It is widely accepted that Greece possesses an excellent solar energy potential according to existing long-term measurements, as seen in figure [1]. More specifically, Greece is located in a major geographical region (SE Mediterranean area) with an abundant and reliable supply of solar energy, even during the winter. Despite the mild local weather conditions and sun abundance, both suitable for the exploitation of solar collectors, local solar industry market has gone through a sluggish sales period during the last few years, while electric water heaters continue to flourish. This situation by itself characterizes a controversy. On one side, a continuously declining initial investment cost evolution in constant terms along with an improved production quality is reported. On the other side, a sales and interest rate decrease is testified concerning the domestic solar water heating systems (DSWHS), being in contradiction with the thriving dynamic solar market of Germany and Austria, figure [2]. Unfortunately, during the last decade, the solar collector local market annual sales are almost stable, slightly varying between 120,000m² and 160,000m² of solar collector surface. At this point, it is important to mention that a remarkable portion of these annual sales is related to the replacement of old-fashioned or completely out of order systems installed in the early 80s. According to estimations, for the last ten years, less than 50,000 new systems are annually installed in Greece, fairly contributing to the realization of the E.U. target of 500m² solar collectors for every 1000 citizens.

In an attempt to explain the reason why this strange decline in sales has occurred, an integrated cost-benefit analysis is carried out taking into consideration the vast majority of the parameters affecting solar thermal energy production cost. The resulting numerical values are accordingly compared with the alternative hot-water production techniques. The results obtained not only explain, with sufficient accuracy, the current local market slowdown but also demonstrate the specific actions that if realized they may boost DSWHS local market sales.

2. COST-BENEFIT ANALYSIS

Solar hot water systems are devices that utilize sun's energy to directly heat water providing it to households, hotels, factories and other recipients. Such systems typically incorporate a roof-mounted solar collector, an insulated hot water storage tank and a hydraulic heat transport system with sensors and controls, figure [3]. A solar collector receives solar irradiance and converts it into heat. The main work is done by an absorber plate, which is often painted mat black or coated with a special "selective" coating. To minimize heat losses the collector is thermally insulated and has a transparent cover made of special glass or plastic. Hot water is circulated to and from the storage tank by means of a circulation pump, or by gravity as in the "thermosyphonic" systems (the latter being the most commonly used in Greece). Such a system may provide more than 2/3 of the annual hot water demand, while a conventional heat source (such as a gas-oil boiler or an electric heater) provides the rest.

The economic viability and attractiveness of a DSWHS could be founded by computing the solar-thermal energy production cost value, and then compare the results obtained with the corresponding energy market prices of the other available alternative solutions, like electric heater, gas-oil boiler etc.

The future value of the total investment cost of a DSWHS after n years of operation "C_n" is a combination of the initial installation cost "IC_n" along with the corresponding maintenance and operation cost "FC_n", both quantities expressed in current values. Thus, one may write:

where

and

In equation (2) "IC_o" is the turnkey cost of a DSWHS, given as:

where "f" expresses the installation cost coefficient. In the present analysis the DSWHS installation cost is expressed as a fraction (f»3%-10%) of the ex-works price of the equipment (i.e. Pr.A_c) and it normally includes connecting parts, pipe insulation materials, transport, labour for mounting the system, etc. "Pr" is the specific ex-works price (Euro/m²) of the system. The problem of finding the specific cost of a DSWHS is a multivariable one. In practice however the two most important parameters are the collector area "A_c" and the storage tank capacity "V", see figures [4] and [5]. Thus one may write:

Accordingly, "δI" is the State subsidy (if any) amount concerning the DSWHS purchase cost, e.g. tax deduction, etc, given as:

The maintenance and operation (M&O) cost "FC_n" includes the annual repair and maintenance cost, which constitutes expenses for antifreeze, replaced damaged pipes and parts, repaired insulation materials, glass, paint labour cost and other miscellaneous items. During the present analysis "FC_n" is expressed as a function of the initial cost "m", taking also into account an annual increase of the cost via the M&O mean annual inflation rate "g_m". In the early systems the "m" value exceeded 10%, while for the contemporary systems this value has dropped to 3%-5%. Finally, "i" is the mean annual capital cost of the local economy.

