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Are Solar Water Heaters Worth It?

A solar water heater is a technology that uses sunlight to heat water, and it can do so by either literally absorbing heat and light from the sun’s rays and transferring that to the water directly (solar thermal), or it can generate electricity using solar panels to power an electric heater (photovoltaic).

The most common type of solar water heater technology is called solar thermal. Solar thermal systems in general have “thermal” in their title because they directly use heat from the sun to either heat water and any other fluid to achieve a goal.

Table of Contents

  1. Solar Thermal Water Heaters
  2. Financial Payback Time of Solar Water Heaters
  3. Solar Water Heater Information for those Living in Jamaica
  4. Do Solar Water Heaters Work At Night?

Solar Thermal Water Heater Technology

Solar thermal water heater technologies vary in design, but they all essentially do the same thing. They are designed to absorb sunlight as efficiently as possible, transfer heat from that sunlight into water, store the heated water in a tank, and of course keep the tank warm using insulation.

Financial Payback Time for Solar Water Heaters and Importance of Climate

The financial payback time of solar water heaters varies significantly with location due to the climate of the location it will be used in and the cost of electricity. In predominantly sunny climates such as Jamaica, for example, the average cost of a solar water heater including installation is in the low $100,000 JMD ($1,162 USD) range for an average family of 4, and there is no tax. The financial payback time in Jamaica is 1-2 years, but is usually a little more than 1 year, you will gain a better understanding of how to determine this below.

Solar water heaters may or may not come with backup electric heaters for prolonged cloudy weather.


The cost of electricity for many in Jamaica is equivalent to $39 JMD per kWh or $0.45 USD per kWh, which is extremely high compared to the United States average of $0.10 USD/kWh.

This means that it will take more than 4 times longer for the heater to pay for itself in the U.S, and I haven’t even factored in the climate difference between the two countries, yet.

If you are an average family and 33% of your electric bill is the cost of water heating, then you would multiply 0.33 by your electric bill and that would be your cost of water heating. For this calculation, we will assume that your electric bill is $20,000 JMD per month.

Monthly water heating cost = 0.33 x 20,000 = $6,600 JMD.

Annual water heating cost = monthly cost x 12 which is: 6,600 x 12 = $79,200 JMD.

Assuming that the solar water heater costs $105,000 JMD, you would divide that by the annual cost of water heater to determine the payback time in years.

Payback time in years = 105,000 / 79,200 = 1.32 years.

Return on investment after 5 years = 79,200 x 3.68 (number of years that there is a net return on investment in the 5 year period) = $291,456 JMD. I multiplied 79,200 by 3.68 instead of 5 because the heater would not provide any net return on investment until 1.32 years of usage.

Importance of Weather to Solar Water Heaters

Due to the fact that solar water heaters obtained their heat from sunlight, the amount of sunlight available affects how much they heat up, therefore, weather is important to them. In predominantly sunny climates, they provide hot water most of the time, in predominantly cloudy climates, a design that harvests sunlight more efficiently is helpful.

In any climate, however, backup electric heating elements ensure that no matter how cloudy the weather is, and for how long, there is always hot water. The worse the weather is, the more the heating element has to be used, and the more your electric bill is run up.

So, frankly: Weather affects the overall cost of hot water from the system more than anything else. The cost of hot water from the system is equal to the up front cost (including installation) + the cost of electricity consumed by the backup heating element.

In sunny countries with expensive electricity, solar water heaters pay for themselves quickest.

Do Solar Water Heaters Work At Night?

Yes, they do. They store water in insulated tanks. The heater collects solar radiation, and the insulation keeps the water hot all night (I learned this from a personal experience using one of these heaters).

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