Solar Hot Water System Prices & Usage Costs

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More and more Australians are making an effort to reduce their energy bills, but many of us still struggle. We all know we could save power by switching off lights and installing energy-efficient appliances, but have you ever considered just how much energy your hot water system is using?

In fact, around 25 per cent of the average household’s energy usage is attributable to water heating, costing households hundreds of dollars every year. There are plenty of ‘efficient’ hot water systems on the market that promise bill savings, however, none are as cheap to run as solar hot water systems. So, what are solar hot water systems? What do they cost to purchase and run, and how much can you save? Canstar Blue answers these questions and more in this article.

What is a solar hot water system?

Solar hot water systems utilise energy from the sun to heat water for your home. Solar hot water systems are capable of providing anywhere from 40 to 90 per cent of your home’s hot water needs and are particularly effective in warm climates. However, since you can’t always count on the sun to shine, most solar hot water systems come with electric or gas boosters to ensure your home has enough hot water.

How does a solar hot water system work?

When it comes to solar hot water systems there are two different ways in which they work; either actively or passively. Active solar hot water systems use circulating pumps to keep the water heated as a it pumps through the system, whereas passive systems rely on heated pipes to keep the water heated as it moves through your home.

With an active system, it will either use the sunlight stored by the solar collector panel or a heat exchanger to heat the water as it’s moving through the system. Thanks to the circulating pump, an active system is able to keep the water heated during its motion, making it more reliable than an passive system, which has to store, collect and heat the water in the tank unit before moving. Since there is no pump in a passive system, these units are often coupled together, using thermosyphon technology to both collect the solar power and heat the water in the same place.

Passive systems are generally cheaper than an active system, but an active system is generally more dependable in cooler climates as passive systems are more susceptible to freezing. Active systems mostly come as a split unit – meaning the panel and water tank are two separate standing machines – whereas passive systems will generally be coupled. In Australia, the most common solar hot water system is an active system.

Active solar hot water systems also come with either an electric or gas booster to help power the system on cloudy days.

Types of solar hot water systems

Flat-plate collector HWS

There are three main types of solar hot water systems – flat-plate collectors, evacuated tube collectors and heat pump systems.

  • Flat-plate collectors: This system uses a large solar panel–like collector to catch the sun’s rays and transfer the heat to an insulated hot water tank. Flat-plate collectors tend to be the more affordable solar hot water option, however, they are not terribly effective in cooler climates. There are two variants of these systems – roof mounted – where the tank is connected to the collector on the roof, and split – where the panel is installed on the roof while the tank is on the ground.
  • Evacuated tube collectors: These work similarly to flat-plate collector hot water systems. The difference is that this model collects sunlight using a series of glass tubes that have a vacuum seal. This allows for the efficient transferral of solar energy. As such, evacuated tube collector hot water systems are widely considered to be the most effective, however they are also the most expensive.
  • Heat Pump systems: Unlike the other solar hot water systems which collect sunlight, heat pump solar systems draw solar heat from the air and use this to heat water. Heat pump solar systems do use some electricity to pump in hot air, but this is a fairly negligible amount.

Best Solar Hot Water Systems

Below is a list of some of the best hot water system brands as per the survey findings in our latest rating report. Our annual surveys only ask customers who have bought a hot water system recently. These are some of the current brands from that list who offer solar hot water systems in Australia:

Best Solar Hot Water Split Systems

Brand Litre Capacity Weather Protection Booster Available Collector Panel Type
Solahart Streamline 270L, 320L, 410L Anti-frost protection Electric or Gas Flat
Chromagen SplitLine 200L, 300L, 400L Closed loop option available for harsher climates 200L Gas only, Electric or Gas for 300L, 400L Flat or Evacuated Tube
Dux Ecosmart 250L, 315L, 400L Temperature sensors to avoid over-heating Electric or Gas Flat
Rinnai Prestige 165L, 185L Built-in cyclone frame Electric or Gas Flat or Evacuated Tube
Thermann 250L, 315L, 400L Built-in cyclone frame Electric or Gas Evacuated Tube
Rheem Loline 160L, 270, 325L, 410L Frost protection Electric, Gas & Solar Gas Flat
Aquamax Solar 165L, 260L, 325L, 415L N/A 165L Gas only, Electric or Gas for 260L, 325L, 415L Flat

