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: 2016 in focus

Installation of a thermosiphon

Installation of a thermosiphon

Approximately 50,000 solar water heating systems were installed during 2016, taking the total installed across the country to more than 1 million.

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 2016 were no exception, falling about 15 per cent on the previous year.

Based on these figures, it was the worst year for the sector since before 2007. Sales declined in all states and territories except Tasmania, with the sheer volume of solar power systems being produced by the manufacturing powerhouses of China and Europe driving down costs and making it difficult for solar hot water to compete.

Cumulative solar water heater installations in Australia

2016 1,019,319
2015 969,766
2014 911,139
2013 852,411













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.


  • SunWiz Consulting, 2013
  • Clean Energy Council Solar Hot Water and Heat Pump Study, Mito Energy, 2011
  • Clean Energy Australia Report 2016