Solar thermal systems are divided into three categories, according to the U.S. Energy Information Administration: low, medium and high. Low-temperature systems, which are most frequently used to heat swimming pools, can heat water up to 110 degrees. Medium-temperature systems, often used domestically to heat the water used for your shower or for washing dishes, can heat water to between 140 and 180 degrees. And finally, high-temperature systems, which refer to utility-scale projects, can heat water to a temperature exceeding 180 degrees.
In most domestic solar-thermal systems, water or another heat-transfer fluid is pumped through the solar thermal panels to be warmed. When water is used, it is returned to the domestic water heater to mix with the water already held there. If a synthetic heat-transfer fluid is used, the heated fluid returns to the water heater in a closed system, transferring its heat to the water in the tank before being pumped back to the solar collector.
Because it's not always sunny, solar thermal systems typically have a backup heating system that can kick in when the water in your tank isn't warm enough. The backup heating system is often similar to a standard electric water heater.
Most solar thermal systems that are installed on homes cost between $2,000 and $4,500, according to the National Renewable Energy Laboratory. But the system may cut your bill for heating your water by as much as 80 percent. According to NREL, installing a solar thermal system can also offset between 40 and 100 percent of the carbon emissions of a passenger car.