Solar hot water

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Solar hot water systems use solar collectors to absorb energy from the sun and heat water, which then flows to a storage tank. Typically, solar collectors are located on roofs and are best positioned facing north when installed in the Southern Hemisphere.

Solar hot water works well in buildings that have significant roof area on which to locate the solar collectors. A solar hot water system should provide between 40 and 60 percent of your hot water needs and can thus save between 40 and 60 percent of your energy costs (electricity or gas) for hot water.

On days where hot water usage is higher than usual, or on cloudy or rainy days, you may need additional heating to provide adequate hot water. Solar hot water systems are either electric- or gas-boosted. Gas-boosted systems are more expensive to buy than electric-boosted systems; generally, however, a system with a gas booster has better performance efficiency than electric-boosted water heating.

If you live in an area that experiences temperatures below 4°C, expansion of water and ice inside the solar collector can cause serious damage. Ask your installer about frost protection for your water heater.

Technical explanation

Solar collectors are made of materials that absorb heat from the sun very efficiently. Cold water travels through the collector, heating the water and returning it to the tank. Hot water floats to the top of the tank and colder water is taken from the bottom and returned to the solar collector. To assist with this circulation, some systems incorporate a small pump that is activated whenever there’s a sufficient temperature differential between the water in the collectors and that in the tank. When you use hot water, it is taken from the top of the tank where the water is hottest.

Types of solar collectors

Flat plate panels

Flat plate panels have been used for around 40 years and are commonly installed in Australia. They operate at maximum efficiency when the sun is directly overhead at midday, but are less efficient at other times of the day when the sun’s rays hit the panels at different angles. Flat plate panels are generally less expensive than evacuated tube systems.

Flat panel solar hot water
Figure 1: Flat-panel hot water system. Image from
Solahart Australia

Evacuated tube systems

Evacuated tube collectors use an array of glass tubes that insulate in a similar way to that of a Thermos flask, in which the heat energy is retained in the tube. This makes them more efficient at retaining heat throughout the day and when the sun is not directly overhead. Thus, they can be much more efficient than flat plate panels in some conditions, such as in cold climates.

Evacuated tubes
Figure 2: Evacuated tube system
Apricus Australia

Evacuated tube collector technology was invented in Australia in the late 1980s, and this type of collector has been fully commercialised in the past decade. Evacuated tube systems:

  • make more efficient use of the sun’s energy,
  • are lightweight, so can be installed easily on roofs,
  • can withstand very low temperatures without the need for an anti-freeze fluid,
  • are generally more expensive than flat plate panels, and
  • can have individual tubes replaced if damaged.

Key parameters when evaluating solar hot water systems

There are many different solar hot water heaters available. It is important to select the hot water system that best suits your needs, taking into consideration the volume required, climate, roof characteristics, water quality and available space.

Systems come in various combinations of solar collector technology, boosting systems, tank types and tank positioning. Carefully research your options and talk to several suppliers and installers to ensure you make an informed decision.

Solar hot water systems usually cost more to buy and install than other types of water heaters, but the extra up-front cost will be recovered over the life of the system through reduced energy bills. Solar hot water systems will recover their costs more quickly when using large volumes, in warmer parts of the country and on sites with plenty of access to sunlight.

Credits and incentives

The cost of installing a solar hot water system can be reduced significantly through generous government rebates. You could be eligible to receive small-scale technology certificates (STCs). An STC is a measure of renewable energy that can be traded for money or for a discount on the purchase price. Be sure to ask your agent or retailer if you are eligible to receive small-scale technology certificates for your solar water heater under the Small-scale Renewable Energy Scheme (SRES).

Eligible solar hot water systems and STCs

Check to see if the solar hot water system you wish to install is eligible for STCs.

Eligible systems are listed on the register of solar water heaters on the website of the Clean Energy Regulator at To be eligible, systems must be new. Additionally, small-scale technology certificates (STCs) must be created within 12 months of installation. If you choose to go through an agent, he or she will create the certificates on your behalf.

Agents registered with the Clean Energy Regulator will offer you a financial benefit (such as a discount off the invoice) for your STCs in exchange for the right to create and sell certificates.

You can determine the number of certificates for which your system is eligible by using the solar water heater calculator on the Clean Energy Regulator website at

Alternatively, ask your registered agent about the number of certificates for which your system is eligible and the price the agent is offering for each STC. The financial benefit is usually based on STC price at the time of the offer, as this fluctuates depending on supply or demand.

The Clean Energy Council publishes the small-scale technology spot price on its website; however, different traders may offer different prices depending on the buyer. You may wish to conduct an internet search for ‘STC price’ or ‘REC price’ to find other traders and prices.

Further information

Solar hot water in dairies

Australian Government Living Greener websiteProvides information on flat-pump hot water systems.

Clean Energy Council - Explanation of and information on clean energy sources.



Australian Government Clean Energy Regulator, 2013. Eligible solar water heaters. [Online]

Australian Government Clean Energy Regulator, 2013. Choosing your solar water heater/heat pump. [Online]

Australian Government Clean Energy Regulator, 2013. Solar water heater STC calculator. [Online]

Australian Government Department of Industry, n.d. Alternatives to electric water heaters. [Online]

Solahart Australia Pty Ltd, n.d. Solahart Australia. [Online]

This content was produced with assistance from Energetics



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