Understanding Solar PV Hot Water Systems: A Homeowner’s Guide

Hot water is one of the largest energy costs in New Zealand homes, often accounting for around 25–30% of household electricity use. As more households install solar panels to reduce power bills, many homeowners are asking:
Can solar PV be used to heat water? The answer is yes — and there are several ways to do it.
Solar PV systems generate electricity during the day. Instead of exporting all of that energy back to the grid, homeowners can use it to heat water and increase the value of their solar investment.
There are several solar PV hot water system options available, depending on your existing hot water setup and your long-term energy goals.
This guide explains how solar PV hot water works, explores the different systems available, and helps you choose the right setup for your home. You can also explore Rinnai’s range of solar-compatible hot water solutions to see examples designed for New Zealand homes.

What is a Solar PV Hot Water System?

A solar PV hot water system uses electricity generated by solar panels to heat water stored in a hot water cylinder.

Solar photovoltaic (PV) panels convert sunlight into electricity. During the day, that electricity powers appliances in your home. If your solar system produces more electricity than your household is using, the extra power can be exported back to the grid or redirected to heat water.

A device called a solar PV hot water diverter can automatically send excess solar electricity to your hot water cylinder’s heating element. Some water heating systems already have this diverter built in, whilst on other systems a diverter can be added.

This allows your hot water system to store solar energy in the form of heated water, reducing the need for grid electricity.

Solar PV vs Traditional Solar Hot Water Systems

Solar PV systems are different from traditional solar thermal hot water systems.

Solar PV systems:

Generate electricity from solar panels
Electricity can power appliances or heat water
Most are grid-connected in NZ

Solar thermal systems:

Use roof collectors to heat water directly
Are dedicated to hot water only
Offer less flexibility

Because solar PV produces electricity, it provides more versatility for homeowners, allowing energy to be used across the home.

Is Solar PV Hot Water Worth It in NZ?

For many New Zealand homes, using solar power to heat water can be an effective way to reduce electricity costs. Making frequent use of the electricity your solar panels generate, rather than exporting it to the grid, is one of the best ways to maximise the value of your solar investment. Clever control systems can help by automatically directing available solar generation to your hot water system when it is most beneficial. Talk to your solar or hot water provider about the control options available for your home.

Hot water uses a significant portion of household energy, so directing solar electricity towards it can increase the value of your solar generation.

Solar PV hot water works especially well for homes that:

Have solar panels producing excess daytime electricity
Have large or growing households
Are upgrading or replacing a hot water system
Want to improve energy efficiency

Rather than exporting excess electricity to the grid for a lower return, using it to heat water can increase self-consumption and potentially deliver greater long-term savings.

Best Hot Water Systems That Work With Solar PV

If you’re installing solar or looking for the best hot water system with solar, there are three main options available.

Each solution offers different benefits depending on your home, hot water usage, and future plans.

The most common solar PV hot water solutions are:

Electric cylinder with a solar diverter
Heat pump hot water system with solar integration
Use a programmable timer to match hot water heating with solar production

Option 1: Electric Cylinder + Solar PV Hot Water Diverter

One of the easiest ways to use solar energy for hot water is installing a solar PV hot water diverter with an electric hot water cylinder.

A diverter monitors solar generation and household electricity usage. When excess solar electricity is available, it redirects that power to the cylinder element instead of exporting it to the grid.

This allows your hot water system to store surplus solar electricity as heat.

Benefits of a Solar Diverter

Simple upgrade for existing cylinders
Maximises solar energy usage
Reduces reliance on grid electricity
Stores solar power as hot water

Many solar diverters can also be programmed to fully heat the cylinder overnight, taking advantage of lower electricity prices if solar energy wasn’t sufficient during the day. This combination of solar self-consumption and smart load shifting can help maximise the value of your solar generation.

EECA research shows that households with higher electricity consumption can see stronger financial returns from solar PV, particularly when they can shift more of their electricity use to times when solar generation is available. The research also identifies hot water diverters and timers as a lower-cost way to improve the value of solar PV by using the hot water cylinder as a form of energy storage.

Read the full EECA Understanding the Value of Residential Solar PV and Storage in New Zealand study.

Simultaneous (SIM) and Non-Simultaneous (Non-SIM) Dual Element Hot Water Cylinders

The type of hot water cylinder can also influence how it works with a solar diverter.

SIM cylinders have a separate element arrangement that can allow solar-generated electricity to be directed to the upper or lower element, depending on the system and control configuration. This can provide greater flexibility when managing solar energy and hot water demand.

Non-SIM cylinders typically use a single element, so solar diverter operation is generally more straightforward, with the available solar energy directed to the cylinder’s heating element.

When selecting a cylinder for a solar PV system, it’s important to consider the cylinder type, element configuration, and compatibility with the chosen diverter or control system. Always check with the solar and hot water system provider to ensure the components are compatible and correctly configured.

Rinnai offers an extensive range of electric hot water cylinders, including mains pressure, low pressure and coiled-cylinder options, with a variety of capacities and element configurations. Selected Rinnai cylinders are suitable for use with solar and other alternative heat sources, making it important to select the right cylinder for the intended solar PV or solar hot water application.

