Install a hybrid water heater and a standard solar array instead of solar thermal water heating.

Solar panels 01

All the Facts:

Solar thermal used to be an idea that had merit. It was expensive to install and maintain, but it did reduce fossil fuel usage for water heating. Solar thermal never saved money when compared to fossil fuel water heating. While saving money is not important for the global warming true believer for whom money is not an issue, cost is important for the rest of us. Honestly, most of us know global warming is real, and important, but there are very few people with unlimited funds. Now that photovoltaic (PV) panels provide the same heating at a fraction of the cost, we should all embrace the less expensive, clean technology. The extra money we would have spent on a solar thermal system, can be redirected to other projects that reduce our green house gas emissions, for instance, your next several electric car payments.

The data for this article. Starts with a couple of excellent pieces comparing PV to solar thermal published on Green Building Advisor. The first piece from 2012, found that solar thermal was about twice as expensive as a PV system paired with a heat pump water heater (also referred to as a hybrid water heater) when considering climate in Boston or Madison, Wisconsin. The second piece, “Solar Thermal is Really, Really Dead“, found similar conclusions but, in addition, it found that standard electric resistance hot water heater paired with PV also was far more economical (about 25% cheaper) than solar thermal. That was in December of 2014. As a caveat to his article, Mr. Holladay said that there might be different conditions in other, warmer geographies that might make solar thermal more appealing.

So, I thought I would take the next step, and run the numbers for a location in the U.S. where one would come as close to 100% heating from solar thermal as possible and where one would not have to worry about using glycol to transmit the heat. Water will suffice in non-freeze locations. I picked Tucson, Arizona since it is located in a desert and can occasionally be hot even in the winter. Here are the assumed numbers (unless otherwise noted, all numbers used for calculations will be the same as in Mr. Holladay’s article)

  1. Solar Thermal Pricing: $9,000
  2. Solar Fraction: 0.80 (the highest advertised SF of any system in the Tucson area)
  3. Daily Water Usage: 44 gallons
  4. Annual Water Usage: 16,060 gallons
  5. Average residential PV array cost: $3.50/watt (national average q4 2015)
  6. Energy that a resistance heater uses per gallon of hot water: 0.21 kWh/gal
  7. Energy that a heat pump water heater uses per gallon of hot water: 0.07 kWh/gal
  8. PV Array size for 80% of annual water usage (resistance): 1.54 kW (PV Watts calculations)
  9. PV Array size for 80% of annual water usage (hpwh): 0.51 kW (PV Watts calculations)

Note: Much lower PV installed costs ($2.99/watt) are becoming more common every day.

This is the breakdown for system costs:

The results for Tucson overwhelming favor of PV over solar thermal for residential water heating. It would appear that warm southern U.S. climates are no different than snowy northern U.S. climates in the debate over the best low emissions way to provide water heating. Some points of interest to note from the calculations above. First, if solar is an option for a home, then most homes will likely put in the biggest array possible to provide the highest percentage energy needs for the home (car, water heater, space heater and AC, etc.) That means the majority of a PV system’s cost is already baked into the cost of the home energy system. The chart above assumes that the additional kW needed to produce the PV hot water would be at the same cost per watt as the system as a whole. That would not be the case since the inverter, permits and utility tie in fees, would not increase. Only the panel cost and a small amount of additional wiring, racking, and labor would be needed.  According the the below chart from GTM research, the PV module cost is approximately $0.60 of the $3.50 installation cost. Let’s double that just to be safe to account for the some profit for the installer. So that means closer to $1.20 for the additional couple solar panels needed solely for the water heating.

2015 Q4 residential solar costs

So, if one were to use $1.20 for the additional kW of PV instead of the $3.50 used in the first chart, the cost differences would be even more stark. The second point favors solar thermal. In a climate such as Tucson, the solar thermal system would likely only use one collector instead of two in the priced system. According to SEIA, the pricing for a solar thermal systems ranges from $6,000 to $9,000. A system located in Tucson would likely be at the low end of pricing. That said, even at $6,000, the solar thermal system is not price competitive. Let’s use both of the assumptions noted here to run a second cost benefit analysis ($1.20 per kW for PV and $6,000 solar thermal system)

Solar Thermal Table 02-2

Conclusion: Solar thermal while once a good idea, no longer is the most cost effective way to eliminate emissions when heating water. Solar thermal costs anywhere from 35-50% more than a water heating system that makes use of a PV solar array regardless of location in the U.S.

Here are some other factors when weighing the pros and cons of PV or solar thermal water heating.

  1. Solar thermal maintenance costs are higher than a PV system
  2. PV arrays generate electricity. Excess electricity can be used to power anything electric.
  3. Solar thermal generates water heat. Solar thermal systems dump any extra heat.
  4. Payback times for a solar thermal systems are at a minimum 38 years… if no maintenance is required… and one assumes the excess money spent would not generate interest had it been invested elsewhere.

For me, the decision favoring PV is simple based on the numbers, but if you still prefer solar thermal for one reason or another, do it. Solar thermal will decrease your emissions when compared to buying electricity from the grid, at least for several more years, and decreasing emissions (and having fun) is what this site is all about!