Best Solar Hot Water Coupled Systems

Brand Litre Capacity Weather Protection Booster Available
Chromagen RoofLine 200L, 300L N/A 200L Gas only, Electric or Gas for 300L
Rinnai Prestige 180L, 330L Built-in cyclone frame Electric or Gas
Rheem Hiline 180L, 300L Frost Protection Electric or Gas

Solar hot water system prices

A solar hot water system costs between $3,000 and $7,000 fully installed. Prices vary depending on the type of system and installation costs:

  • Flat plate collectors: Prices start at $3,000 and usually don’t exceed $4,500.
  • Evacuated tub collectors: Prices are usually upwards of $6,000.
  • Heat pumps: These are comparatively affordable, costing between $3,000 and $4,000.

In addition, solar hot water systems with gas boosters can cost around $500 to $1,000 more compared with their electric-booster counterparts. Further, split systems are more expensive than roof-mounted hot water storage tanks.

For comparison, non-solar hot water systems generally cost anything from $300 to $2,000.

  • Electric storage: $500 – $1,000
  • Gas storage: $700 – $1,800
  • Electric instantaneous: $500 – $1,400
  • Gas instantaneous: $300 – $2,000

What are the advantages of getting a solar hot water system?

Solar hot water explained

As solar hot water systems rely on energy from the sun, some of the advantages include being less reliant on the electricity grid, reducing your carbon footprint and greenhouse gas emissions, and of course, saving money in the long-term on your electricity bill.  Solar hot water systems also require less maintenance and servicing than a regular hot water system, with servicing generally only needed once every five years. It’s best to read the safety certificates before purchasing your system though for an accurate servicing schedule.

Additionally, Small-scale Technology Certificates (STC’s) are also available for solar and heat pump installations across all states in Australia. These are similar to solar feed-in tariffs, in that customers who install solar pumps are eligible to receive financial incentives for their use of clean and renewable energy.

Different STC’s are applicable to the different climate zones in Australia. Climate zones and an STC calculator can be found on the Australian Government’s Clean Energy Regulator website.

Solar hot water system usage costs – will it save me money?

While solar hot water systems are expensive to purchase, they are much cheaper to run than gas or electric storage hot water systems. The exact amount it costs to run a hot water system varies wildly depending on your location, climate and energy tariff. With that said, an average household with a solar hot water system and moderate weather should save at least a 50 per cent to 75 per cent on their water heating bill compared to a storage hot water system.

Electric storage vs solar hot water case study:

A typical Australian household with an electric storage hot water system consumes 20kWh of electricity each day. About a quarter of this daily usage (5kWh) is attributable to water heating. The below costs illustrate the expected annual cost of an electric storage hot water system versus a solar hot water system with electric boosters. The calculations also assume a controlled load tariff with a usage rate of 19c/kWh. The ‘sunny’ calculation assumes that solar meets 75% of a household’s hot water needs every day for one year, while the ‘cloudy’ calculation assumes solar only meets 50% of the household’s needs.


Annual hot water electricity usage:

Electric storage Solar hot water system (Sunny) Solar hot water system (Cloudy)
$346.75 $86.69 $173.38

*Prices are illustrative only and may not be reflective your home’s electricity usage.


You can see in our example that an average household could save hundreds of dollars every year with solar hot water, and depending on your water usage habits and the climate, you could stand to save even more. Remember than hot water systems are quite hardy and often come with long warranty periods, so there’s plenty of time to make a return on your investment.

If you live in a warm and dry area, then installing solar hot water should be a no-brainer – while solar is more expensive upfront, the energy savings should see you make your money back in no time. However, the decision to install solar hot water is a little trickier for those in some of the colder areas in Australia’s southern states.

Most households in cooler climates should still be able to make their money back over the long-term with a solar hot water system, but if you’re on the fence about it, then you should get a personalised quote to ensure that you’re making the best choice for your budget.

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Image credit: Andrea Danti/

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