How Much Does It Cost to Install a Solar Water Heater?

If you find yourself wincing every time you receive your energy bills, installing a solar water heater could be well worth considering. While solar hot water systems cost more up front, switching to solar energy could reduce your utility costs by up to $280 (CAD 373) per year.

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Solar water heater installation is a costly project, so knowing what to expect can make budgeting easier.

What Is a Solar Water Heater?

Solar water heaters use energy from natural sunlight to heat water. There are two main types of solar hot water systems: passive systems and active systems.

Both system types have collectors that capture sunlight and a storage tank. Passive systems have a tank in the collector. The water absorbs heat from the sun and then flows into the pipes supplying your home with hot water. These systems work best in locations that rarely experience freezing temperatures.

Meanwhile, active systems either circulate water through the collectors or contain a heat transfer fluid. The fluid circulates through the collectors and then transfers to a heat exchanger, where it heats the water. Active systems are ideal for areas with colder winters.

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How Much Does a Solar Water Heater Cost?

According to HomeGuide, installing a solar water heater costs $3,000 to $9,000 (CAD 4,001 to CAD 12,002) on average, including the cost of the system itself and professional installation. Passive systems are the most affordable option at $1,000 to $3,700 (CAD 1,334 to CAD 4,934) for materials, while active systems typically cost between $2,300 and $6,000 (CAD 3,067 and CAD 8,001).

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What Factors Impact the Cost of a Solar Hot Water System?

Various factors impact the cost of solar water heating system installation. Understanding these factors can help you choose the best option for your budget.

Collector Size

Choosing the correct collector size for your hot water needs is essential. The larger the collectors, the higher the cost. On average, installing collectors for a four-person household costs $1,600 to $2,600 (CAD 2,134 to CAD 3,467). Small 4-foot-by-6-foot units cost between $800 and $1,050 (CAD 1,067 and CAD 1,400).

Tank Type and Size

The most affordable solar water heater storage tanks cost $1,000 to $1,700 (CAD 1,334 to CAD 2,267), while more advanced models with integrated heat exchangers cost $1,200 to $2,800 (CAD 1,600 to CAD 3,734).

The tank's capacity can also affect the cost. A 60- to 80-gallon container designed for a two-person household usually costs $800 to $1,500 (CAD 1,067 to CAD 2,000) for a basic unit or $1,200 to $2,300 (CAD 1,600 to CAD 3,067) with a heat exchanger. At the other end of the scale, an extra-large tank capable of holding up to 120 gallons of water costs $1,200 to $2,100 (CAD 1,600 to CAD 2,800) for the tank alone and $1,750 to $2,800 (CAD 2,334 to CAD 3,734) with a built-in heat exchanger.

Installation Incentives

Various rebates and incentives can help reduce the cost of solar water heater installation. You'll likely qualify for a 30% Renewable Energy Tax Credit if you install your system by 2033. Depending on your area and utility company, you may be eligible for additional incentives of up to $5,000 (CAD 6,668) off the cost of your system. Generally, claiming these incentives reduces the cost of installing a solar water heater to around $1,500 to $6,600 (CAD 2,000 to CAD 8,801).