Solar Thermal Is Really, Really Dead
A new analysis shows how much cheaper it is to heat water with PV modules than with solar thermal collectors
Back in early 2012, in an article called “Solar Thermal Is Dead,” I announced that “it’s now cheaper to heat water with a photovoltaic(PV) Generation of electricity directly from sunlight. A photovoltaic cell has no moving parts; electrons are energized by sunlight and result in current flow. array than solar thermal collectors.”
Now that almost three years have passed, it’s worth revisiting the topic. In the years since that article was written, the cost to install a photovoltaic (PVPhotovoltaics. Generation of electricity directly from sunlight. A photovoltaic (PV) cell has no moving parts; electrons are energized by sunlight and result in current flow.) system has dropped significantly. Moreover, I’ve come across monitoring data that allow for a more accurate estimate of the amount of electricity needed to heat water with electric resistance elements or a heat pumpHeating and cooling system in which specialized refrigerant fluid in a sealed system is alternately evaporated and condensed, changing its state from liquid to vapor by altering its pressure; this phase change allows heat to be transferred into or out of the house. See air-source heat pump and ground-source heat pump..
First, I’ll present my assumptions.
How much does a solar thermal system cost?
In my earlier article, I estimated that a residential solar thermal system with two 4' by 8' collectors and a solar storage tank with a capacity in the range of 80 to 120 gallons costs between $8,000 to $10,000 to install. I stand by that estimate.
Of course, some contractors can beat this price, while others will charge significantly more. (In a recent comment posted on GBA, an Ohio-based solar contractor named Daniel Young estimated that the solar thermal system I describe would cost $16,250.) For the purposes of the comparisons made in this article, I’ll assume that the installed cost of a residential solar thermal system is $9,000.
How much does a PV system cost?
My calculations are based on a PV system cost of $3.74/watt. The figure comes from a the “Solar Market Insight Report 2014 Q2” published by the Solar Energy Industries Association.
Some GBA readers have received quotes of $3.50/watt for a PV system, while others are still paying $4.00/watt or more. One thing’s for sure: prices for PV are still dropping.
The price comparisons made in this article do not include any incentives, rebates, or tax credits.
How can I determine the annual electricity production of a proposed PV system?
The easiest way to figure out how many kWh will be produced each year by a PV system is to use a free online calculator called PVwatts. The calculator allows users to change a number of parameters, including geographical location.
How much does a water heater cost?
Installation costs vary from region to region. This article assumes that the installed cost for an electric-resistance water heater is $1,200, and the installed cost of a heat-pump water heater is $3,000.
Of course, your local costs may be higher or lower than these figures.
How many gallons of hot water per day does the average family use?
According to a Canadian study, the average Canadian family uses 44 gallons of hot water per day. The Canadian researchers’ findings mirror those of several U.S. researchers; there is growing evidence from monitoring studies that the assumption used in the DOE’s Energy Factor test for water heaters — namely, that an American family uses 64 gallons of hot water per day — is unjustifiably high.
This article assumes that the average North American family uses 44 gallons of domestic hot water per day.
In homes with a solar thermal system, what percentage of the home’s domestic hot water needs are met by the solar equipment?
One of the best studies on the “solar fraction” question was performed in 2006 by researchers from Steven Winter Associates. The researchers monitored two residential solar thermal systems for a year, one in Wisconsin and one in Massachusetts. Each house had two solar collectors. According to the researchers’ report, Cost, Design and Performance of Solar Hot Water in Cold Climate Homes, the solar fractions of these two carefully monitored systems were 63% and 61%, respectively.
I’m going to assume that a two-collector solar thermal system supplies 63% (on an annual basis) of a family’s domestic hot water needs. (The energy used to heat the remaining 37% of a family’s hot-water needs is provided by a backup water heater — for example, an electric resistance water heater).
Some solar thermal enthusiasts may argue that there are locations in the U.S. where the solar fraction for a solar thermal system is likely to be higher than 63%. They're right. However, it's important to remember that in locations with lots of sunshine, the annual output of a PV system will also be higher than it would be in a location like Wisconsin or Massachusetts.
How much electricity is needed to make domestic hot water?
The electrical energy use assumptions in this article are based on data provided by Marc Rosenbaum, who has monitored the energy use of several Massachusetts families for years.
According to Rosenbaum’s monitoring data, a typical electric resistance water heater uses 0.21 kWh/gallon of hot water (3,373 kWh/year to make 44 gallons of hot water per day), while a typical heat-pump water heater uses 0.07 kWh/gallon of hot water (1,124 kWh/year to make 44 gallons of hot water per day).
Comparing three systems
My latest approach to comparing the cost of solar equipment used to make domestic hot water starts with the assumption that the typical solar fraction of a cold-climate solar thermal system is 63%.
Keeping that solar fraction in mind, I have calculated the cost of equipment for three scenarios:
- House A has a solar thermal system (two rooftop collectors and a solar storage tank in the 80 to 120 gallon range) and an electric-resistance water heater for backup.
- House B has an electric-resistance water heater and a PV system sized to provide enough electricity on an annual basis to meet 63% of the family’s hot water needs.
- House C has a heat-pump water heater and a PV system sized to provide enough electricity on an annual basis to meet 63% of the family’s hot water needs.
The table below compares three homes in Boston, each of which uses 44 gallons of domestic hot water per day.
According to this analysis, the PV plus electric-resistance approach is about 25% cheaper than the solar thermal route, and the PV plus heat-pump approach is about 50% cheaper than the solar thermal route.
Everyone's numbers are going to be different
What if you are a solar thermal buff who thinks that my assumptions are unfair to solar thermal? Well, let’s change a few numbers. We’ll assume that a solar thermal system costs only $6,000 to install and that the solar fraction is 75%.
I think that the assumptions made in the above table are unrealistic, since it's hard to find a contractor willing to install a good two-collector solar thermal system for $6,000, and because in a location with a solar fraction of 75% a PV system is likely to produce more electricity than this table shows. But according to this analysis, the PV plus heat-pump approach is still about 23% cheaper than the solar thermal route.
Using the information in this article, GBA readers can perform their own calculations. For some readers, the cost of a solar thermal system will be higher than either of the above analyses. For others, the cost will be lower than my lowest assumption. But most results will be similar to the results shown above.
One more point to consider: if your numbers result in a tie — if your calculations show that solar thermal equipment and PV equipment cost exactly the same — remember that the maintenance costs for a solar thermal system will be higher than the maintenance costs for a PV system.
Some people love their solar thermal systems
Solar thermal technology attracts a loyal group of fans. Solar hot water systems have been around for more than a century, and for renewable energy enthusiasts of my generation, these systems evoke fond associations. I have two solar thermal collectors on my roof, and I enjoy listening to the quiet hum of my system's small pump when the sun is shining.
Solar thermal buffs make the argument that solar hot water systems are simple, elegant, affordable, and delightful. I sympathize with their emotional attachment to these systems, and I wish them all the luck in the world. However, most people I know who have installed solar thermal equipment have a tale or two involving maintenance headaches. (If you are a hobbyist, these technical glitches are sometimes exciting to solve. If you are an average homeowner, however, these glitches are just ordinary headaches.) Owners of PV systems are much less likely to have as many stories of maintenance problems.
Martin Holladay’s previous blog: “Martin’s 2014 Christmas Parody.”
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