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Solar Hot Water Systems in Australia: Types of Systems, Cost, and Installation

House with solar hot water system

Solar hot water systems are a way to use solar energy to heat water for residential use. These renewable energy systems are more energy efficient, reduce greenhouse gas emissions, and reduce the cost of energy bills. Currently, there are over one million Australian households benefiting from solar hot water. If you want to find out more about solar hot water and how you can be one of the millions of households enjoying free (or almost free) water heating, continue reading below.

What is a solar hot water system? How do solar hot water systems work?

Solar hot water systems utilize the heat of the sun to heat water for residential use. The basic premise of solar hot water systems is relatively simple. Cold water is sent up from a water tank to solar collectors on the roof, which convert solar radiation into thermal energy, heating the water as it travels through the collectors. Once the water is heated, it’s sent back into the water tank to be used for showers, cooking, laundry, or whatever else you might need.

Types of solar hot water systems

 Flat plate collectors: Flat plate collectors are made up of copper pipes that run through a dark absorber covered in glass. Water travels through these tubes, heating up as it goes, before being sent back to the tank as hot water. There are two types of flat plate collectors; roof mounted, where the tank is attached to your roof alongside the collectors, and split-mounted where the collectors are on the roof but the tank is on the ground.

 Evacuated tubes: Evacuated tubes are made up of glass tubes with copper pipes running through the centre. The space between the glass tubes forms a vacuum to prevent heat loss. As the copper heats up from the sun, the heat is then transferred to the water which gets sent back to the water tank to be used. The use of the vacuum-sealed tubes allows for the most efficient transfer of solar energy, but are also the most expensive of solar hot water systems.

 Heat pump systems: While other solar hot water systems collect sunlight, heat pump solar hot water systems draw heat from the air and use this to heat your water. These solar hot water systems do use a small amount of electricity, but a negligible amount compared to traditional hot water systems.

 Boosted hot water systems: In case of cloudy days, boosted hot water systems can make sure your water is continuously hot, no matter the weather. These hot water systems can check to make sure your hot water is hot enough, and if it isn’t use gas or electricity to boost the temperature of the water. Today, most solar hot water systems come with an electricity or gas booster.

Retrofitting solar hot water systems

If your current electric or gas hot water system is still working smoothly, and still has a long life left, there are solar hot water retrofit kits available. These kits can turn your home into a gas or electric boosted solar hot water system, utilizing your current hot water system to reduce your electricity or gas consumption and greenhouse gas emissions without the cost or hassle of a completely new system.

How much can I save on my energy bills with a solar hot water system?

Water heating alone accounts for around 25% of the average Australian household’s energy usage. If your annual energy bill is $1,200, that’s $300 a year just on hot water! If you live in a warm climate, switching to a solar hot water system could deliver anywhere from 40% to 90% of your water-heating needs from the sun alone thereby reducing the cost of your hot water.

Solar hot water system price in Australia

Depending on the type of solar hot water system you choose, you could be looking at anywhere from $3,000 to $7,000 upfront for a new system with installation. While these are an investment, solar hot water systems are made to last 20 years or more, and will easily pay for themselves within that timeframe with what you save by no longer relying on electricity or gas to heat your household’s water.

Hot water system price
Type of hot water system Average min. price Average max. price
Solar – Roof Mounted (electric boost) $3600 $4800
Solar – Split System (electric boost) $3900 $6000+
Solar – Split System (gas boost) $4900 $6800+
Heat Pump $3300 (160 L) $4600 (315 L)
Electric – Storage $450 (25 L) $1900 (400 L)
Electric – Instant $660 $1400
Gas – Storage $850 (135 L) $1700 (360 L)
Gas – Instant $750 $1800

Source: Australian Hot Water

It’s important to remember that additional costs, such as installation, repositioning your hot water system, or switching energy types can increase how much you pay upfront for a new system, no matter if it’s solar, electric, or gas.

