How Much Does a Solar Water Heater Cost?

Ginny Bartolone
Written by Ginny Bartolone
Updated January 11, 2022
A solar water heater installed on a roof
AlSimonov/iStock / Getty Images Plus via Getty Images

Solar water heating systems cost an average of $1,600 to $5,200 depending on the style, size, and installation of your design

Get quotes from up to 3 pros!
Enter a zip below and get matched to top-rated pros near you.

As we all work to cut down on our carbon footprint, the enticing perks of a solar water heater system are plentiful. We're talking about saving between 50% and 80% off your utility bills each month, federal and state tax exemptions, and even rebates from your local electric company. The average cost to install a solar water heater—with labor and parts included—runs an average of $3,400, making this a heftier investment than the cost of a traditional system.

How Much Does a Solar Water Heater Cost by Size?

Much like a standard hot water heater, the size of your system comes down to how much warm water you use on a regular basis. Are there multiple teenagers in your house taking several showers a day? Or is it just two of you sharing one bathroom?

The more people and water sources in your home, the larger each part of your system will be. The major parts include:

  • Solar collectors (aka solar panels) to collect the sun's energy

  • Tank to collect the hot water

  • Plumbing to connect the system to your home

The style of the collector has a lot to do with your final price tag as well, but we'll go more into this later.

The Cost of Parts and Labor

Overall, the basic parts for your solar water heater system cost between $1,000 to $4,000. Add an extra $1,000 to $2,500 for additional plumbing, backup heaters, or switches to control the system. The number of solar panels also plays a role, costing between $800 to $1,500 each.

Lastly, you'll need to calculate labor costs—a significant chunk of the estimate. The average hourly rate for installing a solar water heater is $70 an hour. While most installations take a couple of days, the number of hours depends on:

  • The size of your system

  • The size of your home

  • Sunshine levels and temperatures in your region

  • Placement of your solar collectors (it takes more time to install them on a roof)

  • If you need to heat a pool

When you meet with a solar heating specialist, they'll likely make some basic calculations to determine the size of your tank and the number of solar panels necessary. Overall, you can expect the following price ranges for each size tank.

50-Gallon Capacity Tank

Costing an average of $2,000 for labor and parts, two people can comfortably enjoy a 50-gallon tank paired with a 40-square-foot collector.

80-Gallon Capacity Tank

This size is ideal for a family of three or four people, links to about a 60-square-foot collector, and costs around $3,000.

120-Gallon Capacity Tank

Large families of five or six require a larger tank and up to 80 square feet of collection panels. This system runs around $4,000.

Are There Solar Water Heater Rebates Available?

Always take the initial installation cost of a renewable energy system with a grain of salt. Federal and state tax incentives can significantly offset what you'll spend on installation.

For example, EnergyStar states that homeowners who installed a solar water heater system before the end of 2019 received a 30% tax credit. Between 2020 and 2022, you'll still get a 26% rebate, with the number going down over time.

You can then dive into your state and utility company's rebates to push the price down further. For one, homeowners in New York can deduct 25% of the cost of materials and installation. Utility companies across the country also offer direct rebates after upgrading your system.

What Type of Solar Water Heater Can I Get on My Budget?

While solar energy can pay for itself over several years, it's important to budget for the upfront investment. You can keep initial costs low by opting for a smaller tank, a passive system, or working with a professional who can find the ideal placement for your panels. Let's look at a few price ranges.

$1,000 to $2,000

Expect this price range if you live in a smaller home without constant hot water demand. A 50-gallon tank falls into this range, especially if you choose a passive system or live in an area that requires fewer solar collectors.

$2,000 to $3,000

Most solar water heater installations fall within or just above this range. Consider an active system with a small or midsize tank. 

$3,000+

Plan for an 80 or 120-gallon tank once you spend more than $3,000. You'll get into the higher price range if your home requires larger solar panels, a direct active system, or complex plumbing.

How Much Does It Cost to Install a Solar Water Heater Yourself?

A luxurious shower head running water
grandriver/iStock / Getty Images Plus via Getty Images

A solar batch water system—also known as integral collector storage (ICS)—can, technically, qualify as a DIY project. Some homeowners have had success pairing this very basic system with a conventional tank for under $1,000. The process involves placing a batch collector in an insulated box in a spot that gets plenty of direct sunlight during the day.

However, not all states allow homeowners to install a hot water system without a permit and professional license. As a passive system without a backup heater, the DIY option is also not ideal in any area with freezing temperatures or constant cloud cover.

In other words, we recommend working with a pro to ensure a safe, legal, and effective solar heating system.

Solar Water Heater Cost Breakdown

If you're prepping your home for a water heating system overhaul, expect the following costs from your local contractor:

  • Solar collectors

  • Collector tank

  • Additional plumbing

  • Switches and hardware

  • Labor

  • Permits

  • Removal of the old system

How Much Does Solar Water Heater Installation Cost by Type?

You'll spot a large difference between two main categories of solar water heater systems: passive and active. Not only do they have different price tags, but they also function best in different regions of the country.

Passive Systems

Integrated-collectors and what's known as a thermosyphon system run between $1,000 and $3,000 before the cost of labor. Without a backup heater, passive systems depend on the sun's heat and often include complex plumbing to sort the cold and hot water.

While they do cost less upfront than the active options, they are also both heavier and less dependable in cold areas.

Active Systems

Even with higher upfront costs, active systems are far more common in homes looking for a long-term, sustainable water heating method. The two systems—known as direct and indirect—cost between $2,000 and $4,000 on average

Direct systems work best in warm areas while indirect systems include the use of antifreeze and a heat exchanger to handle the winter months. These hookups also come with electric or gas backup generators, cutting out the possibility of an ice-cold shower on a cloudy day.

What Factors Influence the Cost to Install a Solar Water Heater?

Professional water heater specialists will tailor each system to your home, its direct sunlight, and how much water you use on a regular basis. 

These costs will come down to:

  • Where you live (tax incentives, cost of labor, material prices)

  • Local weather (sunlight and freezing temperatures)

  • Weight-bearing capacity of your roof

  • Placement of your solar panels

  • Type and size of your system

FAQs About Solar Water Heater Costs

Switching to solar energy may seem a bit daunting at first, but the environmental and financial payoffs are catching the eyes of more homeowners each year. Here are some common questions about the process.

How do I choose the right solar system for my home?

Solar water heating systems are not one-size-fits-all. You'll likely work with a team of experts to get the job done—including solar panel installers, plumbers, and water heater installers. A specialist will help you decide if a passive or active system is best for your local weather, home layout, roof stability, and your budget.

How long does a solar water heater last?

Expect your solar water heater system to last around 20 years, if not more. Much like a standard water heater, expect ongoing maintenance and inspection costs as well. Energy.gov offers tips on how to protect your panels from weathering as well as maintaining your pipes.

Why should I choose a solar water heater?

Not only do solar water heaters cut down your carbon footprint, but they can also pay for themselves in just three to six years. Between lower utility bills and tax incentives, the system can be more sustainable than a standard heater.

Do solar water heaters work without the sun?

If you live in a cloudy or cool area, your hot water installer may recommend an active heater with a backup power source. Passive systems store water for cloudy days as well, but may run out after a long break in sunshine.

Need professional help with your project?
Get quotes from top-rated pros.