We've been wondering some more about the case for switching to solar thermal or geothermal to supplement our domestic hot water system (DHWS). Our existing power vented DHWS was installed in 2001 at the same time as our new boiler.  It's a gas-fired 40 gallon tank with a a 0.59 EF (Energy Factor) rating. (It took a visit to the manufacurer's website to find out the EF. This standard was set in 2004, and therefore was not in effect when we had installed our existing system).

Now the feds will provide a grant to replace our existing hot water heater with either a solar domestic hot water system; or an instantaneous gas water heater or a condensing water heater with an EF of 0.80 or better.  The solar DHWS (which really can only be used as a pre-heating system) might reduce our gas energy load on the existing system by 15-20%, but it uses electricity to run. The others choices could supposedly give us a 21% or more energy savings. Here's NRCan's description of the various types of DHWS. 

More on water heater efficiency and how to upgrade existing systems to conserve energy can be found at the Energy Efficient Rehab Advisor, which has this to say:

The energy efficiency of a storage water heater is indicated by its energy factor (EF), an overall efficiency based on the use of 64 gallons of hot water per day. The first national appliance efficiency standards for water heaters took effect in 1990. New standards, which took effect in January 2004, increased the minimum efficiency levels of water heaters.

The most efficient gas-fired storage water heaters have energy factors ranging from 0.63 to 0.67, corresponding to estimated gas use below 170 therms/year. Condensing water heaters have energy factors as high as 0.86. The most efficient electric storage water heaters have energy factors ranging between 0.93 and 0.95, resulting in estimated annual energy use below 4,725 kWh/year. There is little difference between the most efficient electric resistance storage water heaters and the minimum efficiency standard...

So, it would appear that if we could use solar to preheat our water, we would have to use the existing storage tank and perhaps couple it with an on-demand tankless hot water heater.

I checked into the condensing water heater which is best suited to larger homes with deep soaking tubs, radiant heat flooring and steam showers. "Combines higher input with more efficient combustion to produce much more hot water with lower operating costs." This is not our case nor where we are headed in terms of reducing our energy usage.

I priced two Bosch on demand (instantaneous) tankless hot water models with an EF of 0.80: the Bosch 1600H at $939 which can be used for 1 major appliance at a time and the Bosch 2400E at $1500 with which you can take 2 showers at a time. Estimated annual savings are US$135 to $151 respectively. The Bosch site has a comparison chart with estimated operations and annual savings costs. It would take about 7 to10 years to achieve payback. Less in our case, since we aren't heavy hot water users and it would be eligible for the $300 ecoENERGY rebate.

Knowing this then, the solar thermal system would appear rather redundant unless it happened to be a combi system (combined domestic hot water and hot water heating). However, we're still waiting for Solera to measure our solar path so we can determine whether solar thermal or solar photovoltaic is a reasonable option for our location.