Break-Even Cost for Residential Solar Water Heating in the United States: Key Drivers and Sensitivities

Research output: NRELTechnical Report


This paper examines the break-even cost for residential rooftop solar water heating (SWH) technology, defined as the point where the cost of the energy saved with a SWH system equals the cost of a conventional heating fuel purchased from the grid (either electricity or natural gas). We examine the break-even cost for the largest 1,000 electric and natural gas utilities serving residentialcustomers in the United States as of 2008. Currently, the break-even cost of SWH in the United States varies by more than a factor of five for both electricity and natural gas, despite a much smaller variation in the amount of energy saved by the systems (a factor of approximately one and a half). The break-even price for natural gas is lower than that for electricity due to a lower fuel cost.We also consider the relationship between SWH price and solar fraction and examine the key drivers behind break-even costs. Overall, the key drivers of the break-even cost of SWH are a combination of fuel price, local incentives, and technical factors including the solar resource location, system size, and hot water draw.
Original languageAmerican English
Number of pages54
StatePublished - 2011

NREL Publication Number

  • NREL/TP-6A20-48986


  • break-even cost
  • electricity
  • natural gas
  • SAM
  • solar fraction
  • solar water heating
  • United States
  • utility
  • water heaters


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