Solar Engineering of Thermal Processes, 4th Edition

Chapter 11

Solar Process Economics

In the first 10 chapters, we have discussed in some detail the thermal performance of components and systems and showed how the long-term thermal performance can be estimated in terms of the design parameters of the components. We also want to be able to assess the value of a solar process in economic terms. Given the performance, we need methods for making economic evaluations.

Solar processes are generally characterized by high first cost and low operating costs. Thus the basic economic problem is one of comparing an initial known investment with estimated future operating costs. Most solar energy processes require an auxiliary (i.e., conventional) energy source so that the system includes both solar and conventional equipment and the annual loads are met by a combination of the sources. In essence, solar energy equipment is bought today to reduce tomorrow's fuel bill.

The cost of any energy delivery process includes all of the items of hardware and labor that are involved in installing the equipment plus the operating expenses. Factors which may need to be taken into account include interest on money borrowed, property and income taxes, resale of equipment, maintenance, insurance, fuel, and other operating expenses. The objective of the economic analysis can be viewed as the determination of the least cost method of meeting the energy need, considering both solar and nonsolar alternatives. For solar energy processes, the problem is to determine ...