On the other hand, the total savings "R_n" (in current values) over a n-years period due to the thermal energy offered by the solar system are given as:

where:

E_o is the net annual heat output of the system, assumed constant over the entire operational period of the system (in kWh/year)

c_o is the present value of the effective cost coefficient of the substituted -by the DSWHS production- conventional energy (in Euro/kWh)

e is the mean annual rate of the substituted conventional heat-sources market price change (i.e. thermal energy price escalation rate)

The effective cost coefficient value "c_o⁽ⁿ⁾" after –n years of operation of the solar system can be predicted by equating the future value of the investment cost with the corresponding total savings, i.e.:

After several algebraic manipulations, equation (8) reads in view of equations (1) through (7):

where

It is important to note that "f₁" and "f₂" both take into account the impact of the thermal energy escalation rate and the local market capital cost as well as, the M&O cost annual inflation rate and the local market capital cost respectively. Therefore, the expressions of "f₁" and "f₂" should be written as:

Substituting equation (4) into equation (10) one gets:

where "ε_o" is the collector's reduced annual heat production, that is the annual solar heat production per square meter of collector surface (kWh/year.m²), i.e.:

Summarizing, the solar heat production cost present value after n-years of operation of a DSWHS is given as:

The above computed value should be compared with the present value of the superseded conventional heat source used to produce hot water, "c^*". In Greece, solar energy usually substitutes either diesel oil or electricity. Recently, a remarkable natural gas penetration in the local tertiary sector is under way. Hence, generally speaking, hot water may be produced by using either oil-natural gas (mainly during the cold months), or electricity. Setting as "ξ" the energy fraction covered by oil and natural gas, the corresponding specific cost of the non solar produced thermal kWh "c^*" is expressed as:

where "c_f" and "c_el" are the specific cost of producing a kWh of heat using oil/natural gas and electricity, respectively.

Therefore, if

then the proposed DSWHS is financially viable, leading to total gains, for the n-years expected service period (present values) "G_o⁽ⁿ⁾" expressed as:

Hence, the corresponding expression of the benefit to initial cost ratio "BCR" given in becomes:

3. APPLICATION RESULTS

Before the application of the above presented cost-benefit model one should define the specific ex-works price of a DSWHS along with the corresponding reduced annual heat production value. As already mentioned, the problem of finding the specific cost of a DSWHS is a multivariable one. In practice however, except for the manufacturer's brand name, the other two most important cost conforming parameters are the collector area and the storage capacity. Generally speaking "Pr" depends mainly on the collector area "A_c" and the hot water storage capacity "V".

3.1 Specific Price of a DSWHS

In previous cost-benefit analysis publications relatively constant specific cost values have been considered, ranging from 210€/m² up to 380€/m². For the present study the following expression, based on the results of an extensive market survey (1996-2003) throughout Greece, may be used (see also figures [4] and [5]):

Equation (20) is valid for, 1.5 m²£A_c£6.0m² and 40(lt/m²)£ (V/A_c) £85(lt/m²).

Using the data gathered, one may support that for a rationally selected DSWHS the specific ex-works price varies between 230€/m² and 300€/m², while the corresponding turnkey prices should range between 250€/m² and 330€/m². From the outcome of the sensitivity analysis explained in the next section, the impact of the exact value of the turnkey price is vital for the viability of a DSWHS. That's why one should insist on establishing the correct numerical value of this parameter.

On top of this, researchers are in agreement with the results of the present market survey that during the last decade the turnkey prices of DSWHS in Greece have been remained almost steady in constant values. Therefore, no remarkable price differences are encountered during the seven years long market survey.

3.2 Reduced Annual Heat Production of a DSWHS

The next parameter to be defined according to equation (15) is the collector's reduced annual heat production "ε_ο". More specifically, the annual heat gain of a DSWHS "E_o" can be estimated as:

For the estimation of daily solar energy gain "E_i" one should take into consideration the daily hot water consumption pattern per person as well as the available solar energy impinging at the selected collector surface. Besides, one cannot ignore the considerable energy heat-losses from the hot water storage tank, especially during winter nights for households where all habitants are morning hot water users.

