U.S. Solar Water Heating

Bryan Fairbanks
December 13, 2012

Submitted as coursework for PH240, Stanford University, Fall 2012


Fig. 1: Passive, Direct, Flat Plate Thermosyphon System (Source: Wikimedia Commons.)

The first commercial solar water heater was patented by Clarence M. Kemp in 1891. [1] Since then, commercial solar water heaters have been used by households in numerous countries to heat water for domestic purposes. After a solar water heater is installed, it captures free energy from the sun, thereby reducing energy bills and helping shield homeowners from the burden of increased energy prices. It appears that other countries have recognized the benefits of solar water heating, including Israel, where as of 2007 85% of all households had a solar water heater. [2] Although many states currently offer financial incentives for solar water heaters, they account for less than 1% of all household water heaters in the country. [3] Why don't more U.S. homes have solar water heaters?

Solar Water Heating Systems

Not all solar water heaters are created equal: they vary greatly in price, efficiency, and appropriateness for different climates. All solar water heating systems are categorized as either active or passive. Active systems are more complex and costly because they rely on pumps and various electronic controls to move fluid through the system, but they are also more efficient. Passive systems solely rely on gravity, pressure from domestic water pipes, and convection to move fluid through the system. [4] Active and passive systems can be further categorized as either direct or indirect. In direct systems, the water destined for use within the home is heated and circulated through the system. Indirect systems instead heat and circulate an anti-freeze fluid that eventually transfers heat to usable water by means of a heat exchanger. Although indirect systems are often more expensive than direct systems, they are beneficial in locations that experience freezing temperatures. [5,6]

Active systems include direct or indirect flat plate systems and evacuated tube systems. Active flat plate systems, the most common solar water heating systems used for residential buildings in the United States, feature a series of pipes that rest on an absorber plate and are encased in an insulated box with one glass face that allows incoming sunlight to heat the pipes. [5] Active evacuated tube systems consist of evacuated tubes that surround copper pipes containing a fluid that transfers heat to water or another fluid when hot. Although more efficient than flat plate systems at low temperatures, they are more commonly used for commercial buildings in the United States because they can heat water to higher temperatures than are needed for residential use. [5]

Passive systems include integral collector-storage systems and thermosyphon systems. Integral collector-storage systems, also called batch systems, are traditionally direct and feature a dark- colored tank or set of large tubes heated by the sun. To reduce heat loss, the system is encased in an insulated compartment with one glass face. Although insulated, ICS systems lose heat overnight and are ineffective for households that require a significant amount of hot water in the morning. With few parts, they are the least expensive systems, but they are not effective in regions with freezing temperatures. [4,5,6] Thermosyphon systems use flat plate collectors or evacuated tube collectors and can be direct or indirect. They take advantage of gravity and convection by placing the storage tank above the collector. Cold water or an anti-freeze fluid is pulled by gravity from the tank and into the collector, later rising back into the tank by convection after receiving heat from sun. [5]

Break-even Analysis

As evidenced the in the previous section, freeze protection is an important component of a solar water heating system. The Pacific Northwest National Laboratory and Oak Ridge National Laboratory have shown that the probability of at least one pipe freezing in 20 years is high for the majority of the United States, even with 1" insulation. Only parts of California, Arizona, Texas, Louisiana, Florida, and Georgia have less than a 10% chance of a pipe freezing in 20 years. [7] Therefore, in determining whether a solar water heaters make sense for U.S. households, an indirect system using an anti-freeze fluid will be evaluated. The National Renewable Energy Laboratory (NREL), when considering break-even costs for solar water heaters in the United States, assessed an active, indirect flat plate system. [8] In order to determine the viability of solar water heaters, household energy use, system price, location-based system performance, conventional heater fuel costs, and conventional heater system performance need to be established. Assuming an average household hot water usage of 64 gallons per day and a set point of 120 degrees Fahrenheit, the energy required to heat water for a year would equal: [9]

Required Energy = 64 gal/day × 8.34 lb/gal × 1 Btu/lb°F × (120 - 60)°F × 365 d/yr = 11.69 × 106 Btu/yr

