Is a Solar Thermal System Worth the Investment?

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The bottom line with any renewable energy solution is, of course, whether it's worth the investment. Since solar thermal systems don't generate electricity and will never be a single solution for a net-zero or net-positive home, are they worth the money?

The simple answer is, as always, "it depends". Your particular location and circumstances will always determine whether any given option is suitable so you should look for a local expert with whom you can discuss options and possibilities.

However, as a general guideline, solar thermal systems are appropriate if you can place a collector in a spot which gets direct sunlight from 9:00 a.m. to 3:00 p.m. every day the sun shines. And as long as you don't want to use that location for PV panels.

The next question is the return on investment (ROI). Solar thermal systems won't pay for themselves in months, no matter where you live. You're looking at an average period of between 7 and 10 years before you recoup your money, though the period varies enormously depending on system size, location, water use and so on.

In general, you'll get better ROI:

  • With a bigger system (as long as it's used efficiently)
  • In areas where grid-supplied gas for hot water is expensive
  • If you use more water in the afternoon and early evening
  • If you live somewhere hot and sunny
  • If you mount your collectors facing true south (which you should always do)

Even with all the information available here, your particular circumstances will affect the returns in a variety of ways. Is gas expensive where you are? Are there special rebates for switching to a solar setup? Are you building from scratch rather than replacing an existing system? Are you opting for a basic passive system with an open loop? There are so many factors that it's worth talking to a professional to look at your choices.

As a simple rule of thumb, a home with an average system in California can expect a solar thermal system to supply about 70% of its hot water needs. That same home can expect the system to be a break-even proposition most often, with the main return on investment being a reduction in greenhouse gases (a ton or two per year), though changes in hot water usage habits and regular maintenance can improve the outlook. Inevitable future increases in gas prices should also improve the return rate.

There are other ways to implement solar thermal systems, as well: embedding tubes into a hard deck (either in the yard or on a garage roof, for example) still capitalizes on the sun's energy but doesn't use up valuable PV panel space. The energy can be used to augment the house's existing systems by pre-heating water on its way to the tank or by supplying a pool.