Benefits of Solar Water Heaters: There are many benefits to owning a solar water heater, and number one is economics. Solar water heater economics compare quite favorably with those of electric water heaters, while the economics aren't quite so attractive when compared with those of gas water heaters. Heating water with the sun also means long-term benefits, such as being cushioned from future fuel shortages and price increases, and environmental benefits.
Economic Benefits: Many home builders choose electric water heaters because they are easy to install and relatively inexpensive to purchase. However, research shows that an average household with an electric water heater spends about 25% of its home energy costs on heating water.
It makes economic sense to think beyond the initial purchase price and consider lifetime energy costs, or how much you will spend on energy to use the appliance over its lifetime. The Florida Solar Energy Center (FSEC) studied the potential savings to Florida homeowners of common water-heating systems compared with electric water heaters. It found that solar water heaters offered the largest potential savings, with solar water-heater owners saving as much as 50% to 85% annually on their utility bills over the cost of electric water heating.
The FSEC analysis illustrates that the initial installed cost of the solar water heater ($1,500 to $3,000) is higher than that of a gas water heater ($350 to $450) or an electric water heater ($150 to $350). The costs vary from region to region, so check locally for costs in your area. Depending on the price of fuel sources, the solar water heater can be more economical over the lifetime of the system than heating water with electricity, fuel oil, propane, or even natural gas because the fuel (sunshine) is free.
However, at the current low prices of natural gas, solar water heaters cannot compete with natural gas water heaters in most parts of the country except in new home construction. Although you will still save energy costs with a solar water heater because you won't be buying natural gas, it won't be economical on a dollar-for-dollar basis.
Paybacks vary widely, but you can expect a simple payback of 4 to 8 years on a well-designed and properly installed solar water heater. (Simple payback is the length of time required to recover your investment through reduced or avoided energy costs.) You can expect shorter paybacks in areas with higher energy costs. After the payback period, you accrue the savings over the life of the system, which ranges from 15 to 40 years, depending on the system and how well it is maintained. You can determine the simple payback of a solar water heater by first determining the net cost of the system. Net costs include the total installed cost less any tax incentives or utility rebates. (See the box for more information.) After you calculate the net cost of the system, calculate the annual fuel savings and divide the net investment by this number to determine the simple payback.
An example: Your total utility bill averages $160 per month and your water heating costs are average (25% of your total utility costs) at $40 per month. If you purchase a solar water heater for $2,000 that provides an average of 60% of your hot water each year, that system will save you $24 per month ($40 x 0.60 = $24) or $288 per year (12 x $24 = $288). This system has a simple payback of less than 7 years ($2,000 / $288 = 6.9). For the remainder of the life of the solar water heater, 60% of your hot water will be free, saving you $288 each year. You will need to account for some operation and maintenance costs, which are estimated at $25 to $30 a year. This is primarily to have the system checked every 3 years.
If you are building a new home or refinancing your present home to do a major renovation, the economics are even more attractive. The cost of including the price of a solar water heater in a new 30-year mortgage is usually between $13 and $20 per month. The portion of the Federal income tax deduction for mortgage interest attributable to the solar system reduces that amount by about $3 to $5 per month. If your fuel savings are more than $15 per month, the investment in the solar water heater is profitable immediately.
Tax Incentives and Rebates: Some local or State governments offer tax incentives to encourage residents to invest in solar energy technologies. Check with your State or local energy office or Department of Revenue for information. Some electric utilities offer rebates to customers who install solar energy equipment because these installations help utilities reduce peak loads. Peak loads are periods when the utility must generate extra power to meet a high demand. Heating water in the evening is one example.
Long-Term Benefits: Solar water heaters offer long-term benefits that go beyond simple economics. In addition to having free hot water after the system has paid for itself in reduced utility bills, you and your family will be cushioned from future fuel shortages and price increases. You will also be doing your part to reduce this country's dependence on foreign oil.
Environmental Benefits: Solar water heaters do not pollute. By investing in one, you will be avoiding carbon dioxide, nitrogen oxides, sulfur dioxide, and the other air pollution and wastes created when your utility generates power or you burn fuel to heat your household water. When a solar water heater replaces an electric water heater, the electricity displaced over 20 years represents more than 50 tons of avoided carbon dioxide emissions alone. Carbon dioxide traps heat in the upper atmosphere, thus contributing to the "greenhouse effect."
Be a Smart Consumer: Take the same care in choosing a solar water heater that you would in the purchase of any major appliance. Your best protection is to consider only certified and labeled systems. One such label is put on by the Solar Rating &Certification Corporation (SRCC), a nonprofit, independent third-party organization formed by the State energy officials, and consumer advocates to certify and rate solar water heaters.
A national standard (OG-300) addresses a variety of concerns, including safety and health, durability and reliability, installation, performance, and operation and maintenance. To meet this standard, a system is rigorously tested. A certified solar water heater carries the SRCC OG-300 label, and the system performance is listed in a published directory. A similar program has been established for Florida by FSEC. Both SRCC and FSEC provide collector testing and rating programs.
Find out if the manufacturer offers a warranty, and, if so, what the warranty covers and for how long. If the dealer you are buying the equipment from goes out of business, can you get support and parts from the manufacturer, or from a local plumbing contractor?
Make sure that the workers who are actually installing the system are qualified to do the work. Ask the installation contractor for references and check them. When the job is finished, have the contractor walk you through the system so you are familiar with the installation. And be sure that an owner's manual with maintenance instructions is included as part of the package.
A Bright Future: A solar water heater is a long-term investment that will save you money and energy for many years. Like other renewable energy systems, solar water heaters minimize the environmental effects of enjoying a comfortable, modern lifestyle. In addition, they provide insurance against energy price increases, help reduce our dependence on foreign oil, and are investments in everyone's future.
You might also consider other solar energy systems for your home. Systems similar to the solar water heater are used for space heating and swimming pool heating. In fact, pool heating is a major market for solar energy systems. See section Heating Your Swimming Pool With Solar Energy.