Monday, June 25, 2012

Solar Heat Pumping

The average prices of photoelectric systems in Germany have fallen from roughly 2425 Euro/kWp to 1750 Euro/kWp in the last 12 months. The chart on the right (Long live Excel 2003!) shows a rough estimate of how the underlying electricity production costs have fallen in step with system costs. The blue line represents a photoelectric system financed at 5% while the magenta line represents a system financed at 3%. The headline here is that production costs have fallen from around 15.5 cent/kWh to as low as 11 cent/kWh in the last year. As a side note, the yellow line shows how the price Delta between these two financing arrangements is shrinking as system prices fall.

The drop in photoelectricity prices is opening up some interesting applications for photoelectricity. As a point of reference note that the all in price for electricity in Berlin is 26.22 cent/kWh while the price of natural gas is 7.67 cent/kWh. It's currently no wonder that Berliners predominately heat their homes and water heaters with natural gas.

Knock Knock
Who's there?
Heat Pump
Heat Pump who?
Just Heat Pump

Heat pumps have the seemingly magical ability to convert one unit of electricity into two to three units of heat (See Wikipedia for the details). This means that if a tall blonde Berliner buys electricity from the grid at 26.2 cent/kWh she can use a heat pump to convert the electricity to heating at an adjusted cost of 8.73 to 13.1 cent/kWh. If, on the other hand, our heroine powers her heat pump with electricity from her shiny new photoelectric system, her "fuel costs" will be 3.5 to 4.5 cent/kWh. Unless I'm missing something, photoelectric heating has a big bright beautiful future in Germany.

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