Until recently "ε_ο" is assumed constant, e.g. equal to 570kWh/(m².year) up to 650kWh/(m².year). Parallel research, based on experimental measurements, supports that the mean annual efficiency of a rationally sized DSWHS is between 35% and 50% and almost independent of the inclination (tilt angle) of their collector's surface. However, one should realize that the solar heat gains calculation model does not take into consideration the daily or more practically the seasonal hot water demand variations. For example, during the summer time period a considerable amount of solar energy is available, which normally over-fulfils the corresponding hot-water demand. Nevertheless, this amount of energy may be partially or totally remained unutilised if the DSWHS owners are away from home, i.e. for summer vacations, which is the case for most city dwellers.

To confront these problems, the authors suggest the following reduced heat calculation model. During the cold season months (e.g. November to April) a rationally sized DSWHS cannot fulfil the daily hot water demand of the consumers, hence the system heat gain is determined by the available local solar potential and the system's total efficiency, including storage tank heat losses, especially for early morning hot water users. In these cases one may write:

On the other hand, during the hot season periods (e.g. June to September) the available hot water normally exceeds the corresponding demand, taking also into account the relatively high ambient temperature. Hence, in these cases the daily heat gain is usually dictated by the load (hot water) profile of the consumers "Q_i".

Recapitulating, the reduced annual solar heat production of the system "ε_ο" can be finally calculated using the following relation:

This is done on the basis of the hot water consumption daily/seasonal pattern, the available solar radiation and the solar collector surface and efficiency. According to a large number of consumer profiles and solar radiation combinations tested, the corresponding "ε_ο" value varies between 300 and 700kWh/(m².year).

3.3 Financial Subsidization of DSWHS

The incentives for the purchase a DSHWS were first applied in 1978 (i.e. law 814/78), in the form of income tax reduction, representing the 75% of the system cost at that time (1978 rates), in case that the purchase cost did not exceeded the 10% of the citizen's annual income liable to tax. Later, this amount was slightly modified (decreased to »60%) by the law 1473/84. Taking into consideration that the above mentioned tax reduction was expressed in constant numerical values (in the local currency), the impact of this incentive became ineffective rather fast due to the high inflation rates of that period (1980-90). During this high inflation period soft loans were also allocated for the purchase of solar systems, covering up to 70% of the system cost.

In 1995, an attempt to support the DSWHS market was made by passing the law 2394/95. According to this law, the exemption of 75% of the purchase and installation cost of all renewable energy systems from the individuals taxable income is anticipated. Hence, it is obvious that the only support could come from legislation and programs supporting the whole renewable energy sector. Even according to the law 2394/95, the final tax deduction strongly depends on the taxable income of the DSWHS owner. Taking into consideration that the existing income tax rates, for the majority of taxpayers, are equal to 15%, 30% and 40% respectively (according to the taxable income) and neglecting that any tax return is realized normally one year after the DSWHS purchase, the final subsidization amount is between 11% and 30%, (e.g. γ=0.75x0.40).

Currently, (actually, since January 2004), there are no governmental actions supporting anymore the DSWHSs' purchase by individuals, since the national energy policy is almost exclusively focused on stimulating the imported natural gas penetration in the tertiary sector.

3.4 Service Period Impact on the DSWHS Competitiveness

Using the above-presented information, one could go ahead and calculate the effective cost coefficient variation as a function of the DSWHS service life for selected representative regions of Greece. For this purpose the available long-term solar radiation data based on measurements are taken into consideration concerning the North, Central and South Greece, see figure [6]. It should be kept in mind that according to a recent study by Greek CRES, 62% of the Greek DSWHS in operation are located in central, 27% in Northern and 12% in South Greece.

It is also important to note that the contemporary DSWHSs' service life is estimated around 15 years, although the early systems manufactured in the '80s present quite lower life-span. For this case ESIF estimates the life expectancy of typical Greek manufactured DSWHSs to be around 10 years, while CRES/GSIA (GSIA, i.e. Greek Solar Industry Association) of experts assume average life-span equal to 15 years for the earlier (before 1985) installations and up to 20 years for the ones produced after 1996.

