How much does a solar water heater save per year?

DOE puts a well-sited system at 50–80% of the water heating bill. At a 65% solar fraction and DOE’s medium draw pattern of 55 gallons of hot water a day, that is about $428 a year against a standard electric tank at the US average rate of 18.44¢/kWh. Against natural gas the saving is much smaller, because gas energy is cheap to start with.

How long does it take for a solar water heater to pay for itself?

DOE’s own worked example gives about 14.5 years against electricity and 15.3 years against natural gas, for a $4,000 system with a solar energy factor of 2.5. At today’s higher US average electricity price that shortens to roughly 9 years on a $4,000 system, and stretches to about 14 years on a $6,000 one. The 7–10 year figure often quoted assumed a 30% federal tax credit that no longer exists — §25D ended for property placed in service after 31 December 2025.

Are solar water heaters worth it in the US?

Only if you are staying put. Simple payback runs to well over a decade without the federal credit, which is a long time to be exposed to a pump or controller replacement on an active system. In a high-sunshine state, with a high electricity rate and a state or utility rebate, the case holds. Otherwise a heat pump water heater cuts a similar share of the same bill for $2,500–$6,000 installed per ENERGY STAR, works regardless of sunshine, and needs no roof.

Updated August 22, 2026

Solar Water Heater Cost

Q: What is the monthly cost to run a solar water heater?

With a 65% solar fraction the backup heater costs roughly $19/month for a household drawing 55 gallons a day, against about $55/month for a standard electric tank — a saving of about $36/month at 18.44¢/kWh. That is energy only; it excludes pump electricity on an active system and maintenance.

See how much a solar water heater saves per month versus electric and gas tank heaters. Free US savings calculator.

Ad Unit — leaderboard

A solar water heater with a 65% solar fraction costs roughly $19/month in backup energy for a household drawing 55 gallons of hot water a day — saving about $36/month, or $428/year, against a standard electric tank at 18.44¢/kWh. DOE’s own worked example puts payback at 14.5 years against electricity and 15.3 years against natural gas. There is no longer a federal tax credit to shorten that: the 30% §25D credit ended for property placed in service after 31 December 2025.

Solar Water Heater Savings Calculator

Backup Fuel Type

The conventional backup heater fuel type.

Household Size

Solar Fraction

Share of your hot water supplied by solar. DOE puts a well-sited system at 50–80% of the water heating bill.

Electricity Rate ($/kWh)US average 18.44¢/kWh — EIA, May 2026.

Ad Unit — responsive

Solar vs Electric vs Gas vs Heat Pump Water Heater

Feature	Solar WH (65%)	Electric Tank	Gas Tank	Heat Pump WH
Monthly cost (55 gal/day)	~$19	~$55	~$21	~$14
Annual cost	~$230	~$658	~$252	~$173
Efficiency	65% solar + UEF 0.92 backup	UEF 0.92	UEF 0.64	UEF 3.5
Lifespan	20+ yr	10–15 yr	10–15 yr	13 yr (ENERGY STAR)
Installed cost	$4,000 (DOE example)	—	—	$2,500–$6,000
Simple payback	14.5–15.3 yr (DOE)	—	—	~3 yr on incremental cost
Federal tax credit	None	None	None	None

Electricity 18.44¢/kWh (EIA Electric Power Monthly, Table 5.6.A, May 2026); natural gas $1.44/therm (EIA, winter average, November 2025 - March 2026 (US); December 2025 - February 2026 (by state)). 55 gallons of hot water a day — DOE’s medium-use draw pattern — heated from 58°F to 125°F. Solar assumes a 65% solar fraction with an electric backup tank. Efficiencies are Uniform Energy Factors, which include tank standby loss; the heat pump figure of 3.5 is our modelling assumption for a current ENERGY STAR unit in a warm space. Solar payback and the $4,000 system cost are DOE’s own worked example; heat pump installed cost, the $1,503 incremental cost the ~3 year payback is measured against, and the 13-year life are ENERGY STAR’s. Neither technology carries a federal tax credit any more: §25D (solar) and §25C (heat pumps) both ended for property placed in service after 31 December 2025.

Electric and gas tank installed costs are left blank rather than guessed.

Solar Water Heater Cost — Is It Worth It?

DOE puts a well-sited solar water heater at 50–80% of the water heating bill. At a 65% solar fraction and DOE’s medium draw pattern of 55 gallons a day, the backup heater costs about $19/month instead of about $55/month for a standard electric tank — a saving of roughly $428 a year at the US average rate of 18.44¢/kWh. In a low-sun state that fraction falls, and with it the saving.

Payback is the number to be careful about. DOE’s own worked example gives about 14.5 years against electricity and 15.3 years against natural gas, for a $4,000 system with a solar energy factor of 2.5. At today’s higher US average electricity price the same system repays faster — about 9 years on the saving above — but a $6,000 install stretches that back out to about 14 years. Either way this is a payback measured in well over a decade, not the 7 to 10 years often quoted, and it is close to or beyond the point where a first pump or controller replacement falls due on an active system.

There is no 30% federal tax credit for solar water heating in 2026. The §25D residential clean energy credit terminated for property placed in service after 31 December 2025, so every payback figure here is calculated without it. State and utility programs are unaffected and are worth checking before you commit.

In low-sunshine states like Washington or Maine the solar fraction falls and so does the saving, which pushes payback further out again. Compare solar against a heat pump water heater, which cuts a similar share of the same bill for a lower installed cost ($2,500–$6,000 per ENERGY STAR), works regardless of sunshine, and needs no roof.

Electricity 18.44¢/kWh — EIA Electric Power Monthly, Table 5.6.A, May 2026. Running costs model 55 gal/day heated from 58°F to 125°F with a UEF 0.92 electric backup tank; energy only, excluding pump power and maintenance.

Ad Unit — in-article

Solar Water Heater Cost — FAQs

Is Solar Right for You?

Choose Solar If...

You live in a high-sunshine state (AZ, CA, FL, TX)
You plan to stay in your home 15+ years — DOE puts simple payback at 14.5–15.3 years
Your electricity rate is above the US average of 18.44¢/kWh
Your state or utility offers a solar water heating rebate

Consider Alternatives If...

You live in a low-sunshine state (WA, OR, ME)
Your planned stay is under 15 years
You already have cheap gas, or a heat pump water heater would do the same job for less
Your roof is not suitable for solar collectors
You were counting on the 30% federal credit — it ended on 31 December 2025

Related Water Heater Cost Guides

Water Heater Cost Calculator

Compare running costs across all water heater types side by side.

Heat Pump Water Heater Cost

Cuts a similar share of the same bill for $2,500–$6,000 installed, with no roof needed.

Electric Water Heater Cost

Full monthly running cost guide for standard electric tank heaters.

Gas Water Heater Cost

Monthly cost breakdown for gas tank and tankless heaters.

Tankless vs Tank Water Heater Cost

Is a tankless upgrade worth it? Side-by-side cost comparison.

Heating Cost Calculator

Free US heating cost tools for every heater type.