Explore the Rinnai hot water cylinder range.

Option 2: Use A Programmable Timer to Match Hot Water Heating with Solar Production

A simple way to increase solar self-consumption is to schedule your hot water cylinder to heat during the part of the day when your solar panels are typically producing the most electricity.

For many homes, this means setting the cylinder to heat around the middle of the day rather than relying solely on overnight heating. EECA’s modelling uses an example timer window of 11am to 3pm, chosen because it is close to the middle of the day when solar generation is typically highest.

By pre-heating the water during periods of strong solar generation, the cylinder effectively acts as a form of thermal energy storage. The stored hot water can then be used later in the day and evening, reducing the need to purchase electricity from the grid.

However, the ideal timing will depend on your solar panel orientation, season, household electricity use, electricity plan, and hot water demand. A timer provides a simple scheduled approach, while a solar diverter can respond dynamically to actual excess solar generation.

Important considerations when using timers

Hot water heat pumps: Programmable timers should not be used to switch a hot water heat pump on and off unless specifically recommended by the manufacturer. Doing so can interfere with the heat pump’s in-built programming, controls and optimisation. Instead, use the unit’s own programming and solar-compatible control functions to manage when it operates.

Legionella protection: When using a timer to limit when an electric hot water cylinder heats, provision must be made to ensure the stored water is heated sufficiently to control the growth of Legionella bacteria. New Zealand Building Code guidance requires hot water to be stored at a minimum of 60°C for Legionella control.

Depending on the cylinder and system configuration, this may be achieved through regular high-temperature heating cycles. Some NZ guidance for solar water-heating systems provides for the stored water to be heated to 60°C or higher for at least one hour once a week as one method of Legionella control. The appropriate method will depend on the specific cylinder and installation, so always follow the manufacturer’s instructions and have the system configured by a qualified installer.

It is also important to distinguish the 60°C storage temperature from the temperature delivered at the tap. Temperature control devices are required to manage the risk of scalding at outlets.

Smart controls can provide an even more flexible approach, automatically adjusting hot water heating to make better use of available solar power. Talk to your solar and hot water provider about the control options that are compatible with your system.

Option 3: Heat Pump Hot Water System with Solar PV Integration

Another highly efficient option is pairing solar PV with an energy-efficient hot water heat pump system.

Hot water heat pump systems operate differently from traditional electric cylinders. Instead of heating water directly with electricity, they extract heat from the surrounding air and transfer it into the water.

This process allows heat pumps to use up to 75% less electricity than standard electric cylinders.

When paired with solar PV, the efficiency increases even further.

Benefits of Hot Water Heat Pump + Solar

Extremely energy efficient
Lower mains electricity consumption
Lower solar energy consumption
Can run using solar-generated electricity
Ideal when replacing an old cylinder

For example, both the Rinnai HydraHeat® Hot Water Heat Pump range & the Rinnai Enviroflo™ Hot Water Heat Pump range are designed for New Zealand homes and can integrate with solar PV systems to deliver efficient hot water year-round.

Combining solar generation with heat pump efficiency can significantly reduce long-term hot water energy costs.

Solar Diverter vs Heat Pump vs Timer-Controlled Cylinder

Choosing the best solar PV hot water solution depends on your household energy needs, budget, solar generation, and existing hot water system.

Option	Best For	What it Does
Cylinder + Solar Diverter	Homes with a working cylinder wanting to maximise solar self-consumption.	Automatically redirects available excess solar electricity to heat water, helping make the most of solar generation.
Hot Water Heat Pump System	Homeowners replacing a hot water system and wanting maximum energy efficiency.	Extracts heat from the air and uses electricity very efficiently, while compatible systems can be controlled to make use of available solar generation.
Timer-Controlled Cylinder	Homes wanting a simple, cost-effective way to shift hot water heating to daylight hours.	Schedules the cylinder to heat during periods when solar production is typically highest, helping increase solar self-consumption and reduce reliance on grid electricity.

A timer can be particularly useful where a solar diverter isn’t required or isn’t compatible with the existing cylinder. The ideal heating period will depend on the home’s solar panel orientation, season, electricity use and hot water demand.

If you’re unsure which system is right for your home, it’s best to talk to a Rinnai installer who can recommend the most suitable setup for your home and solar system.

Solar PV Hot Water FAQ

What size hot water cylinder do you need for solar PV?

There is no one-size-fits-all cylinder for solar PV. The right size should primarily be based on your household’s hot water demand, rather than the size of your solar PV system.

As a general guide, a smaller household may only need around 135–180 litres, while larger households may require 250–300 litres or more. Rinnai’s cylinder sizing guidance recommends approximately 135 L for up to three people, 180 L for four people, 215 L for five people, 250–270 L for six people and 300–340 L for seven people.

However, when using solar PV, a larger cylinder can provide more thermal storage, allowing you to heat more water during periods of strong solar generation and use that hot water later when the sun isn’t shining. This needs to be balanced against the additional energy required to heat and maintain a larger volume of water.

