I am not really one to quote from a Tertiary source, but in this case Wikipedia has a great section on Solar Water Heating systems. I have found the posted info to be quite thorough and accurate. Read the full article and post your thoughts in the blog.
Solar water heating or solar hot water is water heated by the use of solar energy. Solar heating systems are generally composed of solar thermal collectors, a fluid system to move the heat from the collector to its point of usage. The system may use electricity for pumping the fluid, and have a reservoir or tank for heat storage and subsequent use. The systems may be used to heat water for a wide variety of uses, including home, business and industrial uses. Heating swimming pools, underfloor heating or energy input for space heating or cooling are more specific examples.
In many climates, a solar hot water system can provide up to 85% of domestic hot water energy. This can include domestic non-electric concentrating solar thermal systems. In many northern European countries, combined hot water and space heating systems (solar combisystems) are used to provide 15 to 25% of home heating energy.
Residential solar thermal installations can be subdivided into two kinds of systems: passive (sometimes called “compact”) and active (sometimes called “pumped”) systems. Both typically include an auxiliary energy source (electric heating element or connection to a gas or fuel oil central heating system) that is activated when the water in the tank falls below a minimum temperature setting such as 50¡C. Hence, hot water is always available. The combination of solar water heating and using the back-up heat from a wood stove chimney to heat water can enable a hot water system to work all year round in cooler climates, without the supplemental heat requirement of a solar water heating system being met with fossil fuels or electricity.