What You Need to Know About Solar Water Heating

Solar Water Heating Puts Sunlight to Work for You

1. Solar Collectors; 2. Solar Storage Tank; 3. Conventional Water Heater; 4. Plentiful Hot Water

Is solar water heating right for my home?

The average household uses 64 gallons of hot water per day for activities like cleaning dishes, washing clothes and taking showers or baths. Every home that uses hot water can save with solar water heating. This is especially true when there are more people in the household or for larger homes that use a substantial amount of hot water. Solar water heating uses a free, natural resource—the sun—which reduces greenhouse gas emissions and helps the environment for the benefit of future generations.

How much does solar water heating cost and how much will I save?

Purchasing a solar water heating system is an investment—the cost is usually more upfront (approximately $9,000-$10,000) but the savings in the long run can be substantial and will offset the cost over its lifetime. On average, if you install a solar water heater, the portion of your PG&E bill that is for heating water is reduced by 50-80 percent.

The cost of the system and how much you save depend on several factors including the following:

  • The amount of hot water your household uses
  • The type and size of the solar water heating system
  • Your geographic location and ability to capture the sun
  • The price of natural gas

To get a better sense of costs and savings, a local contractor can help you assess your hot water needs, design a system, and calculate your rebate and tax credit, as well as help determine financing options.

Are there any incentives available?

  • Yes. The California Solar Initiative (CSI) Thermal program through PG&E provides up to $4,366* to homeowners who install a solar water heating system.** The incentive amount is based on the expected performance of the system—how much natural gas (therms) you'll save. The more water you heat with the sun, the bigger your rebate. Your contractor is usually responsible for determining the incentive amount and submitting the rebate application.
  • You may also qualify for a 30 percent federal tax credit for the installed cost of the system. Consult your personal tax advisor to find out more information.
  • Additionally, there are many ways to help finance the installation of a solar water heating system, including commercial bank and credit union loans, Property Assessed Clean Energy (PACE) and other third-party financing options such as Power Purchase Agreements (PPAs).

*Final rebate amount will be based on the estimated savings as calculated by your contractor.
**Must currently heat water with a natural gas water heater. Customers who heat their water with electricity or propane are not eligible.

What else do I need to consider?

  • Before installing solar water heating, you can drive down the size and cost of the system by first reducing the overall hot water consumption of your home through energy-efficiency upgrades and measures like installing high-efficiency washers and dishwashers and low-flow showers and toilets.
  • You must also ensure your home’s roof is in relatively good shape or consider replacing it at the same time you install the solar water heating system. There should also be adequate roof space exposed to the sun and space for a separate solar storage tank near your existing water heater.
  • Solar water heating systems are reliable and can last up to 20-25 years. In addition, if installed properly, they require very little maintenance to keep them running smoothly.

How do I find a qualified contractor?

The first step is to use our contractor search tool to find a licensed contractor. PG&E recommends getting at least two to three estimates to compare costs, system types and savings from different contractors. There is no obligation and you can take advantage of PG&E’s free Solar Water Heating Informational Kit (PDF, 3.8 MB) to help you make an informed decision. You should also verify the contractor has an active A, B, C-10 or C-46 license by checking the Contractors' State License Board (CSLB) website. Lastly, be sure to ask about experience and check references before signing the contract.

  • Smart AC
  • Demand Response
  • California Solar Initiative