The heaters, the first of their kind in Yellowknife, were tacked onto the side of a public housing unit and could reduce the cost of hot water by 50 per cent.
"The Kyoto (Protocol) has changed the way we do business," said Dennis Bevington, an advisor to the Energy Secretariat.
"We need to look into more efficient and cost effective ways of doing things."
The new units, which cost roughly $3,000 each, convert the sun's rays into heat and warm water stored in a holding tank.
"It's an interesting system," said Bevington.
"The technology has existed for a while, but it's only now becoming affordable."
The solar-powered water heater compliments existing oil and electric water heating systems.
When the skies are clear and the days long, it can heat enough water for a family of four by itself.
But during the winter, conventional systems do most of the heating.
Bevington, said the system could save a typical family up to $500 a year on the their power bill.
At roughly $3,000 per unit, the system would pay itself in about five years at current electric rates .
Bevington said that makes it a sound investment for home owners and business.
"The long-term benefits are pretty clear. Not only do people save money... but it's better for the environment," he said.
This will be the first time this particular system has been tried in the NWT, but Bevington is confident that it can stand up to Northern winters.
"It was tested in temperatures as low as -40 degrees Celsius and there were no problems," he said
The GNWT purchased five solar-powered water heaters and plans to install at least two in Fort Simpson. Officials aren't sure where the last one will be installed.