Um! While I'm not sure of all the details, firstly labor costs are much lower, but secondly they take the heater water and run it down pipes that go down the outside of the building and in through a hole in the wall.

This may not be that bad for a single dwelling, but where you have a host of these pipes coming down from the roof of an apartment complex it is quite ugly. So I image that there is a significant installation cost in the US that goes toward making it a bit more aesthetic.

I did, however, having looked at the construction, ask the same question but the other way on, namely why are they so much more expensive than electric heaters. The answer that I got was due to the monopoly on manufacture, which is done by companies from abroad (mainly I think Japan, but I am not sure of that) who have control of the process.

Since I wrote the piece I took the train from Xining City to Shanghai, and we saw that while solar water heaters were not that common in the villages of Qinghai, as we descended into Xi'an and beyond they become much more prevalent and were about 50% likely to be on the top of apartment complexes in the larger cities.