Solar water heating has been around for around 2500 years, it is a utilization of renewable solar energy to heat water. There are both "Direct & Indirect" and "Active & Passive" systems, these systems consist of a solar collector and a storage tank. These systems are sized nowadays using computer software, they have many benefits (Economical, Environmental, and Long-Term). They are essential to any person that wants to cut down their energy costs while maintaining a sufficient water heating system.
Solar water heating has been around for many years (around 2500 years) beginning with roman times, the romans were the first to use the sun for water heating purposes and they even had disputes around the rights of sun use. American Indians also used solar energy to heat their homes in cliffs and open areas at around 1200 AD. 
Buildings were built with glass walls to facilitate the growth of vegetables all year by the Dutch in the 1500  s, and in Switzerland a Swiss by the name of Horace-Benedict de Saussure was able to conclude in the 1760s that temperatures are always higher when the sun's rays pass through glass than when there is no such material. Horace built a box in 1767 that was insulated and painted its base black in order to absorb most of the sun's energy while covering the top with two glass sheets; this would be later known as the prototype of all solar water heaters. 
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He then found that if the box was exposed in a perpendicular placement to the sun the temperatures reached on the inside of this box surpassed the boiling point of water. This was the first ever demonstration of the greenhouse effect .
Figure : De Saussure's First Hot Box Concept 
A solar furnace was built in 1774 by a man named Antoine Lavoisier using mirrors, and it was capable of reaching temperatures as high as 3000oF, and a solar driven steam engine was built by August Mouchet that could pump around 500 gallons of water each hour, it also ran a device that was invented by Ferdinand Carre twenty years earlier that made ice. 
The first commercial solar water heater was created in 1891 when Clarence Kemp, put a black-painted water tank inside of a glass covered box similar in design to Horace- Benedict's design of the hot box, the heat generated from inside the box was absorbed by the colder water of the tank and then the heated tank water could be used for bathing or any other domestic use involving hot water. 
Then solar water heaters appeared on many houses in Baltimore, Florida, and California, since California had a lot of sunshine thousands of people were willing to pay $15 for Kemp's solar water heater (Known as the "Climax") to save on fuel costs while having hot water to use. The downside to using this invention was that the water was stored in the tanks which were exposed and affected by bad weather, which could damage the tanks or cool down the water to a degree such that there was no hot water at all in the tanks .
The problem of this invention was solved by a man named William J. Bailey in the year 1909 by separating the solar heating of the water from its storage, using one part as a solar collector consisting of water pipes attached to a metal plate which was painted black inside of a glass-covered box, connected to the other part as a remote insulated storage tank above the collector. So when the water was heated by the sun the lighter hot water would move upwards towards the tank and the colder heavier water would move downwards towards the collector, therefore the hot water could be stored in the insulated tank for use at night or early mornings. 
So around the year 1900 there were around 1600 solar water heater in California and about 60,000 solar water heaters in Florida by the year 1941 , but the discovery of oil and natural gas reserves in California eliminated any need for solar water heating businesses in the 1920s. 
However, there was a turning point for the solar energy industry and that turning point was the oil embargo of 1972, where the rising prices of fuels coupled with the shortages of natural gas and oil showed people that cheap fuel was not a long-term deal, and people began to look at solar and renewable energies for the solution. 
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Modern day solar water heaters consist mainly of collectors, storage tanks, and pumps (depends on the type of system).
Flat Plate Collectors:
This is the most commonly used type of collectors; it consists of an insulated box containing a dark absorber plate covered by at least one transparent cover.
They consist of many rows of glass tubes arranged in parallel, each of these tubes of an outer tube made of glass while having an inner tube coated with absorber coating or selective coating to allow for good solar energy absorption while minimizing heat losses by radiation. Air between the two tubes is "evacuated" to form a vacuum space between the tubes eliminating all losses of conduction and convection. 
They consist mainly of parabolic trough collectors (PTCs) [in the case of house-hold use] which use mirrors to concentrate the solar energy onto a specific "receiver" absorbing tube and a fluid passes through this fluid. 
Figure : Flat-Plate Collector 
Figure : Evacuated-Tube Collector Storage tanks for house-hold usage should be well insulated to decrease any losses due to weather effects, some solar water heaters use a pumping system to recirculate some of the warm water from the tank back though the collector piping in order to protect the pipes from freezing in some area where the weather is very cold. http://www.solarpower2day.net/images/17.gifhttp://upload.wikimedia.org/wikipedia/commons/4/47/Evacuated_tube_collector.gif
Figure : Concentrating Collector (PTC) http://www.hk-phy.org/energy/alternate/solarheat_phy/images/concentrating_collector.gif
Direct & Indirect Systems
Direct systems also known as "open loop" systems are cheaper, they circulate water through the collectors, but they can have no freeze protection, they can overheat if they don't have a heat export pump, and unless an ion-exchange softener is used, they can accumulate scale. 
