Economics of Solar Hot Water Systems

The information presented on this page has been adapted directly from sources of the Canadian Solar Industries Association (CanSIA), a group Nexus Solar is proud to be a member of. The bulletin's author is Simon Boone; for more information see the info box at the bottom of this page.

Solar thermal is the most cost-effective way to use the sunís energy. In Canada, a single 4 x 8í glazed solar thermal collector will capture between 1,500 and 3,000 kWh of energy per year (depending on consumption and climate). At current electricity rates, that energy is worth $150 to $300 a year. In most residential homes, water heating is the second largest energy consumer next to space heating, costing anywhere from $180 to $480 per year.

Heating water for domestic use is a residential solar application with strong economic potential. Such systems are usually designed to operate year-round, but seasonal solar water heaters are also available and can be cost-effective at the cottage or other areas where the need for hot water is coincident with non-freezing outside temperatures (see Recreational Solar Water Heating, or Residential Pool Heating). A year-round solar water heater system will provide 35 to 55% of annual water heating needs four an average Canadian family of four. In summer, it will provide 75 to 100% of hot water and in winter it will provide less, depending on weather conditions. At 2001 energy prices, in most Canadian homes, that is a savings of $150 to $500 per year. A system would be expected to pay for itself in 8 to 12 years, although the actual payback period depends on system size and future energy prices. However, the larger a consumer of hot water you are, the more you stand to gain financially from a solar thermal water heating system.

Ideally, a year-round solar thermal water heating system would get the most benefit of each collector's capacity, as is the case with domestic solar water heaters. In cases where there are larger demands for heat during summer, such as outdoor swimming pools or water heating at a cottage, there will be excess winter capacity if the design maximizes collector efficiency for summer use. This excess winter capacity could be dumped as winter heat into your home. While it is technically feasible to design a system to provide plenty of winter solar heat, the system would be economically unattractive, unless there was a summertime use for large quantities of hot water. On the other hand, tying solar and wood-heat is a sophisticated and timely use of solar design. A qualified solar professional should be used to investigate the possibility for solar space heating on a case-by-case basis.

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