Comparing the Cost of Renewable and Non-Renewable Water Heating

You are here

If you look at the cost of installing an electric heater and compare it to a solar thermal system, you may wonder why you would bother with the latter. A solar water heater can cost more than five times the price of an electric setup, though rebates and government schemes can reduce that by almost half. However, the initial installation costs don't take your annual savings into account... and that's where solar heaters come into their own.

If you prefer to consider the cost of investment from the point of view of your monthly cash flow, you should take a look at this article .

Over the entire lifespan of a heating system, there is a variety of costs to consider: the initial setup, annual maintenance, the cost of grid-connected energy and the rate of inflation on non-renewable energy prices. That last item is especially important at the moment: we've reached peak production of both oil and gas, so prices are going to rise sharply as demand continues to increase. It's not unusual to see a 10% annual increase in gas and oil prices, though that can vary enormously and will probably be higher as demand outstrips supply.

Let's look at an example calculation to compare gas, electric and solar water heating. We'll ignore the extra equity on your home from installing the system, we'll assume a stable annual inflation rate on both gas and electricity and we'll also assume the systems are paid for outright. Taking out a small loan to install a solar thermal system is not unusual and won't add too much to the price, especially when you consider the long-term benefits.

Cost comparison of renewable and non-renewable water heating systems

As you can see, the biggest advantage of installing solar thermal is that there are no operating costs. You don't have to buy electricity or gas to get your hot water, so every single drop that comes out of the faucet is another saving. Admittedly, recouping the initial installation cost takes some time – usually about 10 years or so, depending on the system size and your particular situation – but after that point, you're generating profit.

Over the entire life of the system, which is 30-40 years if the equipment is maintained properly, you could save hundreds of thousands of dollars. Not bad for a five-figure initial investment!