Payback Period of Solar Pool Heaters

Payback Period is defined as the length of time it takes for the saving to cover the initial costs. This means that you must compare a solar pool heater to another source of pool heating such as a heat pump or a gas heater. The USA average cost of a solar pool heater with professional installation services is $6500 according to the Department of Energy. A DIY solar pool heater package can be installed for even less. However, the size and location of a pool can have big differences on the costs. Specifically, the amount of sunlight available versus the size of the pool being heated will ultimately determine the cost of the solar pool heater and that can range from $4000-$13,000 or more.

The alternatives to heating a pool are either Gas or Electric (Heat Pump). Both a gas and heat pump have very similar upfront costs, but like the solar investment it will depend on the location of the pool and the amount of water you are heating. Ultimately how many BTU of energy are needed to keep the pool at the desired operating temperature. In the colder months this will require a significantly larger heater size than in the warmer months. However, for this comparison we will assume a heater costing $5500 with installation. But be aware that installation can very. If you have to run an underground gas line to your pool heater this could easily increase the installation cost by double.

Looking at the table below there are many assumptions needed such as how many months is the heater needed? What is the initial cost? What is the cost of electricity versus the cost of gas? How long will the heater last etc. All of these variables make if very hard to give an exact number but rather a generalization can definitely been made.

Bottom line is compared with a gas heater the Payback Period of a solar pool heating system is calculated as the initial investment divided by the annual saving

Annual Savings $2400 -$60 = $2340

Initial Investment = $5500

$5500/$2340 = 2.35 years

Now comparing that against a pool heat pump and the payback is

Annual Savings $1050 - $60 = $990

Initial Investment $5500

$5500/990 = 5.55 Years

Life of the Heater – in the simple example below we have not yet considered the replacement cost of due to the life expectancy of the heater. It is a well know fact in the pool industry that gas heaters have the shortest life expectancy. They produce a lot of heat energy and as such this energy leads to early failure of the unit itself. In costal areas that have saltwater issues, the life can be even less. A gas heater life in our example is set low at 5 years but even if we double its life to 10 years it is much less that any solar pool heater, especially the Thermax or Thermax Extreme with life expectancies as high as 30 years. So if after 5-10 years you need to replace your gas or electric heater, the savings of a solar pool heater are just that much better!

Return on Investment - The Payback Period can always be looked upon in a matter we are all familiar with Rate of Return on our Investment or ROI. Anyone who is familiar with investing knows that a ROI of 10% is considered a good rate especially when banks are giving 2-4% on long term savings. So what does a payback of 2.35 years mean to the savvy investor? This is equivalent to an ROI of 42.6% and in our example of the heat pump the ROI is still a sizeable return at 18%.