Estimating a Solar Water Heater System's Cost

Before purchasing a solar water heating system, you can estimate its annual operating cost and compare it with other more and/ or less efficient systems.

Before you can choose and compare the costs of various systems, you need to know the System size required for your home.

Calculating Annual Operating Cost

To estimate the annual operating cost of a solar water heating system, you need the following:

The system's solar energy factor (SEF)

The auxiliary tank fuel type (gas or electric) and costs (your local utility can provide current rates).

Then, use the following calculations:

With a gas auxiliary tank system:

You need to know the unit cost of fuel by Btu (British thermal unit)

365 × 41,045/SEF × Fuel Cost (Btu) = estimated annual cost of operation

OR

365 × 0.4105/SEF × Fuel Cost (therm) = estimated annual operating cost

Example: Assuming the SEF is 1.1 and the gas costs \$2.10/ therm

365 × 0.4105/1.1 × \$2.10 = \$286.04

With an electric auxiliary tank system:

You need to know or convert the unit cost of electricity by kilowatt-hour (kWh).

365 × 12.03/SEF × Electricity Cost (kWh)= est. annual operating cost

Example: Assuming the SEF is 2.0 and the electricity costs \$0.08/kWh

365 X 12.03/2.0 X \$0.12 = \$263.45

Comparing Costs and Determining Payback

Once you know the purchase and annual operating costs of the solar water heating systems you want to compare, you can find the costs associated with conventional water heating systems and compare the two.

Use the table and calculations below to compare two solar water heating systems and determine the cost savings and payback of the more energy-efficient system model.

 System Models System Price SEF Estimated Annual Operating Cost System Model A System Model B (higher SEF) Additional cost of more efficient system model (Model B) Price of System Model B - Price of System Model A = \$Additional Cost of Model B Estimated annual operating cost savings (System Model B) System Model B Annual Operating Cost - System Model A Annual Operating Cost = \$Model B's Cost Savings Per Year Payback period for Model B \$Additional Cost of Model B/\$Model B's Cost Savings Per Year = Payback period/years

Example:

Comparison of two solar water heating system models with electric backup systems and electricity costs of \$0.08/kWh.

 System Models System Price SEF Estimated Annual Operating Cost System Model A \$1,060 2.0 \$176 System Model B \$1,145 2.9 \$121 Additional cost of more efficient model (Model B) \$1,145-\$1,060 = \$85 Estimated annual operating cost savings (Model B) \$176-\$120 = \$56 per year Payback period for Model B \$85/\$56 per year = 1.5 years

Other Costs

When comparing solar water heating systems, you should also consider installation and maintenance costs. Some systems will cost more to install and maintain.

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