Solar hot water systems are effective in saving money and energy for consumers while reducing carbon emissions. The purchase of solar hot water technology also supports domestic manufacturing businesses and Australian jobs.

Solar water heating can refer to either a stand-alone solar hot water system or a heat pump, which heats water using energy from the ambient air.

A stand-alone solar hot water system uses collectors on the roof to capture heat. Solar hot water systems with a 'booster' use either natural gas or electricity from the grid as backup to ensure a reliable supply of hot water. Booster systems are much more cost-efficient to run than a standard gas or electric system.

Heat pumps use a small amount of electricity to run a pump, which circulates a refrigerant around the system. This refrigerant picks up heat from the air and transfers it to the stored water. Heat pumps are significantly more efficient than a conventional electric water heater.

Electrical water heating is the largest single source of greenhouse gases from the average Australian home, producing almost a quarter of household emissions.

Installing a solar water heating system will reduce the average household's carbon emissions by 2.4 to 3 tonnes. It can also save residents hundreds of dollars every year compared to an electric hot water system.

Solar water heating in Australia: 2015 in focus

Installation of a thermosiphon

Installation of a thermosiphon

Approximately 47,000 solar water heating systems were installed during 2015, taking the total installed across the country to more than 958,000.

Solar water heating has continued to lose market share to solar power since the industry peaked in 2009, when Federal Government rebates helped to increase sales. Sales in 2015 were no exception, falling about 20 per cent down on the year before.

Based on these figures it was the worst year for the sector since before 2007. Sales declined in all regions of the country, as the sheer volume of solar power systems being produced by the manufacturing powerhouses of China and Europe drove down costs and made it difficult for solar hot water to compete.

Cumulative solar water heater installations in Australia

2015 958,081
2014 911,115
2013 852,411

2012

794,112

2011

724,646

2010

619,596

2009

492,503

2008

297,808

2007

212,423

The future of solar water heating in Australia

Solar water heating is a proven technology that reduces greenhouse emissions and saves consumers money on their electricity bills.

The uptake of solar water heating has levelled off in recent years due to shrinking Federal and State Government rebates. Nevertheless, the rising cost of electricity will make switching to solar hot water a very attractive prospect for many households.

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