According to the Australian Government’s Your Home, hot water usage constitutes over 25% of a household’s energy consumption. If your household consumes a lot of hot water and you are looking for an energy efficient way to heat water, a solar hot water system may be the solution. Below, we have compiled information to provide the basics of solar hot water systems. If you are considering installing a system at home, it’s important to conduct your own research and discuss your needs with a certified provider.


What is a solar hot water system?

A solar hot water system is a setup of components working seamlessly to absorb solar energy (sunlight) and convert it into heat energy for domestic water heating. The system consists of solar collectors, a heat exchanger, a storage tank, and a circulation system. Solar collectors, such as solar panels, absorb sunlight and convert it into heat energy. The heat exchanger transfers this collected solar heat to the water in the system and the circulation system moves water between the collectors and the storage tank, storing the heated water, ready for use in your home.


What are the different types of solar hot water systems?

Two common types of solar hot water systems are the rooftop thermosiphon system and the split solar hot water system.


Rooftop thermosiphon hot water system



Rooftop thermosiphon systems rely on the process of hot water rising and cold water falling in the solar collectors and water storage tank. The tank is strategically located above the solar collectors to utilise the thermosiphon effect, which is the natural circulation or flow of fluid that, when heated, becomes less dense and rises, while the cooler, denser fluid sinks.

As solar energy is absorbed by the solar collectors from their optimal position on the rooftop, the thermal energy is transferred into the water heating it up. The heated water decreases in density, allowing it to rise through the pipes into the system, creating a flow into the storage tank. Simultaneously, the cool pipe transfers cold water along the opposite side, ending up in the solar collector. This natural thermosiphon effect eliminates the need for pumps or additional power sources, contributing to the system’s simplicity and cost-effectiveness.

The efficiency of rooftop thermosiphon systems is contingent on proper installation. They require careful orientation and placement on the rooftop to ensure optimal exposure to sunlight. Although they can resist extreme weather conditions, a few minor precautions need to be taken to prevent freezing. For example, the use of insulation in the tank can aid in conserving heat and preventing freeze-over.


Split solar hot water system



Split solar hot water systems provide more flexibility in installation and greater control over the heating process. Similar to the rooftop thermosiphon systems, they consist of solar collectors, a storage tank, and a circulation system. The key difference lies in the placement of the storage tank, typically positioned at ground level. Split solar systems are a viable option if you prefer not to have the storage tank on your roof. They are also well-suited for smaller homes with limited roofing space that can only fit the solar collectors on top.

The split system requires a pump to actively circulate the heated water between the collectors and the storage tank. While this provides flexibility for additional boosting choices such as instant gas or a heat pump, it introduces a dependence on electricity since the pump operates with electric assistance. The electric pump is a minor addition to the system’s operation, as the primary source of energy comes from the collection of heat by solar collectors.


System booster

A system booster is a device or component that enhances the overall system performance by optimising solar energy collection, transfer, and utilisation.
Common system boosters include heat pumps, and gas or electric backup heaters, which can supplement hot water supply on overcast or rainy days. The specific components used as system boosters may vary depending on the design and requirements of the solar hot water system in question.


What do I need to consider before installing a solar hot water system?


Initial cost

On average, solar hot water systems range from $4,000 to $8,000 fully installed. Thermosiphon systems with electric boosters tend to be more affordable than split systems and those with gas boosters.
Costs involved can include:

  • System cost (solar collectors, water tank, pump)
  • Inspection and installation
  • Potential upgrades to your existing plumbing system
  • Future maintenance

Hot water usage

Evaluate your household hot water needs and usage in the laundry, kitchen, and bathroom, considering the number of people in your home. The higher the usage, the greater value you could get from installing a solar hot water system. It can also determine how many solar collectors you might need to install. Higher usage may require more solar collectors, especially in colder climates.


Council approval

Check with your local council to see if you need approvals before installing solar collectors on your roof. Also, check with your local council if a system booster is required.


System type

Consider how much space you have on your roof to determine if you need a roof-mounted or split system. Also consider if your roof can support the weight of a water tank. If you need a split system, ask your provider about connecting the system to your existing tank.

Sun exposure and surrounding space

Properly orienting the solar collectors for maximum sunlight exposure is crucial for system efficiency. Examine the area around your roof to determine how much sunlight you get throughout the day and ensure there isn’t any shade, obtrusive objects, or other buildings that could impact solar energy collection. If the panels can’t be installed in the ideal location, more panels may be required to reach maximum efficiency.


How are solar hot water systems energy efficient?



According to the Australian Government’s Your Home, solar hot water systems can supply up to 90% of a home’s hot water. At the core of their energy efficiency is the ability to harness solar energy, which is abundant and renewable.

Solar technology minimises the need for conventional energy sources like electricity or gas for water heating, providing an environmentally friendly alternative to conventional methods. By reducing reliance on electricity for water heating, you contribute to reducing your home’s environmental impact. Additionally, incorporating boosters powered by solar PV systems can further enhance energy efficiency.


Other benefits of hot water systems include:



Low operating costs and maintenance requirements
While the initial installation cost might be higher, the long-term savings on energy bills make solar hot water systems a cost-effective investment. Once installed, these systems can operate efficiently with minimum intervention. Regular check-ups and occasional maintenance will ensure optimal, cost-effective performance.

• Government incentives and rebates
Various Australian states and territories offer incentives and rebates for energy efficient hot water systems. It’s important to note that eligibility criteria and the availability of incentives can vary based on factors such as the type of hot water system installed, its efficiency rating, and the location of the property.
Examples include the Solar Homes Program in Victoria or the NSW Energy Savings Scheme (ESS). The Australian Government’s Small-scale Renewable Energy Scheme (SRES) offers Small-scale Technology Certificates (STCs) for eligible solar hot water installations. This works as a discount on your system dependant on the postcode zone you live in. For information on how to obtain an STC please read the Clean Energy Regulator’s Creating small-scale technology certificates.

• Consistent performance in various climates
Contrary to misconceptions, solar water systems are designed to operate effectively in a range of climates. Insulations and advances in technology, such as anti-freeze measures, ensure that these systems can function even in cooler temperatures. Their ability to provide consistent performance in diverse weather conditions make solar water systems a reliable choice for homeowners globally.


You may be eligible for a Green Home Loan

By making your home more energy efficient and reducing its impact on the environment, you may qualify for a Green Home Loan. The Gateway Green Home Loan rewards members who want to adopt a more sustainable lifestyle with a discounted interest rate. Apply online today or speak to our member services team to find out more.