[NautiNurse]

All the tax credits do is artificially inflate the solar costs

Amen to that. When the useful life of my solar water heater expired, replacement scheme with rebate was triple the original cost. No thanks, I said.

[Tell It Right]

Instead of a solar water heater I opted for a hybrid water heater, since I was replacing my gas water heater anyway. The hybrid water heater has a built-in heat pump that runs when the water tank gets cool (i.e. when my my wife and I shower in the morning). It pulls in air, extracts the heat and uses the heat to raise the water tank temp (I have it set to 135), then spits out free cold air.

The air intake vent has a duct coming from the attic (read: warm air that's easy to draw heat from). Might as well take advantage of the free warm air in the attic to heat the water tank. The air output drops free cold air into the closet the water heater is in; that cold air is picked up by a HVAC receiver in the floor. Might as well use the free cold air to help cool the house so the A/C doesn't have to run as much. (During the winter months I flip a duct lever and duct the cold air into the attic so that the cold air isn't fighting my home heating.)