Solar hot water systems

Solar panels and solar hot water panels on a house roof

A solar hot water system uses the sun's energy to heat water and consists of:

  • solar collectors (or panels) – roof-mounted solar collectors absorb sunlight to heat the water
  • a water storage tank – can be located either on the roof directly above the collectors, or on the ground like a conventional hot water system
  • a gas or electric booster – heats the water when necessary, so that you never run out of hot water on cold or cloudy days, or days where you use lots of hot water.

Solar hot water and energy efficiency

A solar hot water system is more expensive to buy and install, but the running costs will be significantly lower. Solar hot water systems will vary in price, depending on the model, tank size and number of panels. The cheapest and most environmentally-friendly type of water heater to run is natural gas-boosted solar. Fit a low-flow showerhead and keep the booster thermostat at the recommended setting (usually 60˚C) to save even more.

Types of solar hot water systems

Close-coupled thermosiphon

Close-coupled systems have roof-mounted solar collectors combined with a horizontally-mounted storage tank immediately above the collectors. Heated water rises naturally through the solar collectors and enters the storage tank. The heated water then forces the cooler water at the base of the storage tank out, where it flows down to the bottom of the collectors. This cycle operates continuously while the sun is shining and is called thermosiphon flow.

Forced circulation system

In forced circulation systems, the tank is located below the level of the collectors, usually at ground level. Water must be pumped from the tank to the collectors and back by a thermostat-controlled pump. These pumps are not expensive to run. Use this system if your roof isn't strong enough to support the weight of a water tank, or if you do not like the look of a water tank on your roofline.

Solar hot water installation tips

Regardless of the type of hot water system you choose, simple installation tips will help you save energy and money. Refer to our tips specific to solar hot water installation and solar hot water FAQs to get started.


There are two incentives available to Victorians replacing an existing electric or gas hot water system with a solar hot water system:

Each incentive has varying eligibility requirements.

Reduce your hot water costs

Regardless of the type of hot water system you use, there are simple ways you can reduce your hot water costs.

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Smarter choice

Energy efficient appliances will save you money. The Smarter Choice retail program will help you make better choices when buying new appliances, hardware and lighting.

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