How much money you save depends on the following:

• The amount of hot water you use
• Your system's performance
• Your geographic location and solar resource
• Available financing and incentives
• The cost of conventional fuels (natural gas, oil, and electricity)
• The cost of the fuel you use for your backup water heating system, if you have one.

On average, if you install a solar water heater, your water heating bills should drop 50–80%. Also, because the sun is free, you're protected from future fuel shortages and price hikes.

If you're building a new home or refinancing, the economics are even more attractive. Including the price of a solar water heater in a new 30-year mortgage usually amounts to between $13 and $20 per month. The federal income tax deduction for mortgage interest attributable to the solar system reduces that by about $3–$5 per month. So if your fuel savings are more than $15 per month, the solar investment is profitable immediately. On a monthly basis, you're saving more than you're paying.

• Estimating a solar water heater system's cost
• Energy-efficient water heating