4 Responses to “Comparitive Economics: Heat Pumps vs Solar Thermal”


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  1. Alireza

    I think cost of heat pump is

  2. Steve E.


    Up front costs are always a consideration. But long term value is also a very important consideration.

    As a HVAC mechanic, I can tell you that a heat pump is certainly not maintenance and repair free. I’ve know heat pumps to last 20 years with only changing filters (if done religiously). I’ve also know heat pumps to spring refrigerant leaks and cost the owner a small fortune to fix multiple times. Heat pumps today can be very complicated pieces of equipment to work on which will require a very skilled and seasoned mechanic. To top that off, because the world of refrigerants is always changing, manufactures are still tinkering with solutions to make the new equipment work and last. We have no long term examples of what works and what doesn’t.

    If you intend to heat a large quantity of hot water, a solar drain back system, in my book, is worth the consideration to save 50% on fuel costs and near zero on maintenance. That’s long term value.

    Good luck!

  3. Dr. Ben

    These are all good comments. The last time I talked with a furnace mechanic, he said modern furnaces/heat pumps are designed to last about 7 years. They used to last 20 years.

    Part of what I read from Atool’s comments was that in his part of Africa, solar equipment is not readily available and is very expensive. He also says it takes only 1 to 1-1/2 kWh of electricity to heat water where he is. If his climate is mostly hot so you need A/C most of the year, then an A/C unit that recaptures the heat for water is not a stretch. Maybe I have misunderstood his situation.

    Steve’s comments are also correct. The real value of solar how water (SHW) is in its long term energy production. Let me explain it this way.

    You can buy a water relatively cheaply, but you pay a lot for the energy to run it. The lifetime of the heater may be 7 – 10 years.
    Or, you can pay a lot more for a solar system and have (almost) free energy for 20 years. Which is the better deal?

    A solar system is a capital expenditure – you are buying your own utility power generating system. That is a capital cost. A water heater is an expense that consumes energy.

    Capital equipment is amortized over its lifetime. It provides a return on the investment. A water heater is a cost, that continues to consume money throughout its life. It has no return on investment.

    We value capital expenditures either by the payback period (PB), or by its return on investment (ROI). In the simplest sense ROI = 1/PB. Most homeowners don’t deal with payback calculations and may not know what a good payback is.

    For example, many years ago my phone rang from a guy who wanted to know what the payback was on one of my systems. I asked him what he thought a good payback was. He said two or three years. Then I asked if he had any money in a saving account and what interest (ROI) was he getting. He said 5% (someday, we will get back there). He didn’t realize that a 5% ROI is equivalent to a 20 year payback period (ignoring interest accumulation).

    The point was, he thought a good payback was 2-3 years, which is actually a 33-50% ROI, but was satisfied with a 5% interest at the bank. Today, a solar system can be expected to have a payback period of 5-10 years, depending on local incentives and other conditions. That is equivalent to a 10-20% ROI, which is 5 to 10 times what money in the bank is earning these days.

    For example, in my state (North Carolina) a $5500 solar system costs only $2475 after credits and will create about 16 million Btu (MBtu) per year. Electricity at $.10/kWh is equivalent to $29/MBtu, so the annual solar energy value is about $469 per year. Based on the initial cost of $2475, the return on investment of 469/2475 = 21%. Where can you put $2475 and get a return of 19% the first year, rising every year as the cost of electricity goes up?

    Of course, prices, credits, and energy yield are specific to different locations, so this example is meant to illustrate the methods for determining the value of a solar system.

    The bottom line. Do the calcs and see if a solar hot water system is the best option for you.

  4. I like your writing style and the logic in your reasoning.
    The questions and answers are valuable – and they would not exist without your article to set them up.
    If the argument turns to economic payback, I have in the past considered it no longer worth the effort of discussion. With your permission, in the future I will offer your line of reasoning, and ask them if they can get a more reliable interest rate payer than the sun!


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