According to Energy Star, a solar water heater can cut your water heating bill in half. This means you can save $190 annually if you combine solar with a backup gas-storage water heater instead of using the gas water heater alone. If you have an electric tank water heater for back-up, you'll save about $250 each year on electricity bills. Large families with greater hot water needs can save even more. In addition, the average life expectancy of qualified solar water heating systems is 20 years, much longer than standard gas or electric storage water heaters.
Unlike solar photovoltaic systems, solar water heating systems come in a wide variety of designs. There are choices among types of solar collectors, types of systems (active or passive), and which version of the type of system you choose, depending on your climate, hot water usage and property design. You should talk to several solar contractors about the different options they might recommend for your house before deciding on a solar water heating system.
Most solar water heaters require a well-insulated storage tank. Solar storage tanks have an additional outlet and inlet connected to and from the collector. Since solar water heating systems almost always require a backup system for cloudy days and times of increased demand, conventional storage water heaters usually provide backup and may already be part of the solar system package as a two-tank system or integrated one-tank system. Alternatively, a backup system may be provided as part of the solar collector on the rooftop or through a tankless water heater.