Economic and Environmental Analysis of Investing in Solar Water Heating Systems

Solar water heating (SWH) systems can provide a significant part of the heat energy that is required in the residential sector. The use of SWH systems is motivated by the desire to reduce energy consumption and especially to reduce a major source of greenhouse gas (GHG) emissions. The purposes of the present paper consist in: assessing the solar potential; analysing the possibility of using solar energy to heat water for residential applications in Romania; investigating the economic potential of SWH systems; and their contribution to saving energy and reducing CO2 emissions. The results showed that if solar systems are used, the annual energy savings amount to approximately 71%, and the reduction of GHG emissions into the atmosphere are of 18.5 tonnes of CO2 over the lifespan of the system, with a discounted payback period of 6.8-8.6 years, in accordance with the savings achieved depending on system characteristics, the solar radiation available, ambient air temperature and on heating load characteristics. Financially, the installation of SWH systems determines net savings of 805-1151 Euro in a 25-year period in the absence of governmental subsidies. According to the sensitivity analysis, installing a SWH system with subsidies of up to 50% determines the reduction of the discounted payback period to 3.1-3.9 years and the increase of net savings to 1570-1916 Euro. These results indicate that investing in these systems is cost-effective for Romanian households as long as the governmental subsidies increase.