Solar Water Heating has a lot of potential and it's a shame the US is not further along. In Israil 90% houses use solar for water heating. Tax breaks during the 1973 Energy Crises increased the number of solar water heating in the US, but after these tax breaks expired in the 1980's, the US industry collapsed.
If you go to Scotty's Castle in Death Valley California you will see a solar installation for heating water. Now it seems strange, that a place built in the 1920's would use Solar. It turns out that Solar was very popular in California up to about 1947 with over 1/3rd of houses in Pasadena (home of the Rose Parade) using solar heating. In the 1920's the discovery of Natural Gas ended new installations of Solar Water Heaters in California. In the late 40's, electricity became cheaper and thus ended widespread use of Solar Water Heading in Florida, outside of pools. If you drive around houses built in the late 1970's, you will still see some solar water heaters.
My opinion is the US in areas that make sense should continue tax incentives and/or require new buildings to use Solar Water Heaters. Federal Solar Water Installationax incentives of $2000 maximum of up to 30% of an installation have lapsed. It's a great way to reduce use of Natural Gas.
A brief look at the Economics of installing a Solar Water Heater and how long the cost is amortized. Installation costs seem to be around $7500 and reduces the heating bill by 50-80%. So payback would be 8-10 years assuming yearly savings of $750.
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