEF measures the energy delivered by the system relative to the energy required to operate it, while the SF indicates the portion of the total hot water heating load supplied by the solar heater. Systems with higher SEF and SF values are more energy-efficient and result in greater cost savings. Learn more.

Installation and Maintenance

Proper installation and maintenance are crucial for ensuring the optimal performance and longevity of a solar hot water heater.

  • Professional Installation: Poor installation can significantly decrease the efficiency of your solar water heating system. It’s important to hire a professional to install your system—they have the expertise and necessary tools to install your solar water heater correctly for maximum sunlight exposure.
  • Maintenance Requirements: Solar water heaters are low maintenance, but it’s still important to schedule routine checks for leaks, sediment buildup and proper function of pumps and valves. Systems with electrical components may require occasional part replacements.
  • Potential Issues: Scaling—caused by mineral buildup—and corrosion are two common issues that can affect your system’s performance. Installing a water softener can help prevent scaling, while regular inspections can address potential corrosion problems.

Dozens of rooftop solar water heaters have been installed on several buildings on a cloudy day.

Real-Life Applications and Benefits

Solar hot water heaters are versatile systems that can be tailored to meet the needs of different households and climates. Whether you live in a sunny region or an area with more variable weather, there are solar water heating options that can help you save on energy costs and reduce your carbon footprint.

Here are some of the ways a solar water heater can benefit different kinds of homes:

  • Residential Use: Solar hot water heaters are an excellent choice for residential homes, as they provide an eco-friendly and cost-efficient solution for daily hot water needs. A solar water heating system can provide ample hot water for activities like showering, dishwashing and laundry. By cutting down on the use of gas or electricity for water heating, your household can enjoy energy savings without sacrificing comfort.
Two people are standing in a modern kitchen, while one fills a silver pot with hot water and the other holds a mug, smiling.
  • Climate Suitability: Solar water heaters can work in most climates, as long as you select the right type for your region. For colder climates, evacuated tube collectors are more efficient, since they can retain heat even in low temperatures. If you live in a sunny area, flat-plate collectors may be the more cost-effective choice. It’s a good idea to ask a professional contractor what kind of solar water heater is best for your specific home.
  • Hybrid Solutions: Hybrid systems are an excellent choice for regions where sunlight isn’t as abundant. These solar water heaters can be integrated with traditional water heating systems that use fuel or electricity as a backup. That way, you can enjoy reduced energy costs while still having plenty of hot water on cloudy days.

Choosing the Right System for Your Home

Your climate, hot water needs, household size and other factors can affect how long it takes for your energy savings to make up for the cost of your solar water heater. Consider the following key factors as you search for a solar water heating system that meets your household’s needs and maximizes your investment:

