Chris,
Thank you for this very cool idea. I'm new to this forum but have tried your suggestion after reading your post (which I found when boB linked to it from the Midnite website). I bought the same SSR as you suggested, and wired it to to the bottom element (240 v, 3500 watt) on my water heater. The top element is still on grid power but on a low temperature setting. I have a 4.1 KW solar array which is grid supported; i.e., it switches to grid power when the battery voltage drops below a certain threshold.
You're idea is working pretty well for me so far; I tend to have a lot of unused pv capacity in the afternoons. I have however encountered one problem, which is voltage drops and surges caused by the element cycling on and off. My inverter (a Magnum MS4448 PAE) is showing an AC voltage drop of about 17 volts (down to 103 VAC at the lowest) when the element kicks on, before bouncing back up. When I noticed this I disconnected some of my other loads, such as the fridge, to keep them from being damaged by the voltage swings.
Anyway, I'm wondering if you have encountered this and if you or anyone else here has any ideas to smooth the voltage. One thing I may try is to install a smaller element, which would probably help some.
Even if I can't eliminate the voltage swings, this is a really cool idea that has cost me almost nothing to try. If I can't manage to reduce the swings, I'll nonetheless likely put the relatively small household loads on the grid during sunny days and heat water instead, since this would almost certainly use more of the solar array's potential. So thanks again for sharing it.