Energy consumption in India is massive, and even the quantity used for household tasks is substantial. The majority of the requirement is satisfied by using fossil fuels, which are the traditional methods. Heating water is the most frequent home application. Accordingly, this article examines studies from the previous ten years. The information in this article demonstrates that using renewable energy is the greatest way to cut back on both the use of fossil fuels and carbon emissions while heating water for residential use. Solar, hydroelectric, wind, and biofuels are the most significant renewable sources for improving building efficiency that can be used for an extended period of time. The solar water heater is a common example of how solar energy is being used in homes more frequently. In order to identify key issues and solutions related to employing solar water heaters as an effective water heating application in both commercial and residential buildings, this article compiles research data from earlier studies (2012–2022). The literature survey was carried out using Scopus, a specialized database. Sixty-six dedicated research publications having search keywords plus recently published articles that matched the inclusion criteria were chosen for this review study. The study’s findings show that there is a greater inclination of researchers towards research and development in the field of domestic solar water heaters. The research publications that are being presented are all from the past 10 years (2012–2022) and stress the use of solar energy in increasing building efficiency. The study highlights how flat plate solar collectors with distilled water as the heat transfer fluid and a phase-changing substance as the thermal energy storage could potentially be enhanced. The thermal conductivity of paraffin wax and distilled water was improved by 75% of the researchers by using 0.05 to 0.5% concentrations of Al and Cu oxide nanoparticles, making it useful in solar water heaters. A total of 78% of researchers are interested in domestic water heating applications since they use a lot of energy in both urban and rural settings.