Solar Water Heaters - Do They Make Sense?

Last week I began the 'hot' topic of water heating with an introduction to tankless water heaters. 

But if you are looking at ways to reduce water heating costs, what about solar water heaters?  You may be surprised at the choices and decision points.

How Solar Hot Water Heaters Work

Solar hot water heaters actually have a number of different designs, and it can be a bit overwhelming at first.  In fact, there are about five typical system types on the market today, each with its own benefits.

At a high level, there are two types of solar hot water systems - passive and active. Most every type of solar hot water heater also has a backup heater relying on gas or electricity. As we'll see, this is an important consideration when considering solar water heating.

Passive Solar Hot Water

Passive systems are generally cheaper and long lasting, but more intrusive to install and less efficient. They consist of a small tank that is mounted on the roof (i.e. the more intrusive part - and this sometimes requires structural upgrades on the roof).

The most common type of passive system is the batch system, which uses an integrated solar collector and storage tank.

Thermosyphon systems are also occasionally encountered. These systems operate on the principle that heat rises. Thermosyphon systems help to keep some heated water at all times, even at night when the sun is no longer on your side.

Active Solar Hot Water

Active solar hot water heaters use pumps to distribute/circulate water through the system. Water passes through a series of collectors (passages of tubes, pipes or tanks) and is heated along the path. This heating may be direct or indirect.

Direct (aka open loop)

Direct heating relies on simply passing the water through the collectors to be heated. These systems work best if you do not have freezing temperatures.

Indirect (aka closed loop)

Indirect systems are designed for colder climates, and rely on a special antifreeze fluid and a heat exchanger. The antifreeze contains the heat, and water flows around it, separated from the antifreeze, so that it can indirectly 'pick up' the heat.

Solar Hot water Heater Pros and Cons

Pros

• In many scenarios, can save you money on your utility bills
• Related, can serve as a hedge against rising utility prices
• May increase a home's resale value
• Reduction of CO2 emissions

Cons

• Much more expensive up-front costs than traditional water heaters ($1000 to $3500 is typical depending on type and size)
• Timing of solar heating may not align with timing of hot water use.  This could result in higher than expected use of the backup gas or electric heating, especially depending on the type of system you have installed.
• Some cloudier climates may not see much benefit.
• Your home's orientation and sun exposure may not provide optimal solar heating

Are Solar Hot Water Heaters Worth It?

Solar hot water heater are much more expensive in terms of up-front costs, but are they worth it in the long run?  Unfortunately, there is no blanket answer for this. As discussed, local climate, shading, and your own usage patterns all play a role.

As we've already alluded to, if you live in a particularly cloudy or foggy area, such as parts of the west coast, solar hot water is not for you.  However, solar hot water is at least viable in most of the rest of the USA.

First, a few facts regarding the key cost components.

• The US Federal Government is offering a 30% tax rebate on solar hot water costs.  This covers the cost of the hot water system, and does not cover installation or usage.
• Many states are offering their own rebates, including California and Minnesota, among others.
• Many local utilities are offering their own incentives on top of the State and Federal rebates.
• Solar hot water heaters generally have expected lifespans of 15 to 20 years, compared to 10 to 15 years for traditional tank heaters.

Even with all those rebates, you could be looking at $3000 for the solar hot water heater.  And given that most state rebates and the federal rebate are tax-oriented, you will have to spend more up front and wait until tax season to realize those rebates.

Once installed, assuming an average USA climate in terms of sun and no shading on the unit, a family of 4 with average host water usage can expect $200 to $300 in utility savings per year.  That is a nice reduction in your gas or electric bill.   Consider that average utility rates rise 4-6% a year, and you'll see $360 to $600 savings by year 15.

In fact, in a case study in Tucson, AZ (which would be a better than typical scenario), payback of a solar hot water heater would be in 7 years, and over the life of a system an 11% (conservatively) return on investment would be achieved.  Read here for the Tucson case study.

Next Steps

This article just touches the high points of solar water heating. If you are interested in pursuing solar hot water further, my recommendations are:

1. Read this excellent article on Solar Hot Water Basics at Homepower magazine's website.
2. Keep rough track of your hot water usage for a few days or weeks so you have an idea of what times of day you are reliant on hot water.
3. Contact two or three installation companies and have them perform a site survey and provide a quote.
4. Ask these companies about which kind of system they are proposing and why (i.e. passive or active, direct or indirect).
5. Ask these companies about backup heating (i.e. the gas or electric backup for cloudy days, night, etc) and how often it will run.  Be sure to provide a profile of what times of day you are using hot water.
6. Ask about requirement maintenance and maintenance costs for the proposed system.

You may also want (or need) to reduce your overall hot water consumption.  Install low-flow shower heads and consider upgrading to a more efficient clothes washer and dishwasher.