Fast read
Hot water heating is one of the biggest power users in Australian homes. But with a smart solar setup, it doesn’t have to be. By timing your hot water system to run during the day—or upgrading to efficient technology like heat pumps or solar diverters—you can turn a major energy cost into a solar-powered win. Let’s explore how to make hot water and solar work in sync.
Why solar and hot water are a natural match
In many households, heating water takes up to 30% of the electricity bill—especially if you’re using a traditional electric storage tank. The trouble is, most of these systems heat water overnight, when solar panels aren’t producing power. That means you’re drawing from the grid (even if you have solar), and paying for electricity when it’s least efficient.
But shift that hot water use to daytime hours, and the story changes. Now you’re using your own solar generation, lowering your power bills, and reducing your reliance on gas or off-peak tariffs. It’s one of the smartest ways to boost your solar return.
The main options for solar-powered hot water
There are three main ways to integrate solar into your hot water system—each with its own benefits depending on your home, system size, and budget.
Solar hot water (thermal collectors)
This is the original approach: rooftop solar collectors (usually flat-plate panels or evacuated tubes) absorb the sun’s heat and use it to warm water directly. That water is stored in an insulated tank, ready for use later.
These systems are completely separate from your solar PV—they don’t use electricity at all, just sunlight. In sunny regions, they can be very effective, but they’re more common in older setups or where households don’t have solar panels.
Installation is more involved, and the roof space can compete with PV panels. They’re still eligible for government rebates, but increasingly, households are opting for more flexible PV-based solutions.
Electric storage systems using solar electricity
This option uses a standard electric hot water tank, powered during the day by your rooftop solar. It’s a straightforward way to align water heating with solar generation—especially if your system includes a timer, smart relay, or a solar diverter.
Timers can be set to heat water during the middle of the day when solar production is highest. But diverters (like the Catch Power Green, Fronius Ohmpilot, or Powerdiverter) take it a step further. They automatically monitor your household consumption and send any excess solar to your water heater—so you’re not wasting energy by exporting it to the grid for a minimal return.
This setup is increasingly popular because it uses your existing electric system with minimal disruption. It works best with a solar PV system of at least 5kW to ensure enough energy is available for both household use and water heating during sunny hours.
Heat pump hot water systems
Heat pumps are like fridges in reverse: they extract heat from the surrounding air and use it to warm water. The result is a highly efficient system that uses 70–80% less electricity than traditional electric tanks.
When powered by your solar panels—either directly during the day or via stored energy in a battery
—they become an even smarter investment. Some modern heat pumps come with built-in timers or smart controls that allow you to align their operation with solar production.
Heat pumps are eligible for substantial rebates across Australia, including under the federal STC program and various state-level incentives. While the upfront cost is higher, the long-term savings
—both financial and environmental—make them an excellent option, especially when replacing an old electric or gas unit.
What setup works best for most homes?
For many Australian households, the sweet spot is either a solar-powered electric tank with a diverter or a heat pump paired with smart daytime controls. These options are flexible, efficient, and easy to integrate with an existing solar PV system.
They also help you avoid sending excess energy to the grid (especially with low feed-in tariffs), instead putting that electricity to good use heating water for your home. Over time, this can significantly increase your solar system’s return on investment.
What to consider before making a change
Before upgrading or reconfiguring your hot water system, it’s worth asking:
- Is your current system heating at night, and missing solar opportunities?
- How large is your solar system—and is there enough daytime surplus to run a hot water unit?
- Would your system benefit more from a diverter or a full heat pump upgrade?
- Are rebates available in your area to help cover the cost?
The answers will depend on your household’s size, hot water needs, roof layout, and budget—but the right solution is usually straightforward with expert advice.
Final thoughts: Hot water done the solar-smart way
Hot water and solar go hand in hand—if your system is set up to take advantage of it. Whether that means switching your electric tank to daytime heating, installing a diverter, or investing in a heat pump, there are multiple pathways to savings.
And with rebates available for heat pumps and solar diverters, many upgrades are more affordable than you might expect. If you’re not sure where to begin, Your Energy Answers can connect you with local accredited professionals who’ll assess your setup and tailor the right solution to your needs.
