Solar PV vs Solar Hot Water

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  • Solar PV vs Solar Hot Water
    Posted by Ben Millar | 1 reply |  Last reply about 4 years and 10 months ago by Solar Geek

    My state doesn’t have any incentives for Solar PV and I’ve heard that Solar Hot Water has a better payback.  Is this true?

  • Ben,

    The answer depends a lot on what type and size of traditional water heater you’d be substituting solar for, and how much hot water you use. A typical 50 gallon electric water heater can cost between $25-45 per month to operate, on the higher side if you have more than 3 people in the house. Gas on the other hand is cheap right now, and a gas water heater might only cost $10-15 per month. A solar heater would provide about 80% of the hot water for a typical home, so it would offset about 80% of those figures. For electric, the solar payback might be $30-35 per month, while for gas it might be only $8-12 monthly.

    Since solar PV has come down a lot in cost over the past decade, its payback is improving, and is comparable to solar water heat in some cases. A good south-facing, unshaded 3kW PV system can produce about $34 each month on average in a southern climate.

    Factoring in the federal tax credit (which every state has), you might be looking at $5k for a decent solar water heater, and about $10k for a 3kW PV system. For water heaters, this translates into a 12 year payback versus electric heat and a 25 year payback versus gas heat. For solar PV, the payback is closer to 17 years, but its saving grace is that it can be used for other purposes than just water heating and can also contribute to a solar generator system.

    So the bottom line would be that a solar water heater is the way to go if you want the best payback and are replacing an electric tank. If you’re replacing gas heat or want additional savings or functionality, PV might be better.

    Note that other factors might decide whether to go thermal vs PV. For example, a solar water heater is much more efficient per square foot than a PV system, and might better fit a small roof. The 12 PV panels needed for a 3kW solar system will take up about 216 sqft, while a comparable solar water heater would need about 64 sqft for the same amount of savings.

    Solar Geek posted on November 10, 2012
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