Economics of Solar Hot Water
The "average initial" cost to invest in solar hot water is in the $4,000 - $12,000 range. There are some systems available that cost less, however we do not recommend installing them due to their poor reliability and low yearly efficiency. With state tax credits (25% of the purchase price with a maximum of $1,000 per installation), federal tax credits (30%) and when available APS or SRP utility rebates available these initial costs can be reduced significantly making solar hot water a very attractive option .
How much money you actually save versus a traditional water heater depends on a number of important factors:
The amount of hot water you use, Your system's performance Your geographic location and solar resource Available financing and incentives The cost of conventional fuels (natural gas, oil, and electricity) The cost of the fuel you use for your backup water heating system, if you have one.
On average, if you install a solar water heater, your water heating bills should drop 50%–80%.
Costs and payback periods for residential SWH systems with savings of 200 kWh/month System cost After tax credits/rebates Electricity cost/kWh Electricity saving/month Payback period $5000 $1540 11.2 cents per kWh $22.40 5.7 years If you're building a new home or refinancing, the economics are even more attractive. Including the price of a solar water heater in a new 30-year mortgage usually amounts to between $13 and $20 per month. The federal income tax deduction for mortgage interest attributable to the solar system reduces that by about $3–$5 per month. So if your fuel savings are more than $15 per month, the solar investment is profitable immediately. On a monthly basis, you're saving more than you're paying.
The "average initial" cost to invest in solar hot water is in the $4,000 - $12,000 range. There are some systems available that cost less, however we do not recommend installing them due to their poor reliability and low yearly efficiency. With state tax credits (25% of the purchase price with a maximum of $1,000 per installation), federal tax credits (30%) and when available APS or SRP utility rebates available these initial costs can be reduced significantly making solar hot water a very attractive option .
How much money you actually save versus a traditional water heater depends on a number of important factors:
The amount of hot water you use, Your system's performance Your geographic location and solar resource Available financing and incentives The cost of conventional fuels (natural gas, oil, and electricity) The cost of the fuel you use for your backup water heating system, if you have one.
On average, if you install a solar water heater, your water heating bills should drop 50%–80%.
Costs and payback periods for residential SWH systems with savings of 200 kWh/month System cost After tax credits/rebates Electricity cost/kWh Electricity saving/month Payback period $5000 $1540 11.2 cents per kWh $22.40 5.7 years If you're building a new home or refinancing, the economics are even more attractive. Including the price of a solar water heater in a new 30-year mortgage usually amounts to between $13 and $20 per month. The federal income tax deduction for mortgage interest attributable to the solar system reduces that by about $3–$5 per month. So if your fuel savings are more than $15 per month, the solar investment is profitable immediately. On a monthly basis, you're saving more than you're paying.
