Financial factors of solar water heating
There are two financial factors to consider when deciding whether to install a solar water heating system: cost savings and cost outlay.
Savings associated with solar water heating
How much a household can save using solar water heating is really quite varied; each household is different. Some homeowners expect they will be able to pay back their systems from the savings made in approximately ten years. A lot depends on how much hot water is used and the cost of installation of the specific solar system in a particular house. For example, households that don’t use a lot of hot water and require a lot of work to install solar hot water are likely to find the time it takes to recoup the investment to be longer.
Even if it may take a number of years for a household to make back the cost of installation, there are other factors to consider that don't necessarily have to do with cost:
- There can be variances in prices - get quotes from a number of suppliers.
- Electricity prices will continue to increase, so your ongoing savings from solar hot water will grow in proportion. The price of electricity increased 7.5% in the year between 2007 and 2008, and 41% in the five years between 2003 and 2008 (Source: Ministry of Economic Development, 2008) and are predicted to continue to rise.
- Solar hot water systems have a life of 20-25 years or more and will go on producing savings well after you have covered the cost of the system from savings made on your power account.
- Often cylinders that are replaced by a new solar ready cylinder would need to be replaced sometime in the future anyway. If your cylinder needs to be replaced, this will increase your upfront cost, but better ensures a quality and high performing system.
- Installing solar hot water provides quality of life benefits such as being able to use more hot water that you generate yourself from the renewable energy of the sun without feeling guilty about paying for it.
- People installing solar hot water are contributing to the reduction in green house gases with each installation reducing CO2 emissions by an average of 1.26 tonnes of greenhouse gas emissions a year, compared to using a standard electric hot water tank. (Assuming an emission factor for water heating of 0.56 t CO2-e/MWh, - sourced from EECA)
- Installing solar hot water contributes to the local economy and to regional energy security by using a local renewable energy source. It also helps to delay or reduce the need for new power generation and the economic and environmental cost that this imposes.
Cost to install solar water heating
New solar water installations can cost as little as $5,200 for a one or two bedroom home to as much as $10,000 or more for a four bedroom home - it really depends on your home and what you need out of the system. The supplier(s) you contact can give you a thorough review and tell you how the factors associated with your home may affect the pricing.
In addition, where some local authorities can charge hundreds for consent fees, Nelson City Council doesn't charge anything for a solar water heating building consent.
Free building consent fees for solar hot water heating
To encourage the uptake of solar hot water heating systems, Council has introduced a zero fee policy for the building consent required to install a solar hot water heating system.