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Install a solar hot water system


Solar can be the most energy efficient means of heating water and there are several types of solar hot water systems. A solar hot water system will provide 65 to 80 per cent of your hot water free of charge*.

A solar hot water system may cost 2 - 3 times more than a conventional system but can pay back the additional cost through energy savings within about 5 - 8 years.

The first thing to do is check how much sunny roof space you have where you could install flat solar panels or evacuated tubes. Whilst it is unlikely you can generate enough solar to heat water for your whole building you may still be able to make a significant contribution.

A solar hot water system has three parts to it, and you can choose different options for each part.

1. Sun collectors – panels or tubes 

Solar hot water systems use solar collectors, which absorb energy from the sun to heat water. Solar collectors can be either flat solar panels or evacuated tubes.

Flat solar panels:

  • May require a special anti-freeze fluid for climates prone to frost or snow
  • Are generally less expensive than evacuated tube systems

Evacuated tubes:

  • Can be more efficient than flat panels in cold climates
  • Are lightweight and can be easily installed on the roof
  • Individual tubes can be replaced if damaged
  • Are generally more expensive than flat plate panels

2. The water storage tank 

The heated water is then stored in an insulated tank until needed, either:

  • On the roof
  • In the roof space or a rooftop plant room
  • At ground level

Storage tanks are made from stainless steel, copper or mild steel coated with vitreous enamel.

  • Copper-lined tanks are only suitable for low-pressure systems
  • The other tanks are suitable for mains pressure
  • Vitreous enamel tanks are fitted with a ‘sacrificial anode’ that needs to be replaced every few years to protect against corrosion (more frequently where water quality is poor)

3. The boosters – gas or electric 

Solar hot water systems cannot supply all the hot water for an apartment building, especially on cloudy days or at night. A booster is used to heat the water to the required temperature when needed. Solar hot water systems come with either electric or gas boosters.

  • The booster unit will turn on when the water temperature falls below the thermostat setting and will turn off automatically when water reaches the required temperature
  • Boosters can also be installed with a manual override switch-on timer to give the you more control over boosting times
  • Gas boosting is cheaper to run and should be used in preference to electric boosting where available
  • If you already have a gas or electric storage hot water system that is in good condition then a cheaper option is to add solar to your existing system


Solar hot water systems cost more to buy and install than other types but the extra cost will be recovered through energy savings within 5 - 8 years. Solar systems are expected to have a 15 to 20 year lifespan so this is a worthwhile investment.

Funding – discounts for solar and heat pump systems 

Installing a solar hot water system can also entitle you to Small-scale Technology Certificates (STCs) thanks to the Small-scale Renewable Energy Scheme. The Small-scale Renewable Energy Scheme offers a financial incentive for owners to install solar water heaters, heat pumps and solar panel systems.

Get an idea of the approximate discount you could receive. Here are the estimations of discounts taken in 2013**:

  • SA $780
  • QLD $630
  • ACT $780
  • NT $630
  • TAS $780
  • VIC $780
  • WA $780
  • NSW $780

**Based on an STC price of $30 each, the above rebates would apply.

* In the state of New South Wales