Solar water heater

Written and checked by the Energy Merchants desk · Reviewed 2 October 2026

A solar water heater captures heat from the sun with roof-mounted collectors and stores it as hot water in a tank. The tank may sit on the roof or at ground level, and most systems include an electric or gas booster that keeps hot water available when the sun is not enough.

It heats water directly, which is different from a solar panel system, which produces electricity. A house can have both.

In practice

Solar water heaters were an early part of the small-scale scheme and still create STCs when the model is eligible. The number of certificates depends on the model’s listing and the zone where it is installed, so there is no simple formula to run on site. You will find the figure by working through the approved product information for the specific model and postcode.

On the job the checks are familiar. The model and serial number must match the approved listing, the collectors and tank should be clear in the photos, and the installation type needs to be correct, particularly where a solar water heater replaces an electric system. The installation type guide explains the options, and the hot water and heat pump STC checklist lists the evidence.

In Victoria, a solar water heater may also qualify for VEECs, depending on the activity rules at the time. Check the Victorian Energy Upgrades activity list for the latest. See VEEC meaning.

Common confusion

Solar water heaters and heat pumps are routinely lumped together as “solar hot water” because they both appear under the hot water pillar. They are different technologies with different certificate calculations. See heat pump definition.

The deeming period for solar PV also does not apply to them. Solar PV STCs use a deeming period that shortens each year until 2030, while hot water systems follow their own calculation. Do not apply the PV formula by mistake.

Read more on the hot water STCs page and in the certificate trading glossary.