Madbury, New Hampshire - Solar Hot Water and Solar Power
This recent project in Madbury, New Hampshire features both a flat plate solar hot water array, and 5kw of solar electric production

The dizzying drop in cost of photovoltaic (PV) panels is great news that’s making headlines, as well as shifting the way architects, green builders, and even solar installers think about venerable solar thermal technology.

With high-efficiency electric heating equipment available, and PV at record-low prices, doesn’t it make more sense to install an electric water heating system and then use PV to generate electricity to offset that electric load? Isn’t that “Solar hot water?”

Well… not so fast. While electric water heating backed up by PV works great for certain cases, the full story is a bit more nuanced. For homes occupied year-round with moderate (60GPD+) hot water consumption, solar thermal remains a clear winner for domestic hot water loads (the game is changing in solar space heating, but we’ll address that another time).

Solar Thermal: A Use it or Lose It Solution

For solar thermal to make sense you should occupy your home during the summertime, so as to take advantage of free hot water during peak production months. Unlike photovoltaic systems, which are able to bank excess summertime production for the winter by selling power to the grid, solar hot water systems are not good at providing storage for more than a few days at a time.

When properly sized, a solar hot water system will provide around 76% of year-round hot water consumption: 100% of the hot water a household consumes from May to September (and not too much excess), and ~50% of hot water use in the off-season.

Clearly, a home needs to be occupied in the summertime for solar thermal to make sense:

Solar Thermal Percent of Year Round Hot Water Heating

A Tale of Two Houses

Bowdoinham, Maine - Tube Solar Hot Water
For an active family, solar thermal is the least expensive way to meet year-round domestic hot water loads.

Solar thermal technology is much more efficient at converting sunshine to heat than photovoltaic panels are at converting sunshine to electricity (~60% vs. ~19%, respectively). This means that more hot water is available, at a lower cost, than a comparable electric-powered system. The differences are minor for a house with small hot water loads (<30gal/day) but as a household's hot water needs increase, solar thermal outpaces an all-electric system pretty quickly. Let's compare the options for two houses. The former is a single person moving into a high-efficiency home. She uses a meager 20gal/day of hot water. Another is a family of 4 in a conventional home, which uses around 60gal/day. Using a new, efficient electric tank, the single person will use around 1,600 kWh of electricity each year to heat water. To offset that with PV, she will need around a 1.3kw system. We will assume she has already maxed out state rebates on a previous PV system for "plug loads" (i.e. all of their other power needs) but still qualifies for the 26% federal tax credit. At a rate of $4.5/installed watt, the 1.3kw system + nice electric heater will come out to around $5,095. That's indeed less expensive than a solar thermal system, which will cost about $6,700 after state and federal rebates, and still require a bit (~$200) of electricity each year for water heating. Things change quickly with a family that uses 3 times that amount of hot water (common, even conservative in many cases). In the 4 person household, we'll say the home uses 4,700 kWh/year for water heating. A 3.7kw PV is needed to offset the larger load. Again, assuming a federal credit but no state rebate, the PV system + nice water heater comes out to around $11,500. Now the solar hot water system, at $6,700 net, is the obvious choice (even if this home has not used up state PV rebates). Even adding a bit of PV to cover backup water heating (1kw will cover that $200/year nicely), the whole system comes out to around $9,200 total. In short, the choice between one option or another depends a great deal on the behavior of a home's occupants and the size of a home. Seasoned solar designers will look at the overall picture of a home rather than assuming that "one size fits all."

Typical Costs of Running a Water Heater    
Number of Occupants 1 4
Gal/day of HW use 20 60
kWh/yr used for HW (inefficient tank) 1,900 5,700
kWh/yr used for HW (efficient tank) 1,600 4,700
Cost for electric + PV option $5,095 $11,500
Cost for solar thermal option $6,700 $6,700
Cost for heat pump + PV option* $5,550 $5,550
* See caveats on heat pump option, below

Solar Hot Water Versus Heat Pump Water Heaters

Heat Pump Water Heater Diagram
Schematic of a Stiebel Eltron heat pump water heater

The introduction of heat pump water heaters makes the the solar hot water vs. electric water heating debate more complicated. For a cost of around $3,000 installed, these high-efficiency electric water heaters offer 2.5x more heating per kWh than conventional water heaters.

We recently calculated a demand of around 1289kWh/yr to run one of these units for a new construction project, or about the same annual production as installing 1kw of PV panels.

Based on an installed price of $4.5/watt for PV, this hypothetical hot water system results in an installed cost of around $7,500 prior to incentives, which are worth $1,950 (note that most PV systems are a minimum of 1.88kw so more likely the PV system would be sized a bit larger and meet some part of other household loads as well).

While the heat pump and PV solution hold a slight cost premium (around $1,150 less) than solar hot water in this case, it’s not quite a clear case against solar hot water:

  • If you are already investing in a PV project, adding solar thermal opens up additional state rebate money you would not other tap into. At $1,000 or $1,500 (ME and NH, respectively), the state rebates for solar hot water are more generous than for heat pump water heaters.
  • Heat pumps are noisier typically than a solar hot water tank. This matters most in new, efficient buildings where mechanical rooms may be close to living quarters.
  • Heat pumps achieve their higher efficiency by using ambient air temperature to heat water – in the wintertime this means using heated interior space for water heating, which adds to the overall heating load of the building, thus more energy is consumed to keep the building at a comfortable temperature.
  • Warranties on heat pumps and solar hot water equipment are similar (10 years), though we feel that the long-term maintenance costs of solar hot water will be less than service costs of heat pump systems.
  • Solar hot water collectors will take up less space to produce a household’s hot water than a comparable PV array offsetting an electric device. This is important for households that want to make the deepest cut into their electric bill as possible and have limited south-facing roofspace.

Solar Thermal Stays Strong

The dramatically shifting landscape of solar electricity makes for exciting times. It’s never been better to invest in a photovoltaic system, particularly while both Maine and New Hampshire have generous state rebates.

That being said, solar hot water systems still make great financial sense in many cases. Here’s the takeaway:

Good Candidates for Solar Thermal Water Heating:

  • Will replace an inefficient, high-mass boiler or older propane/electric tank for water heating
  • Occupy the home year-round
  • Use a fair amount of hot water
  • Have adequate space to install a 80-100 gallon storage tank

Good Candidates for Solar Water Heating with Electric + PV:

  • Vacation or seasonal homes
  • Already have an efficient water heating system (on demand or efficient electric tank)
  • Meager hot water needs
  • Not a lot of space available for mechanical systems

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