As with a solar electric system, a solar thermal system will certainly save you money, but the amount of money saved is dependent on several factors. These include how your solar thermal system will be used, the size and type of system, local climate, and the system rating. As always, be sure to explore state and federal rebates and tax incentives for solar thermal installation. These ever-increasing incentives can cut your initial costs significantly and have you saving money quickly.

Typically, solar thermal systems cost between $2,000 and $4,500 to purchase and have installed, which is usually more expensive than a conventional gas or electric system. That is why it is so important to study the long-term savings involved with solar thermal heating.

Solar thermal systems can feasibly replace up to 80% of your energy needs for heating. For a family of four, a solar thermal system can save up to $300 per year — that is a savings of about 25 dollars per month. For $4,500 system, that would be a 15-year payback. But this is ignoring tax incentives and rebates which can significantly reduce initial costs and significantly increase your savings.

If you are building new, then you may be able to include a solar thermal system in your mortgage, which will decrease monthly payments for the system. According to the DOE, a mortgage-embedded solar thermal system will usually amount to $13 and $20 per month. And the federal income tax deduction amounts to roughly $3-5 per month. Therefore, at a savings of $25/month and a cost of only $15/month, the system becomes profitable immediately.