Solar Hot Water
Project Drawdown defines solar hot water as: the use of solar radiation to pre-heat or heat water for residential use within buildings. This solution replaces conventional fossil fuel-based water heating. We acknowledge that solar hot water is also used in commercial buildings but do not model this application.
Solar hot water systems can be differentiated by: the type of solar thermal collector used (unglazed and glazed flat plate collectors and evacuated tube collectors), and the type of system operation (active, which have circulating pumps and controls, and passive, which do not). This analysis estimates the emissions and financial benefits of a high adoption of solar hot water. Data suggest that 8 percent of the total water heating market had already been adopted by 2018 with a heavy concentration in China, the world’s largest market.
Total Addressable Market
The total addressable market (TAM) for solar hot water is defined as the total amount of water heating demanded by residences worldwide, and has been estimated using data from several sources including the International Energy Agency (IEA) and Global Buildings Performance Network. It amounted to 5,400 terawatt-hour (therms) in 2018.
Custom scenarios were created to align with increased adoption of solar hot water from 2020-2050 at varying rates. Both scenarios were assessed in comparison to a Reference Scenario, where the solution’s market share was fixed at the current levels.
- Scenario 1: This scenario assumes that 15 percent of the total TAM is adopted in 2050 and 50 percent of that would be adopted by 2030. A 2nd order polynomial curve is fit to those points to create a smooth curve.
- Scenario 2: This scenario assumes that 30 percent of the total TAM is adopted in 2050 and 45 percent of that would be adopted by 2030. A 2nd order polynomial curve is fit to those points to create a smooth curve.
The emissions included in this work cover electricity and fuel for conventional heating of water, electricity for pumping of water in solar hot water systems, and indirect emissions from construction of the water heating systems.
Solar hot water systems were assumed to supplement the existing electric and gas heaters in houses, not replace them, so in all cases we assume that first costs for conventional systems would always have to be paid which, we admit, is a rather conservative assumption. However, due to the need to provide backup systems with as much heating power as needed by households. The solution’s first cost was an average of 41 data points from IEA, Renewable Energy Policy Network for the 21st Century (REN21), and other sources. The operating costs are represented by the fuel and operating costs for using either type of system. Emissions used emissions factors from the guidelines of the Intergovernmental Panel on Climate Change (IPCC).
The solar hot water solution was integrated with others in the Buildings Sector by first prioritizing all solutions according to the point of impact on building energy usage. This meant that building envelope solutions like Insulation were first, building systems like BAS were second, and building applications like Heat Pumps were last. The impact on building energy demand was calculated for highest-priority solutions, and energy-related solar hot water input values were reduced to represent the impact of higher building envelope solutions.
The environmental impacts of the Scenario 1 show a total greenhouse gas reduction of 3.6 gigatons of carbon dioxide-equivalent emissions. This is a result of adding 0.5 terawatts of additional heating capacity by 2050. These environmental benefits come at a cost of $717 billion in marginal first costs (including installation and replacement costs), and $293 billion in lifetime operations savings.
The Scenario 2, where 1.78 TW is added, shows 14.3 gigatons avoided for $2.7 trillion in net costs. However, only $1,143 billion is saved over the lifetime of installed technology.
Despite high upfront costs, solar hot water heaters are an important solution due to their attractive emissions savings. Financial savings are very conservative here since we assumed that the conventional water heating systems are still purchased. If instead better hot water storage tanks are installed along with smaller conventional systems, a better financial impact could result.
Country-specific evidence indicates that some other factors may keep adoption low, such as limited roof space, high upfront costs, and perhaps lack of knowledge and access to the technology in some regions. The countries with highest adoptions are those with firm national policies of encouraging solar hot water investment. Once purchased, residents can enjoy the clean, low-cost technology and keep greenhouse gas emissions low.
 For more on the Total Addressable Market for the Buildings Sector, click the Sector Summary: Buildings link below.
 To learn more about Project Drawdown’s growth scenarios, click the Scenarios link below. For information on Buildings Sector-specific scenarios, click the Sector Summary: Buildings link.
 For more on Project Drawdown’s Buildings Sector integration model, click the Sector Summary: Buildings link below.
 Although we used the term “priority”, we do not mean to say that any solution was of greater importance than any other, but rather that for estimating total impact of all building solutions, we simply applied the impacts of some solutions before others, and used the output energy demand after application of a higher-priority solution as the energy demand input to a lower-priority solution.
 All monetary values are presented in US2014$.