Solar hot water systems

Last updated: 2 February 2021

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.

Note: a solar hot water system will only provide power to generate hot water that is stored in its tank. It will not generate power for other parts of your property.

Is solar a good investment?

In terms of the environment, solar hot water is an excellent investment and should be considered. To determine whether solar hot water is a good financial investment, the following factors need to be considered:

  • your geographic location. While they work best in the warmer, northern parts of Victoria, they still perform well in the cooler, southern regions.
  • your roof area and orientation
  • your hot water usage
  • the performance of the system
  • the type and cost of the system
  • the type of auxiliary heating used
  • the installation costs and requirements
  • if there are government incentives available to you.

Which size solar hot water system you will need

Use the following table as a guide to choosing the correctly-sized solar hot water system for your household. Consult your supplier for specific size recommendations.

Number of people Capacity (litres per day) Solar collector size (square metres)
1 to 2 160 to 200 2
3 to 4 300 to 370 4
5 to 6 440 6

Solar hot water systems are generally designed to store larger amounts of hot water than conventional systems.

A correctly-sized system will have hot water left over from the previous day.

On cloudy or rainy days, or days when lots of hot water has been used, the water in the hot water tank may need to be heated by a booster (commonly gas or electric) when the water temperature drops below the thermostat setting.

Up-front costs

Solar hot water systems vary in price, depending on the model, tank size, number of panels or tubes and the capacity of the booster.

The cost will also depend on whether or not a government incentive is available and the size of the incentive.

Energy efficiency and running costs

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.

To save even more, fit a low-flow showerhead and keep the booster thermostat at the recommended setting (usually 60˚C).

Compare running costs

The type of hot water system you have makes a big difference to your energy bills.

Compare running costs of hot water systems

Government incentives

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

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.

Retrofitting a solar collector and tank to your existing electric hot water system

This is possible, but it's likely to be more efficient and economical to buy a new gas or electric-boosted solar system complete with new tanks. This way you'll have a warranty for all the components of your new hot water system.