Solar Water Heating in NZ

What’s the most expensive thing on your power bill? Chances are, it’s hot water. While our other appliances are becoming increasingly energy efficient, hot water costs have gone from making up a third of an average Kiwi’s power bill to now being our biggest power sink. And while it’s often overlooked, solar can be an amazing tool to bring those prices right down, as we discuss in our second episode of Solar in NZ all about solar water heating. With so many different options out there in the way of using solar to heat your water, we run through the pros and cons of the major available options here in Aotearoa to make sure you’re getting what would be best for you.


Solar Direct

Starting with a method that has been gaining momentum in New Zealand as of late: solar direct. With a solar direct solution, you have solar panels on your roof that generate DC electricity from the sun, just like any other solar panel, but instead of that DC power being sent to an inverter to convert into AC power to be used in your home, it’s sent directly to your hot water cylinder. This sounds like a straightforward option on the surface, but perhaps it’s a little too straight forward. Since the power is only going to your hot water cylinder, you’re severely limiting the effectiveness of your panels. Once the water’s hot, there’s nothing left for the power that your panels are generating to do, whereas a regular solar system would be sending that power all throughout your house for maximum effectiveness. And because the system isn’t connected to the grid, you can’t sell that excess power back to the grid either.

Solar Power With a Power Diverter/Timer

If you’re already keen on using solar for your whole house, then this is a great option. Power diverters keep an eye on how much power your panels are generating compared to how much power you’re actually using. Instead of sending that excess power back to the grid, it diverts it into your hot water cylinder. Essentially, it turns your hot water cylinder into a battery of sorts, storing the power and offsetting the high amount of power you’d normally use to heat your hot water. Timers are the slightly less intelligent version of this concept, sending power to your hot water cylinder at specific times of the day, every day, based around peak sunshine times. Both have the significant advantage of reducing your hot water costs while being part of your regular solar system, but diverters can do this based on your power usage. The main downside for inverters is their significant price, around $1,800, money which could be invested into a regular solar battery instead. Alternatively, timers only cost a few hundred dollars, but you’ll probably have to make use of some grid power in conjunction with them to heat the water as you need.


Solar Thermal

Solar thermal is an outlier on this list for one key reason: there’s no electricity involved. Instead, the water is circulated in conductive tubes on your roof, heated directly by the sun, and then sent into your water cylinder. And that’s it. It might sound old fashioned or overly simplistic, but unlike solar direct you aren’t spending the money you’d expect for a regular solar system just to heat your water. A solar thermal system generates around 3kWh’s of power, enough to heat your hot water while not being too much. The price reflects this, being around $6,000-$7,000, compared to about $11,000-$12,000 for a system generating electricity. That’s about half the price to heat the same amount of water, leading to roughly twice the return on investment for solar thermal in comparison to solar direct. It also takes up much less space on your roof than a panel system for your hot water.

Hot Water Heat pumps

While being not exclusive to solar, hot water heat pumps are extremely efficient ways to heat your hot water, outputting around 3-4x the power that you put into it, dropping your power usage on water from around half of your bill to about 10% instead. This makes them a fabulous option to pair with a solar power system, since it means you need to use much less of your overall power generation to get the same result as you would with a standard hot water cylinder. It’s a very popular pairing in Australia, where both solar and hot water heat pumps have subsidies, but without subsidies on either in New Zealand the upfront cost on this option is quite substantial. It’s a great option to dramatically reduce your power bill, just with a hefty initial price tag.


What about Gas?

Gas water heating has long been touted as a more reliable source of water heating than solar. The perceived options are having hot water on demand whenever you need it as opposed to waiting for your water to heat up and only paying for what you use. But as gas prices are slated to dramatically rise in the next few years, the price advantage is rapidly diminishing, and if you’re reliant on gas bottles and don’t have gas plumbed to your house then if you run out you need to wait till you get a new bottle before you can have a shower. As opposed to waiting around 45 minutes for water to get hot again with solar, solar options seem to be the New Zealand is pivoting towards.



Each of these options, just like anything in solar, will work great in some environments and not so great in others. Take all their pros and cons into account and compare them with what your house needs, and feel free to drop a comment on the video or get in touch with us to answer any questions and get a free quote with your house’s needs in mind:

Get yourself a free quote here.

Referenced Material


EECA List of MEPS-compliant water heaters

☀️Water heating is one of our specialties and we have options you won’t find anywhere else, so get in touch with us if you’ve got any pātai/questions: contact us


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