The cylinder’s element configuration and compatibility with solar diverters or timers are also important considerations. For example, selected Rinnai cylinders are available with solar-compatible configurations and eco inlets for connection to solar or other heat sources.

For the best result, have your installer consider household size, hot water demand, solar PV generation, cylinder capacity, and available control options together when selecting a system.

How long does it take solar power to heat a hot water cylinder?

How long it takes to heat a hot water cylinder using solar PV depends on several factors, including the cylinder size, how much hot water is already available, the element size, the amount of solar power being generated and the weather.

For example, a cylinder with a larger element and strong midday solar generation will heat more quickly than one receiving limited solar power on a cloudy day. A solar diverter can continuously adjust the amount of solar power sent to the cylinder based on how much excess generation is available, while a timer will operate the cylinder during a programmed period.

Rather than focusing on a specific heating time, the goal is to use the strongest period of solar generation to pre-heat your hot water, storing that energy as hot water for later use. EECA recommends using a timer or solar diverter to heat water during daylight hours, helping turn an existing hot water cylinder into a simple form of energy storage.

Your solar and hot water installer can help determine the most suitable heating schedule, cylinder size, and control system for your household and solar PV system.

How much can solar reduce hot water heating costs?

The amount you can save by using solar PV to heat your hot water will depend on how much solar electricity your system generates, how much hot water your household uses, when your cylinder heats, and how much of your solar generation you can use in the home.

Hot water is a significant household energy use, so shifting hot water heating to periods of strong solar generation can make a meaningful difference to the amount of electricity you need to buy from the grid. EECA research highlights self-consumption of solar generation as an important factor in reducing electricity costs, with hot water timers and diverters providing a relatively low-cost way to use an existing cylinder as thermal energy storage.

For example, EECA modelling found that a typical home with electric hot water can increase solar savings by using a timer or diverter to pre-heat water during daylight hours. The actual savings will vary from home to home and will be lower during periods of reduced solar generation, such as winter.

For a more accurate estimate, consider your solar PV system size, annual electricity use, hot water demand, cylinder size, electricity tariff and the type of solar control system being used. EECA’s Solar Payback Calculator can help estimate potential savings for your particular home.

What happens to hot water on cloudy days?

Your hot water system will continue to operate on cloudy days, but your solar panels will generally produce less electricity than they do in bright sunshine. If there isn’t enough solar generation available to heat the water, an electric hot water cylinder can automatically draw electricity from the grid to maintain the required hot water supply.

This is where timers, solar diverters and smart controls can help. On days when solar generation is available, they can prioritise heating the cylinder during the daytime, allowing the hot water to act as a form of thermal energy storage. When solar generation is insufficient, the system can use grid electricity to top up the cylinder as required.

For hot water heat pumps, cloudy weather has less direct impact. Unlike solar PV panels, heat pump water heaters extract heat from the surrounding air, so they can continue heating water when it is cloudy or raining. They can also be programmed or controlled to make use of available solar electricity when conditions allow.

The key is to have a system that can adapt to changing solar generation, rather than relying on solar power alone to provide hot water every day.

What is the difference between solar hot water and photovoltaic?

While both use energy from the sun, solar thermal and solar photovoltaic (PV) systems work in different ways.

Solar hot water, or solar thermal, uses the sun’s heat directly. Solar thermal collectors are installed on the roof and transfer heat from the sun to water stored in a hot water cylinder. The system is specifically designed to heat water.

Solar PV panels convert sunlight into electricity. That electricity can then be used throughout the home to power appliances, including an electric hot water cylinder or hot water heat pump. With a timer, solar diverter or smart control system, hot water heating can be scheduled or automatically adjusted to make greater use of available solar generation.

For many homeowners, solar PV provides greater flexibility because the electricity generated can be used for hot water as well as other household appliances, EV charging, and other electrical loads. It can also be combined with a hot water heat pump to make the most of the available solar electricity.

In simple terms: solar thermal uses sunlight to heat water, while solar PV uses sunlight to generate electricity that can be used to heat water and power your home.

Turn Your Solar Power Into Hot Water Savings

Installing solar panels is a great step towards reducing energy costs — but making the most of the electricity your panels generate is key to maximising your investment. Using that energy to heat hot water can be an effective way to increase solar self-consumption and reduce the amount of electricity you need to buy from the grid.

Whether you choose a solar diverter with an electric cylinder, a timer-controlled cylinder that heats during periods of peak solar generation, or a solar PV-compatible hot water heat pump, there are several ways to turn your solar generation into useful hot water.

Rinnai offers a range of hot water solutions for New Zealand homes, including solar PV-compatible hot water heat pumps and electric cylinders that can be integrated with solar diverters and control systems.

The right solution will depend on your household size, hot water demand, existing system, solar PV setup, and budget. A professional installer can assess these factors and recommend a system and control strategy that helps you make the most of your solar power, while ensuring reliable hot water year-round.

If you’re installing solar PV or upgrading your hot water system, talk to a Rinnai installer about the options available for your home.