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Calculating Annual Operating Cost

To estimate the annual operating cost of a solar water heating system, you need the following:

  • The system's solar energy factor (SEF)
  • The auxiliary tank fuel type (gas or electric) and costs (your local utility can provide current rates).

Then, use the following calculations.

With a gas auxiliary tank system:

You need to know the unit cost of fuel by Btu (British thermal unit) or therm. (1 therm = 100,000 Btu)

365 41,045/SEF Fuel Cost (Btu) = estimated annual cost of operation

OR

365 0.4105/SEF Fuel Cost (therm) = estimated annual operating cost

Example: Assuming the SEF is 1.1 and the gas costs $1.10/therm

365 0.4105/1.1 $1.10 = $149.83

With an electric auxiliary tank system:

You need to know or convert the unit cost of electricity by kilowatt-hour (kWh).

365 12.03/SEF Electricity Cost (kWh)= estimated annual operating cost

Example: Assuming the SEF is 2.0 and the electricity costs $0.08/kWh

365 X 12.03/2.0 X $0.08 = $175.64

Source: US department of Energy (DOE)