UPDATED on December 4, 2016 with PV system production data for the first year of system operation.
Compared to a photovoltaic system, a solar hot water system yields very little energy per dollar invested. I presented that argument in a 2012 article called “Solar Thermal Is Dead.” Two years later, in 2014, an economic comparison between these two solar technologies showed a stronger tilt than ever before in favor of PV, leading me to write a follow-up article called “Solar Thermal Is Really, Really Dead.”
According to the latest available (2009) data from the Residential Energy Consumption Survey (RECS), the average U.S. household’s energy expenditure for domestic hot water is $280 per year. Since a solar hot water system can be expected to provide about 63% of a home’s hot water — the rest being produced by a backup system during cloudy weather — it’s hard for a solar hot water system to save more than $176 per year (about $15 per month). If the solar hot water system costs $9,000 — a reasonable assumption — the investment in solar equipment will yield only 2% per year. That’s less than the current yield on a U.S. 10-year bond.
This analysis overstates the actual yield of an investment in a solar thermal system, however, for several reasons. First, this analysis ignores a solar thermal system’s ongoing maintenance costs; and second, when a U.S. bond matures, you still have your capital — whereas when a solar thermal system wears out, it’s headed to the landfill or scrap heap.
High repair costs
A third article on solar thermal systems — Solar Hot Water System Maintenance Costs — discussed the trials and tribulations experienced by my brother Peter and his wife Elana in Massachusetts. Over the past…