Active water heaters use solar panels or collectors to trap the sun's heat. Water running through the collectors increases in temperature as it absorbs heat. The warmed water is then pumped to a storage tank. These systems are called "active," as opposed to "passive" because they use electric pumps to move the water from the collectors to the storage tank. In passive systems water moves naturally because of a temperature difference.

Active systems cost from $2,000 to $6,000 and can supply up to 70 percent of a family's annual hot water needs. In the right climate and with the right usage, the monthly savings on hot water costs can add up to a handsome return on investment.