ADVANTAGES AND BENEFITS OF USING SOLAR WATER HEATERS
There are many benefits to owning a solar water heater and number one is economics. Solar water heater economics compare quite favorably with those of electric water heaters, while the economics aren't quite so attractive when compared with those of gas water heaters. Heating water with the sun also means long-term benefits, such as being cushioned from future fuel shortages, price increases and environmental benefits

* Economic Benefits
Many home builders choose electric water heaters because they are easy to install and relatively inexpensive to purchase. However, research shows that an average household with an electric water heater spends about 25% of its home energy costs on heating water.
It makes economic sense to think beyond the initial purchase price and consider lifetime energy costs, or how much you will spend on energy to use the appliance over its lifetime. It found that solar water heaters offered the largest potential savings compared to electric heating, with solar water-heater owners saving as much as 50% to 85% annually on their utility bills over the cost of electric water heating.
However, at the current low prices of natural gas, solar water heaters cannot compete with natural gas water heaters in most parts of the country except in new home construction. Although you will still save energy costs with a solar water heater because you won't be buying natural gas, it won't be economical.
Paybacks vary widely, but you can expect a simple payback of 3 to 8 years on a well-designed and properly installed solar water heater. (Simple payback is the length of time required to recover your investment through reduced or avoided energy costs.) You can expect shorter paybacks in areas with higher energy costs. After the payback period, you accrue the savings over the life of the system, which ranges from 15 to 40 years, depending on the system and how well it is maintained.
You can determine the simple payback of a solar water heater by first determining the net cost of the system. Net costs include the total installed cost less any tax incentives or utility rebates. After you calculate the net cost of the system, calculate the annual fuel savings and divide the net investment by this number to determine the simple payback.

* Tax Incentives and Rebates
In India some States offer subsidies on domestic as well as commercial solar water heating system installations. Government of India offers 100% depreciation claim in the first year itself on installation of commercial solar water heating systems.

*Long-Term Benefits
Solar water heaters offer long-term benefits that go beyond simple economics. In addition to having free hot water after the system has paid for itself in reduced utility bills, you and your family will be cushioned from future fuel shortages and price increases. You will also be doing your part to reduce this country's dependence on foreign oil. The National Remodelers Association reports that adding a solar water heater to an existing home raises the resale value of the home by the entire cost of the system. You may be able to recoup your entire investment when you sell your home.

* Environmental Benefits
Solar water heaters do not pollute. By investing in one, you will be avoiding carbon dioxide, nitrogen oxides, sulphur dioxide, and the other air pollution and wastes created when your utility generates power.
a solar water heater replaces an electric water heater, the electricity displaced over 20 years represents more than 50 tons of avoided carbon dioxide emissions alone. Carbon dioxide traps heat in the upper atmosphere, thus contributing to the "greenhouse effect."