Accounting for Solar Water Heater Investments

We have said it before – solar domestic water heating is dead. Heating water for household use in Florida sounds like a good idea, but is it really? To know for sure, you have to have an accounting system. In the world of energy, we call this a monitoring system.

While solar pool heating may be the most economical use of solar power in Florida, heating water for use in the home is no longer advisable in most cases, particularly as you go further south. Unless you have a large household or are a very heavy user of hot water, an investment in solar water heating may never pay off. Water coming out of the ground in Florida is already relatively warm, and the cost to heat it is minimal.

In this article, we are going to explore how much water heating really costs you, and why it is so important to account for where your energy goes. But first, a little history…

Solar Water Heating Made Sense In The Past

Years ago it made more sense to install a solar water heater. This was primarily due to generous incentives from the State and utility companies, paired with a Federal Tax Credit. Now incentives are gone or going away. But there are several reasons that the investment has become less attractive:

  • State and Utility rebates are gone and not coming back.
  • Solar electricity has dropped in price so dramatically since 2010, making it a more attractive option.
  • Electric water heaters now have more efficient options available.
  • Solar water heaters have increased in price due to copper prices and other market forces.
  • Fewer and fewer solar contractors offer the product, driving up prices.
  • Utility electricity rates (per kilowatt-hour) have remained quite low in Florida.

In short, there are better investment alternatives now, like using solar electricity to offset electric heating costs, or installing a heat pump water heater. Both of these options offer a shorter return on investment and yield other advantages.

Accounting For Water Heating Costs

Think about how much hot water you really use. Most households in Florida have relatively few people in them. A couple of showers a day, some laundry, and kitchen use doesn’t account for much water use. Many homes have 80-gallon water heaters, and newer homes have 50-gallon water heaters due to building code oddities. Regardless of tank size, the electric element uses basically the same amount of energy. For argument’s sake, let’s say you use a tank-full of hot water each day. And let’s assume it takes an hour for that amount of water to be heated to the desired temperature.

1 hour per day X 4 kilowatts X 11 cents per kilowatt hour X 30 days per month = $13.20 per month

Now your water heater also has to keep water hot even if you are not using it. Many water heaters are located in garages, where it is warm, or even HOT in Florida. It doesn’t take much energy to keep water hot. But for argument’s sake again, let’s just roughly double the figure above and assume water heating costs $25 per month.

A solar water heater costs upwards of $5,000. Assuming you receive a tax credit, you might end up paying about $3,750 net cost. At $25 per month savings, your payback period is 150 months, or 12.5 years. That’s not a great investment on a product that is typically only warranted for 10 years, and it doesn’t account for maintenance costs.

Proving How Much Water Heating Costs

A Sense Energy Monitor installed in an electric panel

Sense Energy Monitor

All of this back of the napkin math is just conjecture. To truly manage energy use and make sound investment decisions we need an accounting system – a monitoring system for energy use. One such energy monitor is from the company Sense. A small device gets installed in your electric panel and measures energy use. The device’s software “learns” the energy signature of your home’s devices and appliances over time, eventually giving you a complete picture of where your energy is used.

We tracked the water heating use of a typical household of two people who consider themselves heavy users of hot water. As active people, they take showers often and take their time. They do laundry at home and are avid cooks, doing lots of dishwashing. Their 80-gallon water heater is located in a garage.

The results are clear – Sense estimates their water heating annual costs at just $200, or about $17 per month. Finally, we have an accounting system that shows how much it truly costs to heat water!


Water Heating does not cost much in Florida
Sense not only shows how much power a device is using instantaneously, but shows how long it runs and what the total electricity use costs over time.


Sense displays current power usage as intuitive bubbles to help visualize relative energy use by each major appliance and device.


Viewing the energy used for an appliance on a daily basis helps you understand when you used electricity. You can drill down into a day and see minute-by-minute usage. This chart of the water heater shows some heavier usage days that were determined to be laundry days.


Drilling down into the power consumption chart shows each time the water heater turned on and how long it ran. This chart has infinite zoom levels that can be changed with a simple pinch on a mobile device.
Drilling down into the power consumption chart shows each time the water heater turned on and how long it ran. This chart has infinite zoom levels that can be changed with a simple pinch on a mobile device.


The device timeline shows a textual history of an appliance’s on and off times.


The real-time power chart pinpoints when each device turns on and shows instantaneous total power use. In this picture, we see exactly when the coffee maker turned on. The water heater was on at this time also due to an early morning shower.

Proof Is A Wonderful Thing

Proving exactly how energy is used allows people to make intelligent decisions. Is it time to replace your refrigerator, air conditioner, or other appliance? How much is leaving the TV on all day really costing you? Does your well pump for your sprinkler system consume a lot of energy? These are questions that are best answered by measuring the actual energy use.

While the analysis above is just one anecdote, we have found the same result to be largely typical. Unless we are proven wrong, we will advise clients strongly against a solar water heating investment. The nice thing about solar electricity is we can easily prove how much it saves you. Every solar electricity system we install comes with a monitoring system that records solar production over time, proving how much utility electricity you are offsetting. That’s one reason we advise clients to use solar electricity rather than solar water heating.

Even with a monitor, you can’t really tell how much a solar water heater is saving you. Proving a negative is a hard thing to do. An energy monitor will tell you how much energy your backup heating element is using, but it won’t tell you how much utility electricity you are not using. Measuring solar hot water production would be expensive and difficult, involving the calculation of temperature rise and flow rate. Economical monitors for this do not exist.

When Is Solar Water Heating A Good Investment

For some larger households, water heating could be a substantial cost. If you heat your water with gas, that could be another reason to consider solar water heating, since gas heating can be expensive, but a better choice might be an instant-on gas heater if you have natural gas piped to your home. But it isn’t wise to invest in a solar water heater without knowing exactly how much hot water you are using.

Unfortunately, that is not something you can determine instantly. You will need to gather data. An investment in an energy monitor will give you the answer, and will likely yield other useful information to help you manage your energy use. An energy monitor can pay for itself from the knowledge you gain. And it can help you avoid the costly mistake of purchasing a solar water heater you may not need. At a small fraction of the cost of a solar water heater, an energy monitor is your best investment.

We are pleased to offer the Sense energy monitor for your home. As a licensed electrical contractor, we can install one safely and show you how to use it to best manage your energy use.

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