Does it make sense to have a solar hot water heater if I have solar panels?

Even though they may share the same first name, solar hot water heaters and solar panel electricity systems are very different. While they work independently, customers frequently ask if it makes sense to have a solar hot water heater if you already have solar panels installed on your home or business. Let’s take a look!

Solar Panel Solar System

Our site contains more detailed information, but a quick, simple explanation is that a solar system converts energy from the sun to grid-quality electricity. Your home or business will use what it needs, and through a billing arrangement called net metering, will send excess electricity to the grid. The utility keeps track of that, so when night comes or less sunny days, you have stored credits you can use. 

A solar system is pretty much install-and-forget. There is very little maintenance and the parts are simple.

Solar Hot Water Heaters

In our Maryland climate, the most common solar hot water heaters are indirect circulation, and active solar water heating systems. The system uses pumps to circulate a non-freezing fluid through solar collectors to heat up and then through a heat exchanger to transfer the heat to the water tank.

For the best side-by-side comparison, we’ll assume that we’re comparing a solar hot water heater to a traditional electric-powered hot water heater. While that makes comparison easier, different power sources such as gas have similar efficiency expectations.

For both solar panels and solar hot water heaters, the primary production period is in the sunny summer months. Many homeowners turn down their hot water heater in the summer months as demand isn’t nearly as high. For a solar hot water heater, your best producing months are the very months you need it the least.

Solar Panels vs Solar Hot Water Heaters

Let’s take a look at some of the side-by-side comparisons of several attributes.
Solar Panel Solar System Solar Hot Water Heaters
Excess Energy 100% of excess energy captured through net metering and credited back. All excess energy is lost.
Maintenance Very little. It will last 25 to 30 years with little or no maintenance. Many physically moving parts that require maintenance. Properly maintained should last 20 years.
Warranty Typical 10- to 12-year equipment warranty with a typical 25-year performance warranty. Typically, 2 years for the pump, 6 years for the tank, and 10 years for collectors.
Investment Only about five solar panels are needed to offset water heater’s 2,250-3,000 kWh’s/year Typically offsets 2,250-3,000 kWh’s/year. That’s typically 2  to 3 times the cost of the equivalent solar panels.


In summary, each system is a great way to save money and help the planet. The financial advantages of a traditional solar panel electric system outshine the advantages of a solar hot water heater. If your solar system is not capturing enough electricity to cover the electric hot water heater, then the most cost-effective path is to expand your system, or if out of space, upgrade to a higher efficiency panel.