Economics

The choice of whether or not to use solar process heat is in most cases based on cost efficiency. Here you can find information about the costs of a solar process heat plant, current funding options, as well as basic economic information.


Costs

Unlike conventional heat sources, the usage of solar process heat demands high investments in the beginning. However, these investments give good returns in the following years since there are nearly no operating costs. The annual COP of big solar plants can quite possibly reach 70 to 100; meaning only 1 kWh of electricity is necessary for the supply of 70 to 100 kWh heat. Thus, low heat costs and high CO2 savings can be achieved.

Since the solar thermal system technology may vary significantly depending on the case of application, unlike with photovoltaic systems, no definite statements can be made about the expected investment costs. Since the solar thermal system technology may vary significantly depending on the case of application, unlike with photovoltaic systems, no definite statements can be made about the expected investment costs. Specific turkey costs, from planning to start of operation, can hence be in a range of 350…1500 €/m². Possible funds can be deducted from that price. Since there may be significant price differences, even for the same system configuration, potential applicants should always get at least two bids.

The following graph shows the specific investment costs of solar process heat plants including planning, construction, components, integration and start of operation, which were realised in the past years, mainly in Germany but also in several other European countries. Especially for smaller systems with less than 100 m², the costs vary significantly because the system integration has a stronger proportional impact on the price here. Thus, the graph provides ranges of cost, which can be used as a first estimation. The system’s costs may vary depending on the type of collector. The system’s costs may vary depending on the type of collector. The costs of vacuum pipe or CPC collectors are usually higher.

Spezifische Netto-Investitionskosten solarer Prozesswärmeanlagen inkl. Planung, Komponenten, Installation und Integration
Specific net investment costs of solar process heat plants incl. planning, components, installation, and integration.

Amortization Period and Returns

High single-digit amortisation periods are possible with solar process heat in the shown frameworks. Amortisation periods of less than 7 years however are unusual. Since an operation period of 20 to 30 years can be expected though, relatively high returns of more than 10 % are possible despite the currently low energy costs. Solar heat production costs of bigger solar process heat plants can be below 5 €-Cent/kWh when making use of current subsidies, under ideal conditions even in a range of 3 €-Cent/kWh. Therefore, process heat supply by solar thermal can already today be more cost effective than by fossil fuels like gas or fuel oil. Due to the anticipated rise of fossil fuel prices, this cost advantage is growing bigger and bigger.


Conclusion

In conclusion, process heat is especially cost effective if the following boundary conditions are given:

  • Process temperatures below 100 °C (better below 80 °C)
  • Steady heat demand during high radiation months (April-September)
  • Steady heat demand during high radiation months (April-September)
  • Relatively high buying costs of the conventional energy source (fuel oil/gas) or if electricity is used to produce heat