The higher the solar energy factor, the more efficient the water heater. On the contrary, the more efficient the water heater system, the higher the price for installing it. In my last post’s example we knew that the SEF of the electric auxiliary tank system, which is 2.0, is higher than that of the fuel auxiliary tank system, which is 1.1. That means installing the electric auxiliary tank system will cost more than installing the other less effective system. However, it is not enough to only have the difference of the price of installing two systems to estimate the eventual total payback per year. In addition to compare the installing price, we still need to add the annual operating cost of the two system we figured out last time into the whole calculation:
Additional cost of more efficient system = Price of System Model B (or A) – Price of System Model A (or B)
Estimated annual operating cost savings = System Model B (or A) Annual Operating Cost- System Model A (or B) Annual Operating Cost
Payback period/years = $Additional Cost of Model B (or A) / $Model B’s (or A’s) Cost Savings Per Year
Based on your personal situation, calculating the payback period per year of the two system and comparing them. The shorter the payback period, the more economically efficient and appropriate for you.