  • Household Size and Hot Water Needs: How many people live with you? How much hot water do you use each day? Larger households with more occupants or homes with high hot water usage—such as frequent laundry, multiple showers, or dishwashing—will require a system with a higher capacity.
An aerial view of a beautiful neighborhood with green walkways, trees and solar panels on the rooftop of the home in the center.
  • Households with 1–2 Residents:
    • Integral Collector-Storage (ICS) Systems: Simple, cost-effective and suitable for low hot water needs in mild climates.
    • Small Flat-Plate Collector Systems: Efficient for moderate hot water usage, like daily showers and occasional dishwashing.
    • Thermosyphon Systems: Good for consistent hot water needs with natural convection and ideal in areas with occasional freezing.
  • Households with 3–5 Residents:
    • Large Flat-Plate Collector Systems with Backup Heating: Provides sufficient hot water for regular use and works best in sunny regions with a hybrid setup.
    • Evacuated Tube Collector Systems: Highly efficient for high hot water demands and especially effective in colder or cloudier climates.
  • Households with 5–10 Residents:
    • Evacuated Tube Collector Systems with High-Capacity Storage Tanks: Best for large households with continuous hot water needs. These systems retain heat well in various weather conditions.
    • Active Systems with Direct or Indirect Circulation: Uses pumps for precise control and consistent hot water supply, making it suitable for larger families.
  • More than 10 Residents:
    • Large Evacuated Tube Collector Systems with Multiple Collectors and High-Capacity Storage: Ideal for multi-family homes or small residential complexes with very high hot water usage.
    • Custom Hybrid Systems (Solar with Conventional Backup): Combines solar with traditional heaters for reliability, ensuring hot water availability at all times.
  • Climate Considerations: Your local climate is a crucial determinant in selecting the right type of solar water heating system.
    • Cold Climates (Freezing Temperatures, Less Consistent Sunlight):
      • Indirect Circulation Systems: Uses a non-freezing fluid to prevent freezing and maximize efficiency.
      • Evacuated Tube Collector Systems: Retains heat well and operates efficiently in low temperatures and sunlight.
    • Warm Climates (Ample Sunlight, Rare Freezing):
      • Direct Circulation Systems: Pumps water directly through collectors, making it ideal for regions without freezing temperatures.
      • Flat-Plate Collector Systems: Cost-effective and efficient in warm, sunny climates.
    • Moderate Climates (Mild Winters, Some Freezing Potential):
      • Thermosyphon Systems: Uses natural convection, making it suitable for mild climates with occasional freezing.
      • Integral Collector-Storage (ICS) Systems: Simple and efficient for moderate climates that don’t experience severe or extremely cold winters.
    • Sunny Regions (Year-Round Sunshine, Little to No Freezing):
      • Passive Solar Systems: Easy to install and maintain, making it perfect for sunny areas that don’t experience freezing temperatures.
      • Flat-Plate Collector Systems with Backup Heating: Effective with a hybrid setup in consistently sunny regions.

Long-Term Savings

While the initial cost of installing a solar hot water heater can be substantial, you’ll reduce your water heating costs significantly—which means this upgrade will eventually pay for itself. How much you save depends on your local utility rates, sunlight exposure and your household’s hot water needs.

For example, if you live in a region that’s both sunny and has high energy costs, you could see a return on your investment through energy savings in three to six years. It’s also wise to consider the durability and lifespan of the system; most solar water heaters last 20 years or more, offering sustained savings over decades.

Your savings may also be influenced by local, state and federal incentives and rebates, which can significantly reduce the upfront costs. Using tools like the Solar Energy Factor (SEF) and Solar Fraction (SF) to estimate efficiency and savings can help you choose the most cost-effective system.

An Expert Consultation Can Help You Maximize Your Savings

Given the complex variables involved, such as the specific needs of your household, the climate, roof orientation and shading, it’s important to consult with a qualified solar water heating expert. They can conduct a thorough assessment of your home’s suitability for different types of solar water heating systems and provide precise estimates for installation and maintenance costs. They can also help navigate local building codes, permits and potential incentives to optimize both the system’s efficiency and your savings.

Additional Points to Consider

  • Integration with Existing Systems: For homes that already have a conventional water heating system, it may be worth considering a hybrid setup that integrates solar with your existing gas or electric water heater. This allows for flexibility and ensures a steady supply of hot water, even during periods of low sunlight.
  • Roof Condition and Space: It’s a good idea to inspect your roof and make sure it’s in good condition and can support the weight of solar collectors. The available roof space will also determine the size and type of solar water heater you can install. If your roof space is limited, more efficient systems like evacuated tube collectors, which require less area, may be a better choice.
  • Warranty and Support: Look for systems that come with a robust warranty and ongoing local support. A good warranty can provide peace of mind and protect your investment in case your system malfunctions.

By carefully considering these factors and seeking professional advice, you can feel confident in choosing the most suitable, efficient solar hot water heating system for your needs and enjoy significant energy savings while reducing your environmental footprint.

Embracing a Sustainable Future

Solar hot water heaters offer an eco-friendly, cost-effective solution for reducing your energy bills and minimizing your environmental impact without sacrificing comfort. With numerous benefits, including financial savings and government incentives, solar water heaters are an excellent choice for homeowners who are committed to sustainability.

Ready to explore the benefits of solar hot water heaters? Schedule a free consultation with our EPB Energy ProsSM to find all the ways to save, get answers to your energy questions and discover whether a solar hot water heater is the right choice for your home. We’ll also show you how to qualify for rebates on home energy upgrades and discuss other renewable energy options that can benefit your household. Learn More.

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