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 , 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…
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