For most Canadian homes today, solar PV (panels that make electricity) is the more flexible and popular choice, while solar hot water (thermal collectors that heat water directly) makes the most sense for households with high, steady hot water use. Solar thermal is very efficient at capturing sunlight, but it can only do one job. PV electricity can run anything, including a heat pump water heater, which has changed the math for many homes.
Key takeaways
- Solar thermal collectors convert sunlight to heat far more efficiently than PV panels convert it to electricity, so they need less roof space.
- PV is more versatile: its electricity can power any appliance, an EV or a heat pump, and extra power can earn net metering credits.
- In Canada, solar hot water systems typically cover a meaningful share of annual water heating, not all of it, so a backup heater stays in place.
- Pairing PV with a heat pump water heater is now a strong alternative to solar thermal.
- Large families, multi-unit buildings, pools and businesses with heavy hot water use are where solar thermal shines.
How each technology works
Solar hot water (solar thermal)
Solar thermal collectors absorb sunlight and turn it into heat. In Canada, most systems use a closed loop filled with a glycol (antifreeze) mix that carries heat from the roof to a heat exchanger in a storage tank. Your existing water heater then tops up the temperature when needed.
There are two main collector types:
- Flat-plate collectors: a dark absorber plate under glass. Durable and cost-effective.
- Evacuated-tube collectors: rows of glass tubes with a vacuum for insulation. They hold heat better in cold weather and at low sun angles.
Solar PV (photovoltaic)
PV panels turn sunlight directly into electricity. An inverter converts it to household AC power. That electricity runs whatever is on at the moment, and in most provinces, any surplus flows to the grid for credits under net metering. Our solar page explains PV in more detail.
Side-by-side comparison
| Factor | Solar hot water | Solar PV |
|---|---|---|
| What it produces | Heat for water (sometimes space heating) | Electricity for any use |
| Sunlight-to-useful-energy efficiency | High (often 50%+ of sunlight captured as heat) | About 18–23% for modern panels |
| Roof space needed | Small (2–3 collectors for a household) | Larger (often 15–25 panels for a typical home) |
| Moving parts | Pump, valves, controls | None on the roof; inverter on the wall |
| Maintenance | Glycol checks and pump service every few years | Very low |
| Surplus energy | Can overheat in summer; must be managed | Exported to grid for credits |
| Approximate installed cost (home) | Roughly $6,000–$12,000 | Roughly $15,000–$30,000 for a typical system |
| Typical lifespan | 20–25 years for collectors | 25–30+ years for panels |
Costs are approximate Canadian ranges and vary by home and region.
The efficiency paradox
Solar thermal wins on raw efficiency per square metre. So why is PV more common?
- Flexibility. PV electricity can run anything. Solar heat can only heat water (or air).
- Seasonal mismatch. Solar hot water produces the most heat in summer, when you need it least. Without a use for the surplus, it's wasted. PV surplus goes to the grid.
- Simplicity. PV has no fluids or pumps on the roof. Fewer things to service.
- Falling PV prices. PV costs dropped dramatically over the past 15 years, while thermal costs stayed comparatively steady.
- Heat pump water heaters. A heat pump water heater uses roughly a third as much electricity as a standard electric tank, so a few PV panels can supply it.
When solar hot water makes sense
Solar thermal is still a great choice when:
- Hot water use is high and steady: large families, multi-unit residential buildings, laundromats, care homes, campgrounds.
- You heat a pool. Simple unglazed pool collectors are among the most cost-effective solar technologies there are.
- Roof space is limited and you want the most energy out of a small area.
- Your water heating uses expensive fuel, such as propane or oil, where the savings per unit of heat are larger.
When solar PV makes more sense
PV is usually the better fit when:
- You want to offset your whole electricity bill, not just water heating.
- You already have, or plan to get, a heat pump, EV or heat pump water heater (see our heat pumps and geothermal guide).
- Your province has net metering that credits surplus power.
- You prefer a low-maintenance system.
Winter performance in Canada
Both technologies produce less in winter because of shorter days, lower sun and snow.
- Solar thermal: evacuated tubes do better in cold, but output in December and January is low. Glycol loops prevent freezing.
- PV: panels actually run more efficiently in the cold, but snow cover and short days limit production. Annual totals, balanced through net metering, matter more than any single month.
A note on the whole-home picture
If you're deciding between the two, step back and think about your upgrade order. Air sealing and insulation, then efficient heating and water heating, then generation, is often the most cost-effective sequence. Our whole-home upgrade guide walks through it. Programs and incentives change, so check what's available at your address with the rebate finder.
Frequently asked questions
Can I have both solar hot water and solar PV?
Yes. Some homes use a couple of thermal collectors for water and PV for everything else. It does mean two systems to maintain, so it's most common where hot water demand is high.
Will solar hot water work in a Canadian winter?
Yes, with a properly designed glycol system, though winter output is much lower. A backup water heater handles the shortfall, which is why savings are measured over the full year.
Is a heat pump water heater better than solar hot water?
It depends on your home. A heat pump water heater is simpler and works year-round, while solar thermal uses free heat but costs more to install. Paired with PV, a heat pump water heater is a popular option today.
The bottom line
Solar hot water is efficient and proven, and it still shines where hot water demand is high. For most Canadian homes, though, solar PV offers more flexibility, less maintenance and pairs nicely with heat pump technology. Think about how your household uses energy, where you're headed with heating and transportation, and pick the system that fits the whole picture.
Sundamentals is an independent, non-profit education platform. Program details and prices change often — check current programs for your address in our rebate finder.