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 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 (PV) 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 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.