Get answers to typical questions about solar water heating

Solar water heating puts sunlight to work for you. Find out how solar water heating systems work, what they cost and whether they’re right for you.

A solar hot water heating system can easily be added to your current water heating system. The following process describes how a common system works:

  1. Solar collectors work with the sun. A pump circulates fluid to the solar collectors on your roof to absorb the sun’s thermal heat.
  2. Solar storage tanks keep the water warm. The solar heated fluid is then pumped through an insulated water storage tank via sealed  coils. These hot coils heat the water stored in the tanks.
  3. Preheated water now flows into your conventional water heater. Any additional hot water needed is generated by your original water heater.
  4. Plentiful hot water is available. Through the solar water heater, hot water is supplied around the clock. This water can meet all your household needs, if you choose the right system.

The average household uses 64 gallons of hot water for daily activities. Activities include cleaning dishes, washing clothes and taking showers or baths. Every home that uses hot water has the potential save with solar water heating. This is especially true if there are several people in your household or if you have a larger home that uses an increased amount of hot water.

Solar water heating uses the sun, which is a free and natural resource. Solar water heating systems are also designed to reduce greenhouse gas emissions. This reduction can benefit the environment for future generations.

Purchasing a solar water heating system is an investment. The purchase is typically an up-front cost of around $9,000 to $10,000. The long-term savings can be substantial. The installation cost can be offset over its lifetime. Installing a solar water heating system may reduce the portion of your PG&E natural gas bill that is charged for heating water by up to 50 to 80 percent.

The cost of the system and the amount that you save depend on several factors, including:

  • The amount of hot water your household uses
  • The type and size of the solar water heating system
  • Your geographic location and the ability to capture the sun’s energy
  • The price of natural gas


Get a better sense of costs and savings for the system. Ask a local contractor to help you assess your water needs. The contractor can also design a system that works for you, calculate your rebate and tax credit, and help determine your financing options.

Yes, the California Solar Initiative (CSI) Thermal program, through PG&E, can provide you with more than $4,000 if you install a solar water heating system.

PLEASE NOTE: The final rebate amount is based on the estimated savings calculated by your contractor. Your current system must heat water with natural gas. You are not eligible if you use propane or electricity to heat your water.

The incentive amount is based on the expected performance of your system. Your contractor is typically responsible for determining the incentive amount and submitting the rebate application.

You may also qualify for a 30 percent federal tax credit for the installation cost of your system. Consult your personal tax adviser to find out more information.

Discover some of the various options to finance your system’s installation. The options include:

  • Bank and credit union loans
  • Property Assessed Clean Energy (PACE)
  • Power Purchase Agreements (PPAs)
  • Various other third-party financing options

Reducing the amount of hot water used in your home can reduce the size and cost of the system that you must install. Before you install a solar water heating system, consider other energy efficient upgrades. The upgrades can include high-efficiency washers and dishwashers, and low-flow showers and toilets.

Ensure your home’s roof is in good shape. Consider replacing your roof when you install your hot water heating system, if the roof is in poor condition. Ensure that enough roof space is exposed to the sun to accommodate your system. Establish a space near your current water heater to install the separate solar storage tank.

Solar water heating systems are designed to be reliable. A typical setup can last 20 to 25 years. In addition, the systems require very little maintenance if they are installed properly.

The first step is to use our contractor search tool to find a licensed contractor. Visit Find a Solar Water Heating Contractor.

PG&E recommends getting at least three estimates to compare costs, system types and savings from different contractors. There is no obligation and you can use the PG&E Solar Water Heating Information Kit to help make your decision. Download Solar Water Heating Information Kit (PDF, 746 KB).

Ask about experience and check references before hiring a contractor. The contractor must have an active A, B, C-10 or C-46 license to perform the work. You can verify the contractor’s license by visiting the Contractors’ State License Board (CSLB) website. Visit Contractors State License Board.