With today’s high fuel costs, tax incentives and rebates, rapidly increasing product options, and growing consumer demand, there has never been a better time to add a solar water heater to a new or existing home.

The U.S. Department of Energy estimates that a home’s domestic water heating costs should drop by 50% to 80% with the installation of a properly sized solar thermal system. Installed costs for typical residential solar water heaters begin at around $5,000, and they qualify for the 30% federal tax credit currently available, as well as for state and local incentives, where available.

Given these offsets, manufacturers claim that a system can recoup its initial cost in as little as three years, but the payback period varies widely depending on the home’s average DHW consumption, local energy prices, geographic location, and other factors, such as whether natural gas, propane (LP), oil, or electricity is used to heat the home’s water.


There are two basic types of solar thermal systems:

“Passive” systems require no pumps or electricity to operate, relying instead on natural thermo-siphon action driven by the temperature differential between the solar collectors and the water inside the storage tank. Because these systems circulate the home’s actual domestic water, they are mainly used in areas where temperatures stay well above freezing.

“Active” solar thermal systems use a differentially controlled pump to circulate freeze-protected fluid, such as glycol, up to the collectors and back to the holding tank through closed-loop heat-exchange tubing, which transfers the fluid’s heat to the home’s domestic water. For maximum energy efficiency, some systems use a small photovoltaic panel mounted with the collectors to power their pumps.

Sun-heated water is not difficult to produce, and the solar collectors available today have changed little in form and function from those developed over the past 50 years. The most common, and typically least expensive, type are flat-plate collectors, which circulate water or fluid through serpentine rows of copper tubing arrayed against a heat-absorbing surface. Average efficiency ratings—the ability to convert sunlight to usable heat energy—for flat-plate solar collectors can reach 80%.

In recent years, manufacturers have increased the efficiency of flat-plate collectors by adding better insulation, heat-retaining glazing, heat-absorbing coatings on the collector plates, and other high-performance features. The low-profile collectors introduced by Velux in 2008, for example, have a complex, computer-designed pattern stamped into the absorber plate surface that refracts solar radiation to increase heat absorption and reduce heat loss from reflectivity.

Evacuated—vacuum—tube solar thermal collectors, the main alternative to flat-plate collectors, collect and transfer heat energy through a series of insulated glass tubes purged to a near-perfect vacuum. Evacuated tubes are growing in popularity because they offer higher heat transfer—manufacturers claim up to 99% efficiency—and are better at capturing solar radiation where site conditions do not allow placing the collector units at an optimum angle toward the sun. This is especially important in cold-weather locations. However, evacuated-tube systems have a higher initial cost, are more susceptible to snow and ice accumulation that limits performance, are at risk for vacuum loss, and are bulkier in design, which many homeowners and communities dislike.

Comparing solar product performance is difficult because it is based on not only the equipment itself but also on the geographic and site conditions where it is installed. The best comparative tool available would probably be the test ratings published by the Solar Rating and Certification Corp. (SRCC) for solar water heater components and systems. These ratings are the basis for obtaining points toward green home certification under the National Green Building Standard.