Using solar for hot water? Here’s what you need to know

There are big savings to be had with a solar hot water system. Here’s an overview of different types for your home.

Your Home
The average Aussie house uses around 25% of its energy consumption* to heat water. By switching to a solar hot water system, you could save significantly on your energy usage costs each year.

But making that switch can feel like a big decision considering the dollars you’ll be putting up upfront. So what’s involved? Where are those dollars best spent?

There are two main categories of solar hot water system to choose from: collector based systems and heat pump systems.

1. Collector based systems

These are the systems you see installed on people’s roofs. They absorb the sun’s rays and transfer the heat straight to your hot water. Depending on where you live and how efficient your panels are, you can expect to get upwards of 50% of your hot water from them. For the grey days, you’ll need a decent insulated tank or an electric or gas back up. If you are feeling brave, you might prefer having a cold shower.

Flat plate collectors are the most common type for this system. They are usually about 1-1.5 metre wide and 2-2.5 metre long and are amazingly tough for such a simple design.

Evacuated tube collectors vary in design and are more fragile. They are generally more expensive but perform better in colder climates than flat plate collectors.

Suburban neighbourhood rooftops with solar panels

Either way, for a four-person house, you are likely to need a couple of panels and at least a 300-litre tank (yes, you still need a tank). The tank can be located at ground level or up on the roof with the panels, depending on the type of system chosen.

2. Heat pump systems

Heat pump systems don’t use the silver panels (collectors) we usually associate with solar power. Rather than light, they pull heat out of the air to increase the water temperature, working a bit like a reverse-cycle air conditioner or fridge. They do need electricity to function but still use much less power to heat your water than a conventional electric water heater.

Pump systems are made up of a compressor and a tank. They need to be installed outside where it’s well ventilated. Using a booster function, they can still deliver hot water even on the chilliest day but will work more efficiently on milder days.

Choice recommends a 270-315 litre tank for a four-person household.

So which type of solar hot water system should you get? With the variations in cost and functionality, it can be hard to know where to start. Here are four key factors you should consider:

Upfront cost

Choice prices collector systems at $3000 to $7000 and heat pump systems at $2500 to $4000, both fully installed. If the initial cost is your main concern then that might answer your dilemma right there.

Happy to consider the long-term advantage? Then installing a solar hot water system if you live in a dry, sunny climate is a no brainer.

Yes, it’s expensive upfront but it’s likely you’ll quickly make that money back in savings. If you live in a less predictably sunny region, it’s worth spending time on your calculations. Your energy provider and solar supplier will help you run the numbers.


A panel-based system is likely to be more efficient in areas that get plenty of sunshine because light is what they feed on. A north-facing roof with no shade is going to be even better.

If grey and rainy days are the norm for your region, then you could be better off with a pump system that doesn’t need light to do its job. Bear in mind that a compressor can be noisy so spare a thought for your neighbours.


Installing panels is quite a process so if you’re looking for a quick fix when your old system finally dies, this won’t be it.

Access, roof size, stability and strength, as well as council and strata restrictions, are all going to come into play. This is not a weekend DIY job – leave it to the experts.

Rebates and incentives

Federal support via small-scale technology certificates (STCs) offset the cost of installing solar and was key in driving Australia’s solar boom. But the number of STCs awarded has decreased. For example, before 2019 a 5.3kW solar panel system installed in Darwin attracted 105 STCs. Now, it only attracts 97 STCs. This number will reduce to zero by 2030.

The states and territories supply various forms of support for solar installation so it’s worth checking out what’s on offer when you’re making your decision.

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*Source: Canstar Blue