How did we calculate that?

The yearly electricity savings are between $300 and $700 (Source: Department of Environment).

The Environmental Protection Agency estimates the life of a solar hot water system to be between 15 and 20 years.

So in an ideal scenario, you could save $700 per year x 20 years, which is $14,000.

You can install a solar hot water system from $1,800 (after rebates and depending on your location and needs).

Deducting the roughly $2,000 off the $14,000 leaves a potential profit of $12,000.

How else could you calculate it?

As you can see this calculation is the ideal scenario. Assuming that only $300 are saved per year and the system lasts 15 years, the total savings would be $4,500. There are systems that might cost around $4,000 fully installed (again after rebates).

So this scenario is not as profitable.

What we have not considered is the rising electricity prices.

Thinking further

However, even in this most negative scenario, you are still better off getting a solar hot water system than not doing anything – just financially.

Taking the environmental impacts into account: 3,000 kg of CO2 saved each year (25% of household greenhouse gas emissions) makes it an excellent proposition.

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