Indirect systems also known as "closed loop" systems use a heat transfer fluid that is circulated through the collector, the heat transfer fluid has better freeze protection and is used to heat up water stored in a tank through heat transfer. It is slightly more expensive but since the working fluid in the collector can be water or water mixed with anti-freeze it can have better freeze protection properties. 
Passive & Active Systems
Passive system's circulation relies on "heat pipes" or heat-driven convection, where the cost is lower and the systems do not require any maintenance, but these systems have major freezing and overheating concerns. Passive systems have a lower efficiency than active systems. 
Figure : Direct - Passive SWH 
Figure : Indirect Active SWH Active system's circulation requires at least one pump for active circulation, active systems have more advantages than passive systems but are more expensive. The advantages to this system other than higher efficiency are that the storage tank can be placed lower than the collector and can be hidden from view, system can be controlled easily, and the storage tanks can be placed in a conditioned place to reduce any thermal losses. http://upload.wikimedia.org/wikipedia/commons/5/57/Thermosiphon2.jpghttp://www.solar-energy-at-home.com/images/active_closed_loop_solar_water_heater.gif
When choosing which solar water heater is best for a household, the choice of size for the system is also important. In the same way the choice of a conventional water heater is chosen according to household use (depending on the number of gallons used by the household residents), the choice of the suitable size of solar water heating equipment for the household is based on the solar collector area to be used as well as the storage volume needed in order to provide all of the hot water required by the household. 
Some computer software can be used to help with determining these requirements. Solar storage tanks are provided commercially with volume capacities of 50, 60, 80, or even 120 gallons, it has been found that small storage tanks with capacities ranging from 50 to 60 gallons (189 to 227 liters) are sufficient for systems that can provide hot water for up to 3 people, while a medium storage tank of a capacity of 80 gallons (303 liters) can provide sufficient hot water for 3 to 4 people, and the larger storage tanks with a capacity of 120 gallons (454 liters) can provide sufficient hot water for up to 6 people. 
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It has been determined that (for people who live in the "Sun Belt" area in the United States) each of the first 2 people would require around 2 square meters (m2) of solar collector area in order for them to receive sufficient hot water, and that it would then require about 0.7 square meters (m2) of additional collector area for each additional person added to the calculations. It was also calculated that (for people who live in the "northern" United States) around 1.1 to 1.3 square meters (m2) for each person after the first 2 would need to be added to the previous calculation's values for the calculations to be accurate. 
Experts have established that, in the United States, for each 0.1 square meter (m2) of solar collector area used, a corresponding capacity of at least 5.7 liters will reduce any risk of overheating in the system when there is low requirement of hot water. It has also been suggested, in areas where the weather is mostly sunny and warm, that for each 0.1 square meters (m2) of solar collector area, the corresponding capacity should be changed to at least 7.6 liters. 
If a home is in the "northern area", in a warm sunny climate and has 3 residents
Solar Collector Area (m2)
Storage Tank Capacity (Liters)
() x (2) = 152
() x (2) = 152
1.1 to 1.3
() x (1.1) = 83.6
() x (1.3) = 98.8
5.1 to 5.3
387.6 to 402.8
Table : Brief Example Calculations
So it is found that these residents will require from 5.1 to 5.3 square meters of collector area and storage tank capacity of around 387.6 to 402.8, so they would require the large tank of capacity 454 liters.
The Benefits of SWHs
Solar water heaters have many benefits and the most important of them are:
While the economic benefits are not good compared to gas water heaters because of the obvious reason (cost) they have many long term benefits such as:
They have lower home energy consumption than electric water heaters.
Solar water heaters can save a lot of energy cost over their lifetime (save over 50% of annual energy cost when compared to electric water heaters ).
Well-designed systems can have a payback period of 4 to 8 years (depending on energy costs). 
Lifetime savings of about 15 to 40 years. 
Best for new home constructions.
Reduced Utility bills (Free hot water) after payback period.
Lowers the effect of fuel shortages and higher prices on the residents.
Increases the resale value of the home by the price of the system.
When using solar energy the amount of pollution that is emitted by the heating of water is reduced to zero (No Pollution).
Drawbacks of using SWHs
Higher initial cost
Less savings when compared to gas water heaters on a pound-by-pound basis.
In conclusion, solar water heaters have been around for a very long time, Nowadays the awareness of the need for alternative, renewable and sustainable energy is higher than ever before, and people should be given the chance to realize how much more beneficial these SWH systems are to them as well as to the environment. Although they may have a high cost compared to other water heating systems during installation and can have a payback period of up to 8 years, the benefits of using Solar Energy to heat water for homes far outweigh the drawbacks. Because the savings gained over the long lifespan of the systems are very high especially in this day and age when fuel costs and energy prices are rising. If people realize this then the whole nation would benefit as a whole and of course the environment will as well.