With the cost of conventional energy ever increasing, consumers are becoming more interested in the use of solar energy. But which solar energy technology makes the most sense for the average consumer, solar heating or solar electric?

A solar heating system generally consists of solar collectors, a water storage tank, a pump and automatic controls. The estimated cost of a hot water solar heating system for a typical single family home is between $4,000 and $8,000, including installation. The system will replace approximately 80% of the energy used by a conventional hot water system, and represents a cost savings of $500 to $600 a year. The payback will average between 5 to 7 years after tax credits, meaning that after 5 to 7 years the total cost savings will have paid for the initial cash investment.

The components of a solar electric system are the photovoltaic solar collectors, an inverter, a charge controller and batteries. The projected cost of a grid-tied solar electric system for the same typical single family home is from $25,000 to $35,000 and will supply approximately 20-25% of the electricity usage of the home. The yearly savings would be between $500 and $600. The payback of the system is estimated at 15 to 25 years.

The initial costs of both of the solar hot water heating system and the solar electric system may be reduced by federal tax credits and state tax incentives. The cost savings per year and payback time for both systems will vary depending on the exact costs of the system components, actual current energy costs and future increases in energy costs.

Neither system is 100% efficient, since energy is lost due to conversion processes. Solar hot water heating systems are considered to be between 35% and 50% efficient, compared to solar electric systems which are 4% to 13% efficient.

In our opinion, because of the lesser initial expenditure, the quicker return of the investment and the higher rate of efficiency, the solar hot water heating system is the better, more cost effective choice.