April 11, 2014
Buying a solar water heater makes sense at first. You pay more upfront but can cut your water heating bills by 50-80%.
But are those energy savings enough? Do they justify that high upfront cost of solar water heaters?
Let’s do the math.
First, let’s start with the cost of a solar water heater. With installation, a solar water heater costs between $3,935 (<80-gallon tank) to $9,654 (>120-gallon tank). The average cost is $6,766 (80-gallon tank).
To put things in perspective, an 80-gallon tank heats enough water for a family of 5, according to FPL.
Please keep in mind that cost depends on many other factors. We suggest you get an estimate for a water heater that fits your family’s needs.
Once you get a solar water heater cost estimate, start subtracting incentives from it.
Assuming you get an ENERGY STAR qualified solar water heater, your biggest price cut will be from the 30% federal tax credit. (This offer expires in 2016.)
Rebates differ for each energy company:
For simplicity’s sake, let’s go with FPL’s rebate.
Now let’s look at how much you’ll save over its lifetime.
Since Florida is so sunny throughout the year, the solar water heater rarely depends on its backup heating tank. So, it’s efficient at saving you money.
According to Florida Solar Energy Center, a family of 4 using a solar water heater with a backup element could save $200-$300 a year in lower water heating costs.
A solar water heater lives about 20 years. So, the family of four could save $4,000 to $6,000 over the solar water heater’s lifetime.
$7000 to purchase & install solar water heater (average cost, rounded up)
-$2100 (30% federal tax credit)
-$1000 (FPL rebate)
-$4000 (low end of energy savings)
That means the solar water heater pays for itself over its lifetime (and saves you another $100).
But wait! There’s more! An electric or gas water heater only lives about 10 years. So, a solar water heater could also save you the amount it would cost to buy a whole new water heater!
Now you know a solar water heater is worth it (especially in Florida). But the upfront cost can still be a barrier. That’s why many professional installers can give you affordable financing options to help you out.