Solar water heaters: Are they better than solar electric panels?

Illuminating answers to environmental questions.
Feb. 1 2011 7:01 AM

The Best Investment Under the Sun?

Should I get a solar water heater? Or solar electric panels?

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Unfortunately, most owners can't achieve anything close to this optimal efficiency. A typical household uses the most hot water in the morning—that is, shower time. But that's not when solar water heaters work best. In the morning, they've only begun heating water for the day. After sunset, the water in your basement tank gets cooler and cooler. So a good deal of that solar energy can go to waste.

Photovoltaic systems, on the other hand, don't waste surplus energy. Electricity demand peaks at different times depending on the time of year and local weather. But, for the most part, we put the most stress on the grid when the sun is up and producing kilowatt hours, especially in the summer months. And even if your roof panels produce more energy than you can use, the surplus feeds back into the grid, displacing energy that would have been produced by coal, gas, or nuclear plants. (Your electric supply is a two-way street. Just like the power company can push electrons into your home, you can push them back out.) In other words, a rooftop photovoltaic system can spread its benefit across the entire energy grid. Solar water heaters help only a single household.

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To their credit, solar water heaters are much cheaper to install. A solar electric system will run you somewhere between $15,000 and $25,000, though that doesn't account for the tax credits and other incentives that local, state, and federal governments use to sweeten the deal. A water heater—which uses less advanced technology and fewer panels—will cost about one-third as much.

Still, solar electric systems are a better long-term investment. Photovoltaic panels carry 25-year warranties and most will probably last much longer, helped by the fact that they have no moving parts. Over that time, an average system will crank out about 150,000 kilowatt hours of electricity, at least twice as much energy as a typical household would use heating water. (Many manufacturers offer energy savings calculators to check your own potential savings.) To top off these basic savings, solar electric homeowners can make around $300 per year selling renewable energy credits to their utility companies.

This doesn't make solar water heaters bad investments. In fact, quite the opposite: Installing one is almost invariably a smart choice—just usually not as smart as installing photovoltaics. For homeowners who like long showers and own electric water heaters (which are more expensive than gas models) it often makes sense to install both systems, since solar thermal is more efficient at heating water.

At the risk of sounding like a salesman, the Lantern is baffled that so few homeowners have jumped on the solar bandwagon. While the systems aren't cost-efficient (PDF) without government incentives, those tax breaks and subsidies are massive enough to make your solar unit pay off. Twenty-two states offer some kind of tax incentive. New York for example, will pay 25 percent of the cost of your system and exempt it from the sales tax. The federal government is offering to pay 30 percent. That's free money to buy something that's going to save you even more in the coming years. Yet fewer than 1 percent of homes in California, the most solar-powered state, have solar panels.

The Lantern spends a lot of time answering your questions, so here's one for you: What, exactly, are you waiting for?

The Lantern thanks Scott Carr of Standard Solar and Brian Seal and Donald Kintner Jr. of the Electric Power Research Institute.

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Brian Palmer is Slate's chief explainer. He also writes How and Why and Ecologic for the Washington Post. Email him at explainerbrian@gmail.com. Follow him on Twitter.