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Solar Water Heating Case Studies: Los Angeles, New York, Boston 100 Unit Apartment Buildings

We really have a difficult time understanding why there aren’t more residential buildings in the United States with solar water heating systems. They’re very common all over the world, especially in China, Europe, and Israel. Our only guess is that the U.S. building owners and managers are simply unaware of the  short payback period, especially with the new incentives.

The reason the investment is so worth-while is that most apartment buildings have centralized boilers, and therefore include hot water costs as part of the rent. Consequently, many building owners are paying the full gas or oil heating costs for their tenants daily use of hot showers, dishwashers, and laundry loads. With a solar hot water system, landlords could be saving thousands every month, thus earning more profit per apartment.

Using our Free Hot Water solar thermal calculator, we wanted to see the payback time, annual savings, and net costs on an example of a 100 unit apartment buildings in three major cities across the U.S.

We chose Los Angeles, New York, and Boston with the assumption that the building is owned by a for-profit entity/owner-operator and that gas utility prices are similar in each city. All prices are estimated retail prices, not discounted installer prices.

Based on current rebates and incentives, here’s a quick summary of what we’ve found:

  Boston Los Angeles New York 


Net cost after rebates and incentives $30,231 $38,079 $77,723
Estimated annual savings $11,251 $11,251 $11,251
Estimated payback time 2.69 years 3.38 years 6.91 years


Just as we suspected, it makes very little financial sense to keep paying full utility prices for apartment buildings, even in colder climates like New York and Boston. Monthly savings can be applied toward any needed loan payments. Also, remember that solar thermal systems last 25 years with very little maintenance, so the Internal Rate of Return (IRR) will be even greater, especially as gas utility rates rise in the coming years.

Please note: Aside from the rebate, building owners should consult with their tax advisers on how best to take full advantage of current Federal and State solar tax incentives.

You can recreate the same results on our calculator and get a more detailed (retail) quote. Simply input “Apartment” at the top of the form, “100” for the number of units, and then input the respective state, either CA, MA, or NY. Otherwise, if you have further questions, please feel free to contact us.

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