How Much Can you Save with a Solar Water Heater?

September 2, 2023

solar panel on a residential roof with blue sky and clouds in background

*Updated April 7th, 2025

If you’re like most homeowners, you’ve probably noticed that water bills can really add up. In fact, they make up more than 15% of the average household’s monthly utility costs! With such a big chunk of your budget going to hot water, it’s no surprise that more and more people are looking for ways to save. That’s where solar water heaters come in.

Solar water heaters are becoming a popular choice for homeowners who want to cut costs and be a little kinder to the planet. Instead of relying solely on electricity or gas to heat your water, these systems harness solar energy to do the heavy lifting. Essentially, they use the sun’s power to preheat your water before it even reaches your conventional heater, reducing energy consumption and lowering your carbon footprint.

But just how much can you actually save by making the switch to a solar water heater? In this article, we’ll break down the potential savings, factors that influence costs, and whether going solar for your hot water is worth the investment.

The Savings of a Solar Water Heater

It sounds crazy, but a solar water heater can reduce your energy bills by more than 50 percent. The exact savings depend on how much water you use, the availability of the solar resource (your location), and the system’s performance. Many water heater companies and even utility companies offer incentives and financing options that make solar water heaters even more affordable. Whether you save on installation, equipment, or you receive a financial incentive from your energy company, it increases your overall savings.

When you determine your savings, look at the total cost of the solar water heater. On average, homeowners pay $3,500, but they can go up as high as $5,000 or more. When determining how much you’ll save, figure out your solar  heater  payback period or the time needed to pay back the purchase and installation costs. Once you pay back the  cost of the heater and installation, you reap the savings, which is like getting free hot water, thanks to the sun’s energy.

How Long Does a Solar Water Heater Last?

One of the great things about solar water heaters is their impressive lifespan. While traditional gas and electric water heaters usually last around 8 to 10 years, a well-maintained solar water heater can keep working efficiently for up to 20 years—or sometimes even longer! That means less hassle and fewer replacements in the long run, which is a big plus if you’re looking to make a smart investment.

But how do you figure out if a solar water heater is worth the cost? It’s all about balancing the upfront investment with your long-term savings. Here are a few things to consider when calculating your payback period and potential savings:

  • Your Hot Water Usage Per Month: The more hot water you use, the more you’ll benefit from the savings. Families who take a lot of showers, run the dishwasher frequently, or do tons of laundry will likely see bigger benefits.

  • The Cost to Refuel Your Water Heater: Find out from your local utility company how much you’re currently spending on gas or electricity to heat your water. This will give you a good idea of how much you could save with solar.

  • The Unit’s Efficiency: Not all solar water heaters are created equal. Higher-efficiency models will save you more money over time, so it’s worth investing in a quality system that’s built to last.

  • Nighttime Water Usage: Solar heaters depend on sunlight, so if you’re using a lot of hot water at night, you may still need to rely on your traditional water heater or grid power. Consider your evening and nighttime routines to see how much this might impact your savings.

  • Expected Life Expectancy of the Unit: Knowing how long your solar water heater is likely to last can help you calculate the total savings over its lifespan. Since solar systems can last twice as long as conventional heaters, your long-term savings can really add up.

By taking these factors into account, you’ll get a clearer picture of whether a solar water heater makes sense for your home. Plus, with proper maintenance, you can extend the life of your system even further.

Are Solar Water Heaters Worth the Investment?

Whether a solar heater is worth it for you depends on many factors. For example, if most of your water usage is at nighttime, you won’t gain much from the solar water heater and your payback period will be much longer. If, on the other hand, most of your hot water usage is during the daytime and you’ll save 50 percent or more on your utility bills, you can quickly recoup the cost of the heater, making the purchase well worth it.

Price the equipment based on the size and needs of your household and talk to your utility company about the savings you’ll earn. You may be surprised at how much energy you’ll save over just a few short years. If you plan on staying in your home for the long-term, a solar water heater can be a great investment.

Conclusion

Switching to a solar water heater can be a smart move both for your wallet and the environment. While the upfront cost might seem a bit daunting, the long-term savings on your utility bills make it well worth the investment. Plus, with the potential for tax credits and reduced energy consumption, you’re not just saving money—you’re also doing your part for the planet. Take the time to weigh your hot water usage, local energy costs, and the efficiency of the system you choose. With the right setup, a solar water heater can pay for itself over time and keep your household running efficiently.

FAQs

Do solar water heaters work at night or on cloudy days?

Most solar water heaters have a backup system (like electric or gas) to ensure you have hot water during cloudy weather or nighttime. The solar system preheats the water, reducing the energy needed from conventional sources.

Is maintenance expensive for solar water heaters?

Maintenance costs are generally low. Regularly cleaning the solar collectors and checking for leaks are the most common tasks. A professional check-up every few years helps keep the system efficient.

Can I install a solar water heater myself?

While some DIY kits are available, it’s best to hire a professional to ensure proper installation and maximize efficiency. Incorrect installation can lead to leaks and reduced performance.

Additional Solar Resources