How to install a solar hot water system

If you want to install a solar hot water system onto your property, it’s important to find an accredited installer. Not only will it ensure your solar hot water system is properly installed, but many of the solar hot water rebates are only available if the system is installed by an accredited installer. However, the process for installing a solar hot water system is relatively the same no matter what:

  1. Mount the solar collectors on the roof
  2. Install water storage tank and heat exchanger
  3. Install pipes to transfer fluid
  4. Install water transport pipes
  5. Install the controls system
  6. Insulate the entire system

Solar hot water system rebates

Solar hot water systems can be expensive upfront, even with the potential savings once installed. Thankfully, there are a couple solar hot water rebates to help reduce the cost of purchasing and installing a new solar hot water system, including federal Small-scale Technology Certificates and the Victorian solar heat pump rebate.

Small-scale Technology Certificates

While there are many rebates for solar panels and solar batteries, there are fewer rebates for solar hot water systems. No matter where you live in Australia, you are eligible for the Small-scale Technology Certificate Scheme, a federal incentive to assist residential households with the cost of small-scale (under 100kWh) renewable technologies. Households receive a set number of these certificates (STCs), which are calculated based on the size of the hot water system, the number of years until the STC scheme is phased out, and the solar zone where the hot water system is installed.

With these small-scale certificates, it is most common for the residential solar hot water system customer to assign them to the installer in exchange for a point-of-sale discount. However, you can also sell these STCs to buyers through an open market at a negotiable price, or through the STC Clearing House at approximately $40 per certificate.

Victoria solar rebate for hot water and solar heat pumps

The Victorian government is the only state to offer a solar rebate specifically for solar hot water systems. If you’re a Victorian resident, you could get up to $1,000 to go towards the purchase and installation of a solar heat pump or hot water system. In order to be eligible for the Victorian solar hot water rebate you must:

  • Be the owner-occupier of the property
  • Have a combined income of under $180,000 annually
  • Install the heat pump on a property valued at under $3 million
  • Not have already received another solar rebate through the Victorian Solar Homes program
  • Have an existing hot water system that is at least three years old from the date of purchase
  • Purchase a solar heat pump from the list of approved products

If you’re interested in applying for the Victorian solar hot water system rebate, your first step is to get a quote from a Clean Energy Council authorised solar installer, and make sure to advise them that you will be applying for the rebate.

Common problems with solar hot water systems

It’s important to keep up with regular maintenance of your solar hot water system, in order for it to run efficiently and remain operational for many years to come. Sometimes, however, issues may arise. You can find a list of the most common problems with solar hot water systems, and ways to fix them, here. It’s important to remember that if you’re having problems with your hot water system, it’s best to leave it to be fixed by a professional.

Common problems with solar hot water systems*
Problem Solution
My solar hot water system is not producing hot water Ensure the panels are correctly positioned to receive the most sunlight, and that they are clean and free from debris. You can also check the thermostat to make sure it’s set correctly, and ensure the sensor wires are connected properly.
My solar hot water system is making weird noises Check to be sure there is no sediment debris or deposits in the pump. You can also check the bearing and apply lubricant if necessary. If these don’t fix the issue, you might need to replace the pump.
Fluid is leaking from my hot water system Check for any loose connections or broken pipes. Make sure the temperature or pressure valve is working correctly or replace it with a new one. You can also check that there is no broken glass from your collector, and adjust the thermostat to reduce pressure on the system.
My solar hot water heater stopped working If your system stops working, it’s probably due to a loose connection. Trace the wire to the loose connection, cut out the defective piece of cable, and reconnect the cables.
My solar panels are having problems If your panels are broken, you might need to replace the glass or the entire solar panel. Check to ensure the coating or absorber paint isn’t deteriorating and repaint if necessary. If condensation is collecting on the glass, create a small hole on the bottom of the panel.

*Always contact a certified and experienced solar panel installer for maintenance or repair. To repair your solar hot water system on your own is to do so at your own risk.

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