Solar thermal or hot water systems convert the sun's energy into hot water. The water is then used for washing, bathing, etc. Up to one third of your hot water can be supplied by a solar thermal system which also has the added advantage of reducing Carbon Dioxide emissions. Systems can also be used for heating swimming pools. Note that solar hot water systems do not heat the water used for central heating.

Solar Thermal Savings

A solar thermal system can provide around one third of your hot water needs which adds up to the annual savings below. The actual amount depends on the type of fuel that is currently used in the property. Once Renewable Heat Incentives (RHIs) are introduced, householders will receive an additional payment of around £350 per year. A typical domestic solar thermal system can also reduce carbon dioxide emissions by around 325kg per year.

Renewable Heat Incentives (RHIs)

From 1st April 2011, payments will be made by the energy companies for every unit of heat generated by a solar thermal system. These Renewable Heat Incentives will replace grant funding which is expected to cease before the end of 2010. A suitable system fitted now (with grant funding) will qualify for Renewable Heat Incentives.

The Renewable Heat Incentive scheme is still in consultation, so the exact payments and terms have not yet been finalised. However, for solar hot water systems up to 45kW, it is likely that a payment of 18p per kWh will be made for a period of 20 years after installation. This equates to around £350 per year for a typical system.

RHI payments represent a return on investment of around 8%. Higher band tax payers are also expected to receive even higher returns. Under the Renewable Heat Incentive system, most installation costs are therefore likely to be recovered in 7 to 9 years.

• RHI scheme commences on 1st April 2011.
• Suitable systems fitted now will qualify for RHIs.
• 18p per kWh paid for systems of up to 45kW.
• Equates to approximately £350 per year.
• Expected 8% return on your investment.
• Fitting cost likely to be recovered in 7 - 9 years.

Is Your Property Suitable?

There are several factors to consider before you look at installing a solar hot water system. As mentioned above, you must intend using the system to heat water for use in your property or a swimming pool as they do not heat water for central heating systems. Domestic householders should have already installed or be committed to installing basic energy efficient measures such as home insulation. You should be aware of the likely cost and understand what the potential savings of the system are likely to be.

The property must be owned by the applicant. If the property is a listed building or situated in a conservation area or world heritage site, you should check with your local authority before applying as planning permission is far less likely to be obtained.

In most cases, solar panels are located on a roof. You must have at least 3m² to 4m² of space available to situate the panels. The panels must ideally face between South East and South West although it may be possible to split them between East and West facing. The proposed panel location should not be shaded by trees, buildings or other obstacles. The roof should also be strong enough to take the weight of the panels. It will also be necessary to fit an additional or larger hot water cylinder.