The Difference Between Solar Hot Water & Solar Power

There are two main types of solar power systems available today. One is a solar power system that generates power whilst the other is a solar hot water system that generates hot water. 

While they both share the same concept, collecting energy from the sun, the two technologies are noticeably different.  A solar hot-water system functions by collecting the sun’s heat and transferring it into water or fluid for your hot-water requirements. Solar power systems, on the other hand, use solar photovoltaic panels that turn energy from sunlight into electricity, supplying power to all of your electrical household appliances.

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How the different systems compare:

Residential Solar Hot Water System

Residential Solar Power System


There is an initial investment $4,000–$8,000.  The main factors of the price is if you need to install a new hot water cylinder and what size system you choose to install.

There is a higher initial investment of $6,000–$25,000, a larger system will cost you more, but will reduce more of your power bill.


The current Government ended subsidies as of 29/06/12

No government incentives are available.

Energy Loss & Storage

Solar hot water is stored in your hot water cylinder.  If you do not use the hot water within a certain amount of time then there will be energy loss.

There is little energy loss as excess power is exported to the grid for credits or cash.  If you wish to store solar power you can install batteries.


Retrofitting a solar hot water system in comparison to installing a system into a new house is a similar cost.

Installing a solar power system on a new home can be easier for the installers if you consider the needs for a solar power system when designing a new home.

Who Benefits

The system benefits people those who use more of their hot water during the day or in the evening, shortly after the hot water is created.

The system will benefit those who use most of their power during the day.