Solar Hot Water NZ: Cost, Systems and What to Buy Instead

The Short Answer

Solar water heating works. A well-installed thermal system covers 50 to 75% of a household's hot water and lasts decades. The problem is not the technology, it is the competition: for similar money, solar PV panels now power your whole house, including the cylinder, and a hot water heat pump cuts the cylinder's running cost by around 60% before the sun gets involved at all.

That is why most NZ installers quoting “solar” today will quote you PV, and why the official EECA comparison of home water heating options no longer features dedicated solar water heating at all. Thermal still has its place, and we cover it honestly below, but if you came here pricing a way to stop paying the grid to heat water, you have three options to compare, not one.

What Solar Water Heating Is

A traditional solar water heater puts collectors on the roof that absorb heat directly and transfer it to your cylinder. No electricity is generated at any point: sunlight becomes hot water and nothing else.

• Flat plate collectors are glazed panels with water channels inside, the shape you see on older roofs. Simple and proven since the 1950s.
• Evacuated tubesare rows of glass vacuum tubes. They hold heat better on cold days. In NZ's temperate climate the two types perform similarly overall.

Sizing follows a rule of thumb of roughly one square metre of collector per person, feeding a cylinder that holds about 75 litres per square metre of collector. A family of four is typically looking at around 4m² of collectors and a 300 litre cylinder. Because the system involves plumbing and roof penetrations, installation typically needs a building consent, which is a cost and delay PV panels usually avoid. Check with your council.

What It Costs in NZ

Current NZ suppliers list installed solar water heating systems between $7,000 and $9,000, depending on the site and whether the cylinder is replaced at the same time. There are no government grants for solar water heating; the old subsidy scheme ended years ago.

What you get for that money is 50 to 75% of your hot water, which is a real saving: hot water is around 30% of a typical power bill, so a thermal system that performs well trims something like 15 to 20% off the total bill. The catch is that it can never do more than that. The panels heat water, and when the cylinder is hot, the rest of the sunshine hitting them is wasted. A PV system at a similar price keeps working on the rest of the bill, which is the comparison the next section is about.

For what full PV systems cost in NZ, our solar panel costs guide has the current installed prices by system size.

Why the Market Moved On

Fifteen years ago, solar water heating was the sensible solar purchase, because PV panels were expensive enough that using the sun's heat directly beat converting it to electricity. Then PV prices collapsed and the logic inverted. The same roof area that heats your water can now power your fridge, your heat pump, your EV and your cylinder, and export the surplus for credit.

The question changed from “how do I heat water with the sun?” to “why would I dedicate my roof to only heating water?”

You can see the shift in the official guidance: EECA's comparison of home water heating options covers electric cylinders, gas and hot water heat pumps, and dedicated solar water heating is not on the page. Most solar installers have followed the same path: they quote PV, and treat hot water as one of the loads the PV feeds.

The Three Options Compared

All three of these put the sun to work on your hot water. They differ in cost, in how much of the rest of the house they help, and in what they need from your roof.

The pattern: thermal is a single-purpose machine, the other two are general-purpose. That is also why the second option has quietly become the default answer in NZ: the diverter is a small add-on to a PV system that was already worth quoting for the rest of the bill.

PV Plus a Diverter Explained

A hot water diverter sits between your solar PV system and your existing electric cylinder. When the panels are making more than the house is using, the diverter sends the surplus into the cylinder's element instead of exporting it. Your ordinary cylinder becomes a thermal battery, storing the afternoon's sunshine as the evening's showers.

The maths is what makes it compelling. Exported electricity earns a buy-back rate of typically 8 to 12c per kWh, while the grid power you avoid buying costs 30c or more. Every diverted kWh is worth the difference, which is why a diverter on a typical household pays for itself in roughly 18 months. Our buy-back rates guide covers the export side of that equation, and our guide to buying solar explains why the diverter belongs on the quote as a line item, not an afterthought.

The practical advantages over thermal: it uses the cylinder you already own, it needs no plumbing on the roof and no building consent for the panels in most cases, and on the days the cylinder is already hot, the surplus goes to the rest of the house or the grid instead of being wasted.

Hot Water Heat Pumps

The third option attacks the problem from the other end: instead of making the energy cheaper, it uses less of it. A hot water heat pump cylinder works like a heat pump for your rooms, pulling warmth out of the air to heat the water. EECA's figures put a traditional electric cylinder at about $480 a year to run and a hot water heat pump at about $180, from an installed cost of around $7,000.

For a household replacing a dying cylinder anyway, that is the comparison that matters, and it is worth knowing that cylinders do die on schedule: they last about 15 years, and EECA reports that nearly half of NZ homes with electric cylinders are running one more than 10 years old. If yours is in that half, the smart sequence is often heat pump cylinder first, PV second, because the heat pump shrinks the load the PV then has to cover.

Heat pump cylinders and PV also stack: run the heat pump on a daytime timer and it heats water from your own generation at the hours the panels are strongest.

Which One Fits Your House

• Choose PV plus a diverter if your cylinder is healthy and you want solar for the whole bill. This is the default answer for most owner-occupied NZ homes, and the diverter is a small line on the quote.
• Choose a hot water heat pump if your cylinder is near the end of its life, your roof is poor for solar (shaded, wrong aspect, no space), or you want the biggest cut in water heating cost per dollar spent. Add PV later if the roof allows.
• Choose thermal solar water heating if hot water genuinely dominates your energy use and PV is a poor fit, which in practice means situations like very high constant hot water demand with limited electrical capacity. For a typical household it is the narrowest of the three options.

Whichever way you lean, price it against a real PV quote for your actual roof and usage. A diverter or a heat pump cylinder can be priced as part of the same job, and seeing the numbers side by side beats any rule of thumb.

Common Questions