Solar hot water against solar electricity

Two different technologies are sold under the word “solar”, and confusing them leads people to buy the wrong one. Solar thermal heats water directly. Solar photovoltaic makes electricity, some of which can then heat water.

For most British homes today, photovoltaic is the better buy, and the reason is not efficiency. It is that electricity can become anything, while hot water can only ever be hot water.

What each one does

Solar thermal circulates fluid through roof-mounted collectors, which the sun warms, and transfers that heat into a hot water cylinder. It is efficient at what it does: a large share of the energy landing on the collector ends up in the water.

Solar photovoltaic converts light into electricity. A much smaller share of the incident energy is captured, and the electricity can then do anything, including run an immersion heater.

On raw efficiency, thermal wins comfortably. On usefulness, it usually loses, and households buy usefulness.

Why the less efficient one usually wins

Three reasons, and the first is the big one.

Electricity is fungible; hot water is not. A thermal system can only make hot water. Once the cylinder is up to temperature on a July afternoon, further generation is wasted. Photovoltaic generation that is not needed for hot water runs the fridge, charges a car, or is exported for payment at around 12p per kilowatt hour on a decent tariff. Every unit has a buyer; a hot cylinder has no buyer for warmth.

Panel prices collapsed. Photovoltaic hardware costs a fraction of what it did fifteen years ago, which is visible in the government’s per kilowatt installation data. Thermal collectors did not fall nearly as far, so the cost advantage thermal once had has largely gone, while both routes currently share the zero VAT rate on energy saving materials until March 2027.

Thermal has more to go wrong. Pumps, a controller, a heat transfer fluid that degrades and needs replacing, valves, and a cylinder with the right coil. Photovoltaic has no moving parts and, apart from the inverter, very little to service.

Where thermal still makes sense

It is not obsolete. The cases where it holds up:

• Very high, year-round hot water demand. A large household, or a property with consistently heavy use, where the cylinder rarely reaches temperature and surplus is never wasted.
• An existing, well-sited cylinder with a spare coil, so the retrofit is straightforward.
• Very limited roof area where hot water is genuinely the priority, since thermal delivers more heat per square metre than photovoltaic delivers electricity.

Even then, compare it against photovoltaic plus a diverter before committing. It is also the one variant with any devolved support left: Scotland’s Home Energy Scotland funding lists solar thermal and hybrid PV-T water heating as loan measures even though standard solar PV is out of its tables.

The diverter route, with the arithmetic

This is what most households should look at instead.

A solar diverter watches your generation and your consumption, and sends surplus that would otherwise be exported to your immersion heater rather than to the grid. It costs a fraction of a thermal installation and it bolts onto a photovoltaic system you were installing anyway.

The economics have to be run against what currently heats your water:

• Otherwise electric: a diverted unit saves the capped 26.11p import and forgoes 12p of export, a net gain around 14p per unit. A household putting 1,000 surplus kilowatt hours a year into the cylinder gains roughly £140 annually, which pays off a diverter costing a few hundred pounds in two or three years.
• Otherwise gas: the diverted unit displaces a gas-heated unit, which costs far less per kilowatt hour than electricity, so the net gain per unit shrinks to a few pence. The diverter has to be cheap and the surplus large to justify itself, and exporting at 12p can simply be the better use of the same units.

It also fails gracefully. If the cylinder is hot, the surplus is exported as normal. Nothing is wasted and nothing needs attention, which is a property thermal cannot offer.

If you already have solar thermal

It has not stopped working, and there is no reason to remove a functioning system. Two things worth knowing:

Servicing matters. The heat transfer fluid degrades over time and needs replacing on a schedule. A neglected thermal system quietly stops performing, with no fault light to say so; if yours has not been serviced in years, its output is a measurement worth taking before assuming it.

Adding photovoltaic is usually still worth it, roof space permitting. The two do not conflict; they compete only for area, and the panels can go on the pitch the collectors did not want.

Deciding between them

Ask three questions:

1. How much hot water does the household actually use, and is that steady through the year?
2. How much usable roof do you have, and is area your binding constraint?
3. Is there an electric car, a heat pump or high electricity consumption coming?

Heavy steady hot water demand and very limited roof favours thermal. Anything else, and particularly rising electricity consumption, favours photovoltaic with a diverter, because every future electrical load makes fungible generation more valuable and single-purpose heat less so.

Model both with the same assumptions before choosing: convert each to annual pounds saved, using your own rates, rather than arguing about efficiency percentages, and for the photovoltaic side run the full projection so the comparison is against the system you would actually buy.