A solar heating system collects the sun’s energy to heat water or another heat transfer fluid. The water or other fluid then transfers solar heat directly or indirectly to your home, water, pool or industrial process. A solar water heater is a very good investment. Although solar water heaters cost more initially than conventional water heaters, the fuel they use, sunshine, is free. To take advantage of solar energy you need to have an un-shaded area, such as a roof, that faces north, northeast or northwest.