The Economics of Solar Water Heating

Domestic solar water heaters are considered one of the most cost-effective forms of renewable energy in numerous parts of the world. If you’re wondering whether a solar water heating system is feasible in the long run and what size should it be, you will need to look at the following factors:

 

1. Solar Radiation

This is the amount of sunlight that falls on your solar panels. Solar radiation depends mainly on your geographic location. The more sunlight there is, the more money you can save. 

 

2. The Initial Cost of The System 

A larger system will produce more heat, but it will also incur higher installation costs.

 

3. System Efficiency

There are different types of solar collectors available, each with its own level of efficiency. For example, flat plate solar collectors are commonly used in domestic water heating installations, while evacuated tube collectors are more expensive and typically used in larger commercial applications due to their higher efficiency.

 

4. Energy Cost

The cost of fuel or electricity should be considered. A higher cost means a shorter payback. Always remember to factor in future expected increases in fuel or electricity prices.

 

5. Solar Contribution

It’s important to consider the solar contribution, which is the amount of heating load that comes from solar energy. To make the most of the generated heat from solar energy, you must ensure that all the heated water is used. Investing in a large solar water heating system without utilizing the heated water will lead to unnecessary losses.

 

Therefore, it is recommended that the solar heating system covers the energy load required to heat water during the less cold months. In colder months, a secondary heater can be used. This way you avoid underutilizing the solar system during the less cold months.

 

6. Demand

Determine the number of people who will be using the system and their average daily hot water requirement. Take into account the average temperature of the inlet water and the desired water temperature, as a bigger system is required for a larger difference between the two temperatures.

There are additional factors often underestimated by individuals that can impact both the cost and efficiency of a solar water heating system. This includes:

 

  • Losses in pipelines and storage tanks
  • Annual maintenance costs and the possibility of increased servicing expenses
  • If you are taking a loan to install the system, consider the loan size, loan period, and borrowing interest rate.