residential Solar water Heaters: prices and paybacks

Solar water heating is a tested and reliable technology, that can be used in almost any climate - even in climates like the Alaskan, where it can provide most of the residential hot water needs in the April-August period.

On the other hand, the lifespan of solar water heaters is long - typically 20-25 years - and the maintenance costs low (especially thermosyphon systems).

Solar water heaters are cost-competitive and with small paybacks in sunny climates, without freezing temperatures. But their paybacks are too long in colder climates, unless they benefit from state incentives. See analysis in this page.

But though solar water heaters can be used in cold climates, there is an obvious "problem" with them in such climates: their designs are more complex and their prices a lot more expensive.

Which raises the question: are solar water heaters for cold climates worthwhile?


Household spending in water heating
In the USA, the average annual energy bill on hot water amounts to about $210 (EIA, 2011).

To analyze the payback and the economics of solar water heaters we have to consider their prices and the energy savings they provide (they vary with climate).

These savings range from, say, 50%, in some cold climates, to 70%-90% in moderate and hot climates.


As to prices they range...

- between $1.000 and $3.000 for thermosyphon and batch solar water heaters, designed for hot and moderate climates and...

- between $4.000 and $10.000 (US and Canada) for drainback and other systems designed for cold climates; these systems involve pumps, sensors, controllers and heat exchangers, and also a larger surface of solar collectors.
In the US and Europe expect prices of at least $3,000 - $5,000 for drainback and active solar hot water heaters (systems involving storage tanks, pumps, antifreezing and controls to respond to freezing problems). They can meet the hot water needs of average homes: 50-100 gallons (190 to 380 liters) of hot water per day... Simpler water heaters - thermosyphon and batch/ICS systems for moderate and hot climates - can be a lot cheaper: $1,000 and $3,000...

NOTE on solar water heater prices in the US, Israel and China:

According to an EERE document published in June 2011, solar water heater prices range between $5.000 and $10.000 in the USA, $1.000 and $1.800 in Israel, and $300 and $1.000 in China.

Such huge difference is explained by a large set of factors. The type of solar heater (thermosyphon in China and Israel, drainback and similar designs in the US) and factors such as the quality and the capacity of the heaters, explain a lot.

But issues involving economies of scale (market volume: 6 millions installations/year/China, 70.000 installations/year/Israel and 30.000 installations/year/USA) and state policies are no less important.

Comparing prices, savings and spending

The table below compares 1) the prices of solar water heaters with 2) the savings that they can provide, in order to calculate 3) the payback.

The table assumes two benchmark values for hot water heating bills: $200 and $300 (the average US home spends about $210 in hot water heating: EIA, 2011).

We have considered solar water heater prices between $1.000 and $5.000 – and energy savings of 50%, 70% and 90%. We have ignored prices above $5.000 - these solar water heaters aren't cost-competitive.

Here is the table, and the paybacks:

Are solar water heaters competitive?

The impact of savings in the payback of solar water heatersWhat to conclude?

The table speaks for itself.

Solar water heating is cost-competitive and with a short payback in hot and moderate climates. But not in cold climates.




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