The Facts on Solar Hot Water Systems

How do they work?

Solar collectors installed on your roof capture solar energy. Water is heated by the heat energy in the collectors and is stored in a tank.

There are two main types of collectors available - evacuated tube and flat bed.

Evacuated tube systems (with a tank on the ground)

Evacuated Tube Systems

Evacuated tube collectors are made from impact resistant glass tubes. The round surface allows sunlight to strike the tubes at a perpendicular angle for most of the day, maximising energy collection.

Each tube consists of a transparent outer layer which allows light to pass through, and an inner layer which absorbs the light from the sun and turns it into heat. Cold water passes through the inner tubes of the collector where it is heated and then it returns to a storage tank on the ground. A vacuum between the inner and outer tubes works like a thermos flask to insulate the tubes. This insulation means that the tubes retain up to 97% of the energy collected and allows the system to work well all year round, even in cold weather.

Flat panel collectors with a tank on the roof (passive/thermosiphon systems)

Flat Panel with tank on the RoofA flat panel passive system has a tank which sits alongside the collector on the roof. The water is heated by either close-coupled or open circuit systems.

In close-coupled systems, the sun heats glycol contained in the collector. The glycol then flows up into the storage tank inside pipework where it transfers the thermal energy into the cold water stored in the tank. Glycol (or another liquid with a lower freezing point than water) is used to prevent ice damage to the collector. This system supplies heated water at mains pressure, so multiple taps can be turned on without greatly affecting the pressure. This option is cost effective but efficiency is reduced in cool climates.

In open circuit systems, water flows through the collector where it is heated by the sun, then it travels to the storage tank and into the pipes in your home. These systems are good in frost free areas that have good water quality. Harsh water can impact the life of these systems because of mineral build up and corrosion.

Passive solar hot water systems eliminate the need for space on the ground for a storage tank.

Flat panel collectors with a tank on the ground (active/split systems)

Flat Panel Collects with tank on groundFlat panel active (or split) systems have the collector on the roof, and a storage tank on the ground or other location.

Water is pumped through the collectors which means these systems use more energy than passive systems, and heat loss can occur between the tank and the collector. However, these issues can be kept to a minimum by using renewable energy as well as insulating the pipes and tank.

Active systems have a smaller visual impact as the tank is not located on the roof. However, active systems are more expensive and require more maintenance than passive systems.

Booster systems

Boosters ensure a constant supply of hot water during periods of little or no sunshine, and keep stored water at 60°C (the minimum recommended storage temperature).

Solar hot water systems can have electric or gas boosters. Electric boosters are usually housed inside the storage tank. Gas boosters can be either housed within the storage tank, or in a separate unit which further heats the water as it leaves the storage tank for use within the home (much like an instantaneous gas hot water system). As instantaneous boosters only heat water on demand, they are the most efficient and environmentally friendly booster system.

If boosters are not appropriately operated, less of your water will be heated by solar and more energy will be drawn from mains electricity.

Financial Incentives


What are Renewable Energy Certificates?

Renewable Energy Certificates (RECs) are an electronic form of currency. You receive one REC for every one megawatt hour (MWh) of electricity generated by your solar power system.

Small-scale and Large-scale Technology Certificates

RECs have been reclassified as Large-scale Technology Certificates (LTCs) and Small-scale Technology Certificates (STCs). New solar and heat pump hot water heaters may be eligible to create STCs. RECs is still an umbrella term that covers STCs and LTCs.

What are RECs worth?

The value of a REC is not a fixed price. RECs are a tradeable commodity, so the value of a REC is determined by the demand and supply for RECs and may vary from buyer to buyer and from day to day.

What can I do with my RECs?

There are two main choices for residents in relation to RECs:

  1. You can surrender your RECs to a registered agent (usually via the retailer of the product) in return for a discount or a cash payment at the time you buy your new system.
  2. You can hold onto your RECs and sell them at a future time or retire them so your solar system fully contributes to directly reducing greenhouse gas emissions rather than allowing another polluter to offset their emissions.

How do RECs relate to the Renewable Energy Target (RET) scheme?

The Renewable Energy Target (RET) scheme sets targets for the production of additional electricity generated from renewable energy sources. Australia currently has a set target of sourcing 20% of energy from renewable resources by 2020.

Electricity retailers and other purchasers of wholesale electricity (called liable parties) are required to contribute towards these increasing annual targets.

The liable parties show their compliance with the requirements of the RET scheme by obtaining RECs, where each REC is equal to one MWh of electricity generated from a renewable energy source.

The Office of the Renewable Energy Regulator, phone (02) 6274 2192, has more information about RECs.

Fact Sheet