1. Energy in sunlight is absorbed by the solar collector, heating up the liquid inside.
2. The heated liquid is transferred back to the hot water tank by the circulation pump.
3. Throughout the day solar energy gradually raises the temperature in the hot water tank.
4. If the solar energy is not sufficient to provide hot enough water, a backup energy source (electricity, gas, oil etc) is used to further heat the water.
The same basic system design shown in the residential system below is applicable to commercial projects, just with more collectors, more powerful circulation pump and more hot water storage capacity. Commercial solar hot water systems are normally configured to provide "pre-heated" hot water to the existing boiler equipment.