Cost analysis

Note. In this analysis, we do not count on government incentives for green energy. The solar energy cost is now too low to need such incentives. By the way, the very existence of the technology will make the governments cut off these incentives in the near future.

The basic price line of the new solar technology is 20€/m² for collector wholesale price excluding transportation and sales taxes, that can be reached within a few years of commercialization. To this, a thermal storage cost of about 5€/m² should be added for a storage capacity of one full day. See the supplier list.

As the collectors are shipped flat with a weight of about 6kg/m², international transportation is limited to a few euros per m². On the other hand, thermal storage devices must be produced locally because of the heavy weight.

Installation cost will be low, as the collectors need few or no field adjustment. The collectors will be pre-adjusted in the factory when necessary.

Therefore, the installed cost can be estimated to be around 50€/m² for large or medium size installations. Installed in individual homes, this cost should be below 100€/m², unless for difficult installations such as sloped rooftops.

If photovoltaic receiver is used, the estimated price add-on is about 0.5€/W.

The overall thermal efficiency of the collectors will be as high as 75% for low temperature applications, or about 65% for high temperature (250°C-350°C) applications. See here for detailed analysis and comparison with classical parabolic troughs.

The annual thermal energy output of one m² of collector surface depends heavily on the location of its installation. It goes from highly insolated desert areas used for large scale power generation with up to 1700kWh/m², down to less than 400kWh/m² for unfavorable regions with high latitude.

Do not confuse this value with the annual productivity of non-concentrated solar water heaters! Explanations.

If we put an average value of 1000kWh/m² and a discount rate of 10% for a primary comparison with other energy sources, we get a levelized wholesale thermal energy cost of 0.5c/kWh.

On the other hand, we take the average 2006 price for fossil energy in our crice comparison, to avoid the recent huge price fluctuations. Cost and efficiency of burners are taken into account. See this page for a reference.

• Home water heating. We can use the value of 600kWh/m² consumed annual heat, noting that solar heat will not be 100% consumed, as during continued sunshine, the capacity of the water tank will be exceeded and the collector capacity will be wasted. It brings a cost of 1c/kWh, which almost means "free" compared to other consumer energy prices.

  Here we do not include the price of the water tank, because electric water heater tanks can be reused. Moreover, a dual heating water tank costs about the same as an electric-only tank.

  This computation also applies for "hidden" water heating needs in the home, such as clothes washer, dryer and dish washer. These machines can be branched to the hot water outlet of the solar equipment, saving most of the electricity consumption. An absorption refrigerator falls also into this category.

  Solar systems installed under very unfavorable conditions such as locations near the arctic circle will give lower annual output, driving the cost higher, up to 2c/kWh. It is still an irresistible cost level.

• Home cooking. Using a high temperature heat source, this shares the same cost analysis with the above.

• Home space heating. This is much more difficult than water heating, as the collecting capacity is only used during a limited period of the year, which is moreover the most difficult period for solar energy collection. So the production of a space heating-only collector will go down to about 150-200kWh/m² for many regions. This corresponds to a cost of 3-4c/kWh, higher than the above but well below other heating methods.

  Note that for space heating, the parabolic trough may have a great advantage with respect to non-concentrating collectors, due to its much lower thermal loss and internal heat capacity.

  My test shows that even if the daily maximal height of the Sun is as low as 23° above the horizon, the collector can still produce up to 2kWh/m² a day. So even if the collector is installed at a location of latitude as high as 55°, it still can be used with high efficiency except during December and January. Thus the great majority of populated zones on Earth can use it for space heating.

• Home space cooling by an absorption cooler. In most cases, this will be done with the same collecting capacity as for space heating in the winter, therefore will bring no extra cost but for the air conditioner.

• Home pool heating. As pool heating is only useful when space heating is shut off or reduced, this is complementary to space heating exactly in the same manner as space cooling.

• Home photovoltaics. The electricity should only pay for the photovoltaic receiver, as the heat output is still there and will pay for the collector itself.

  The annual production is usually 1-1.5kWh per watt of capacity. The cost is therefore 2-3c/kWh of electricity, beating heavily the grid price. But this method produces electricity only during sunshine, and the battery will drive the cost to a much higher level.

• Home thermoelectric electricity. The estimated price of the semiconductor thermoelectric module is 0.5-1€/W. The efficiency is low, but with thermal storage, the capacity factor is much higher, so the annual production will be around 5kWh/W, and the electricity generation is round the clock. The electricity cost is therefore 0.6-1.2c/kWh, an unheard-of level for consumer electricity.

  It should be noted that this method may not last long. With limited tellurium resources in the world, the production capacity should be quite limited with respect to the potential market.

• Home turbine electricity generation. I have no reliable source for a price estimation. This is now important, for many collecting capacities will sit idly during non-winter seasons.

• Local medium size heat and power cogeneration. The reasonable average annual output to expect is 150kWh electricity and 500kWh heat per m² of collector, to which a cost of 50€ should be added for the turbine. Therefore each package of 1kWh electricity plus 3.3kWh heat costs 7c. At current grid price, this can be recovered by the selling of electricity alone. However, the cost of heat distribution is hard to evalue.

• Large scale power plant near densely populated area. Locations for this can be selected so that annual thermal collection is not far below 1000kWh/m². At a working temperature of 350°C, a net heat to electricity efficiency of 35% can be reached. That gives 350kWh/m² annual electric output, or 1.4c/kWh. To this, 1c should be added for turbine cost and maintenance, so the total cost is 2.4c/kWh. This is a highly competitive level.

  With a sufficient thermal storage capacity, this method can be used both as base load or as load follower.

• Large scale power plant in a highly insolated desert. The annual electricity output can reach 550-600kWh/m². As the turbine cost and maintenance can be reduced to 0.7c due to increased capacity factor, the total cost can be brought down to 1.6c/kWh. However, long distance electric transmission is not very cost effective. This method can be used for grid balance and the production of renewable fuels.

  Here is a cost comparison with existing solar power plant technologies.

• Solar synthetic fuel production. At the current level of technology, the electricity to fuel transformation efficiency is probably as low as 40%. So the energy part of the cost is 4c/kWh, to which one should add 2c for the cost of the CO₂ capture and the chemical plants. The total cost is then 6c/kWh, equivalent to that of petroleum but well beyond natural gas and coal.

  On the other hand, we have seen oil price going to over 10c/kWh, and the economy has survived. So what is important is that the governments tax fossil fuels to the point that allow solar synthesized fuel to compete favorably. Current European oil taxes are already at sufficient levels for this purpose.

• Desalination of sea water, desert irrigation and biomass production. According to data available to the author, 1 kWh of electricity can produce enough fresh water to irrigate the field and produce 2 kWh worth of biomass. But the desalination plant is still quite costly, so that the energy part of the biomass cost will be about 2-3c/kWh. Then another 2-3c/kWh may be needed to cultivate and extract the biomass, so the final cost is 4-6c/kWh. This is quite similar to the above case, but the potential of improvement is much more important.