The cost of a solar hot water heating system can vary based on the type and specific model. NREL estimates a system price of $7,000, which falls within the commonly held range of $6,000-$10,000. [3,7] The system performance can be estimated by using the solar fraction, which is the fraction of energy required for water heating supplied by the solar water heater. [8] NREL calculated solar fractions in different parts of the country for the active, indirect flat plate system based on performance ratings from the Solar Rating and Certification Corporation. [8] The last pieces of information needed for a simple payback calculation are the fuel cost and performance of a conventional gas and electric water heater. The U.S. average residential cost of natural gas from October 2011 to October 2012 was $1.01/therm and the average cost of electricity for the same time period was $0.12/kWh. [10] Standard efficiencies for gas and electric water heaters are 60% and 90%, respectively. [9] Therefore, the savings per year and simple payback period for the active, indirect flat plate system in Los Angeles (yearly solar fraction = .08) if the alternative is a gas water heater are as follows:

Savings = .80 × ( 11.69 × 106 Btu/yr × $1.01/therm) / (100,000 Btu/therm × .60) = $157/yr

Simple Payback = $7,000/($157/yr) = 45 yrs

The savings per year and simple payback period if the alternative is an electric water heater are as follows:

Savings = .80 × ( 11.69 × 106 Btu/yr × $0.12/kWh) / (3,412 Btu/kWh × .90) = $365/yr

Simple Payback = $7,000/($365/yr) = 19 yrs

The calculations above reveal that even in a location with a high solar fraction, solar water heaters take a significant amount of time to pay for themselves. Although subsidies, maintenance costs, and loan costs were not taken into account, NREL evaluated these factors and determined that households would break even or make a positive return on a $7,000 solar water heater after 30 years if the alternative was natural gas water heating in regions totaling 0.04% of the residential energy demand. [8] Households would break even if the alterative was electric water heating for regions totaling 16% of the residential electricity demand. This percentage increases to 51% if a system is $2,000 less expensive, although in reality only a portion of households in these regions will have the correct home orientation and financing options to break even. [8]


The high initial investment and low cost of natural gas make it especially difficult for a solar water heater investment to break even over a 30 year time period. As long as these conditions continue, solar water heaters will not make economic sense for most of the households that use natural gas even with current subsidies. Although a portion of the homes that use electricity might benefit from a solar water heater, break-even conditions or minimal savings alone will not necessarily spur widespread adoption. In order for solar water heating to become prevalent in the United States, system costs will need to come down significantly or fuel prices will need to rise dramatically.

© Bryan Fairbanks. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.


[1] K. Butti and J. Perlin, A Golden Thread: 2500 Years of Solar Architecture and Technology (Cheshire Books, 1980).

[2] G. Grossman, "Renewable Energy Policies in Israel," in Handbook of Energy Efficiency and Renewable Energy, ed. by F. Kreith and D. Y. Goswami (CRC Press, 2007), p. 2-26.

[3] K. Hudon et al., "Low-Cost Solar Water Heating Research and Development Roadmap," U.S. National Renewable Energy Laboratory, Technical Report NREL/TP-5500-54793, August 2012.

[4] "Solar Water Heating," U.S. National Renewable Energy Laboratory, DOE/GO-10096-050, March 1996.

[5] "Heat Your Water with the Sun," U.S. National Renewable Energy Laboratory, DOE/GO-102003-1824, December 2003.

[6] A. Contryman, "Solar Water Heating Economics," Physics 240, Stanford University, Fall 2010.

[7] M. C. Baechler and P. M. Love, "Solar Thermal & Photovoltaic Systems," Pacific Northwest National Laboratory, PNNL-16362, June 2007.

[8] H. Cassard, P. Denholm and S. Ong, "Break-even Cost for Residential Solar Water Heating in the United States: Key Drivers and Sensitivities," National Renewable Energy Laboratory, NREL/TP-6A20-48986, February 2011.

[9] D. Grubb, "Installing On-Demand Water Heaters," J. Light Construction, February 2006, p. 1.

[10] Monthly Energy Review, U.S. Energy Information Administration, DOE/EIA-0035(2012/11), November 2012.