Question

For a home for 4 people, what size solar hot water system would you need? Estimate cost and payback time

Answer 1

The rule of thumb for storage tank size is based on an average of 20 gallons of hot water per person per day

We can estimate the required size as follows

1-2 people need a 40-gallon water heater

2-3 people need a 60-gallon water heater

3-4 people need a 80 gallon water heater

5 or more people need a 80-120 gallon water heater

To heat enough hot water to keep a 3-4 person household happy will need about 3,000kWh of electricity per year. Or about 8kWh per day.

Option 1) use solar water heater to heat water directly

solar hot water system will typically cut your water-heating energy bills by 70-80%.

The price of a suitable solar hot water system is about $4,000 installed.

Payback : The payback for this option depends on what you are replacing with the solar hot water heater.

1) Replacing an electric heater on regular tariff

If you are replacing a conventional electric hot water system, expect savings of about $700 per year if your heater is on the same tariff as the rest of your appliances . Payback will be about 5 years (assuming 7% electricity price inflation).

2) Replacing electric heater on an off load tariff

If you are lucky enough to have access to off peak electricity for water heating, then this drops to about $250 per year in savings. And therefore payback stretches out to 10 years (assuming 7% electricity price inflation).

3) Replacing A gas water heater

A typical home with a gas water heater uses about 14,000MJ of gas per year to heat their water. This is about $420 worth of gas. Saving 80% of this is worth $336 per year. But… gas prices will to go through the roof over the next couple of years for these reasons. I expect residential gas prices to double. So you could well be looking at savings closer to $700 per year with if replacing a gas heater with solar hot water. This would give a 5-6 year payback.

Option 2: Use solar PV to generate the electricity to heat the water.

To reduce your water heating energy using only solar PV, you are obviously going to need to install solar PV panels instead of a solar hot water system. Combine those PV panels with a timer that only allows water heating during the day and you can make the same savings with a 2kW solar PV system.

The going rate for a good 2kW solar system is about $4,000 installed. Same as the hot water heater. So the paybacks are exactly the same as the ones I went through for Option 1 above.