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Can Solar Panels Cut The Cost of Heating Water?

The average water bill has risen by 6% in England and Wales in recent days, which could see households having to pay up to an extra £500 a year. Meanwhile, Scottish households will see an even bigger increase of 8.8%. 

April will also bring rises to council tax and broadband bills, while energy bills have continued to soar for the last couple of years – leaving families across the UK looking for extra ways to save. 

But did you know that harnessing the sun’s rays could help you cut the cost of heating your water? By turning to the power of the sun, you’ll not only reduce your carbon footprint, but you’ll also significantly reduce the cost of heating water. In fact, most solar heating systems can reduce a hot water bill by up to 70%.


Jon Bonnar, Managing Director at Cotswold Energy reveals the benefits of using solar power to help mitigate the financial impact of rising bills:

What is solar water heating? 

Solar water heating involves using solar panels to absorb the heat of the sun and transfer it to the water you use in your home. It uses free energy harvested from the sun to heat up your hot water for baths, showers, washing clothes and other daily tasks, and works alongside conventional water heating systems to heat your water. 

Heat absorbed by the solar panels or tubes - called solar collectors - is used to pre-heat a water and glycol mix that is then fed to a heat exchanger inside your water tank or hot water cylinder, or directly to your combination boiler. The glycol and water mix transfers its heat to the water, which is then used throughout your home. This reduces the amount of energy needed to bring the hot water up to a usable temperature. 

There are two types of solar water heating collectors: glass tubes that are fitted to the roof called evacuated tubes, and flat plate collectors. Both are fixed to the roof of your home for optimal exposure to the sun.   

What if I already have solar panels?

If you already have solar panels, it’s likely that you’re not using all of the solar energy that you’ve generated. Any surplus energy will be exported back to the National Grid – but you could use it to get free hot water instead. If you’ve generated it yourself then it would make sense that you’d want to use your own solar energy, especially if it could heat your water up for free. 

If you have a conventional boiler and hot water cylinder system, you could install an Immersion Power Diverter to maximise your solar panel usage and divert the extra energy you’ve generated into heating your hot water tank. They don’t affect ‘feed-in’ tariffs either, which pays for 50% of the energy your system generates, so you will still be paid the same whether you export it to the national grid or divert it to your appliances. Despite an initial cost, the reduction in energy bills means that you’ll have effectively paid off the cost of installing an Immersion Power Diverter within two years. 

However, the Smart Export Guarantee allows energy suppliers to decide what tariffs to offer their customers. This means it may not be financially beneficial if you’re on this, so it’s worth checking the rate you’re getting for your excess energy and whether it’s worth installing before you go ahead with an Immersion Power Diverter. It’s also worth noting that you won’t be able to invest in one of these if you have a combi boiler. 


How much does this cost and how much can you save? 

Solar water heating system

Cost: Between £2,500 and £5,000, depending on the size of the system and the type of solar collector 

Uses: Heating your hot water

Potential saving: Up to 70% off annual energy bills

Payback period: Between five and 10 years depending on the size of the system and the type of solar collector 


Immersion Power Diverter

Cost: Between £250 and £600 plus installation - depending on the type of diverter

Uses: Using surplus energy generated from solar panels to heat the water from your conventional boiler and hot water cylinder

Potential saving: Up to 50% off annual energy bills plus whatever you’re paid for generating your own energy

Payback period: Less than two years.


What are the benefits of using the sun to heat your water?

Cuts the cost of heating your water - A well installed and properly used solar thermal system will drastically cut your hot water bills by up to 70%. The Energy Saving Trust estimates savings in the region of £120 to £225 a year for an average four metre squared system. This does depend on a variety of factors including the size of your house, the type of system being replaced and where the panels are installed. 

Works all year round - The system works all year round - whether the sun is shining or it’s the middle of winter. However, you’re still likely to need to heat the water further with a boiler or immersion heater, especially in the lower daylight months. During the summer you can expect the system to provide 90% of your hot water, this will usually drop to around 25% throughout the winter with typically low light levels. 

Low maintenance - Solar hot water systems are generally low maintenance and can last up to 10 years as long as they’re serviced regularly, and depending on where they’re installed and how they’re used. They also tend to come with a five to 10-year warranty, which means any repairs should be covered for the duration of the systems’ lifespan. 

They’re energy-efficient  - Solar water systems offer a sustainable alternative to heating systems that rely on fossil fuels. It’s renewable, as it uses the energy of the sun, so you’ll reduce your carbon dioxide emissions by not solely relying on conventional heating methods.  


Things to consider

Before you invest in solar water heating, there are a few things that you’ll need to consider to make sure that it’s right for your home:

Can be expensive to install

While they are cheaper than standard solar panels, solar water heating systems can still be expensive to install. They can cost between £2,500 and £5000 depending on the size of your home and the type you decide to go with. This could naturally put many people off, however, you could consider a government grant to help cover some of the costs. 

Those on low-incomes in the councils that applied to the scheme can get up to 10% of funding for solar water heaters. It’s available in around 45 local councils in England, and to be eligible your home will need to be off the gas grid and have an Energy Performance Certificate between D and G. Once they’re installed, households can expect to save up to 70% off their energy bills each year and will be reducing their carbon footprint. 


Where you put your solar heating system matters. Whichever method you wish to use, your panels should face predominantly south to make the most of the sun and ensure the system is working efficiently. It also needs to have as little shading as possible from surrounding buildings, trees and chimneys as any shading will affect the output of the solar panels. You’ll also need space - specifically between two and five square metres of roof space should be enough to fit the panels. 

Check the compatibility

Before you invest in a solar water heating system, you should make sure that your current heating system is compatible with it or check whether you need anything else to make it compatible. Generally, conventional boilers and hot water cylinder systems are often compatible with solar water heating systems. However, if you have a combi boiler, then it’s likely that a solar hot water cylinder will need to be added to the system. 

Do you need planning permission?

As most systems are considered ‘permitted developments’, they don’t generally need planning permission. However, if you live in a listed building or a conservation area then you may have more restrictions. If you’re unsure, it’s always worth double checking with your local planning office. 

* Jon Bonnar is Managing Director at Cotswold Energy *

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