In figure [7] one may examine the solar hot water production cost variation for a typical DSWHS (see Table I) operating in Central Greece (where Athens and its vicinity) as a function of service period of the installation, for cases with zero and maximum available (30%) subsidization. According to the results from the calculations, solar heat cost is remarkably reduced with the years that the DSWHS stays in operation, especially during the first eight (8) years. Moreover, there is a significant solar heat cost reduction in systems with 30% subsidization (approximately 0.03€/kWh), which is slightly decreasing with the system operational time.

In the same figure one may compare the present value of the solar hot water production cost with the corresponding value by an electric heater or an oil-fired central boiler, operating with total efficiency estimated at 95% and 75%, respectively. According to the results obtained the proposed operation scheme of a DSWHS cannot be financially matched when compared with an oil-fired water heating central system, independent of its operation period, when no State subsidization is considered. Only when the maximum subsidization is taken into account, the corresponding pay-back period is slightly less than twelve years. On the other hand, DSWHSs are definitely more cost effective than the typical commercial electric heaters, presenting a pay-back period equal to seven years in cases without, and less than four years in cases with 30% first installation cost subsidization.

Similar results are also available for a typical DSWHS located in North Greece (as in Salonica major area) or in South Greece (i.e. the island of Crete), figures [8] and [9]. One should bear in mind that the available annual solar energy is more than 10% higher in the South than in the North part of Greece, figure [6]. However, for the N. Greece, DSWHSs seem to have no possibility to be less cost effective than oil-fired water heating systems (even with 30% subsidization). Quite opposite, for both areas, North and South, the expected payback period in relation with electric water heating is less than eight (8) and seven (7) years respectively, without any external financial subsidization. As far as the initial installation cost subsidization is concerned, the corresponding payback diminution regarding DSWHSs operating throughout Greece is almost three (3) years for cases of maximum subsidy in comparison with installations without State contribution.

3.5 Critical Discussion of the Results

At this point one should clarify two important points. First, DSWHSs are not, economically speaking, in a favourable situation when compared to the fossil fired water heating systems. This happens, basically, because the Greek State keeps down the cost of electricity (the Public Power Corporation, PPC, was under State control up to 2001) and oil (by imposing lower taxation) relatively constant (in current terns) for a long period of time, in an attempt to control local market inflation rate. As a result, prices paid for electricity throughout 2000, expressed in constant terms (inflation free), are almost 20% lower than the corresponding ones of 1990. On top of this, there is only a small number of consumers that cover their hot water needs using a central boiler, especially during the hot months of the year. For this purpose, the real consumer hot water production cost is estimated and included in figures [7] to [9]. Thus, it is considered that the representative consumer covers 30% of his needs (mainly during winter months when central heating boilers are operating in Greece) using oil, and the rest 70% utilizing an electric heater. For this consumer the expected payback period varies from 5 ½ to 6 ½ years (for installations located in South and North Greece respectively) in cases with 30% subsidization, and from 8 to 10 years in cases with zero subsidization, see Table II. Similarly, the corresponding BCR₁₅ values are bounded between 0.5 and 0.8 for an application without State subsidization and between 1.35 and 1.81 in case of maximum (30%) subsidization.

Finally, one should discuss the possibility of imposing subsidization for DSWHSs throughout Europe. Most central and north European countries use various financing procedures to stimulate their solar thermal markets. For example, recently the German government has announced a 35% grant increase in an attempt to support the purchase of solar thermal systems, with the aim of doubling Germany's solar thermal installations by 2006. In this context, grants for solar panels for hot water and space heating are increased from 92 Euro to 125 Euro for each square meter of collector surface installed. This effort is funded through revenues from the so-called Eco-tax. Unfortunately, in Greece all financial incentives in favour of DSWHSs are eliminated, under a new national energy policy shift towards a wider public acceptance and utilization of the imported natural gas.

Let's make it clear; the authors strongly believe and support the idea that these "so called solar systems grants" are only a small portion of the avoided social and environmental cost, whenever clean solar energy substitutes for the heavily environmental polluting and grossly imported, and under depletion fossil fuels. In fact, there is a common agreement among researchers that the above-mentioned avoided cost, for a ten-year operating solar system, amounts to 50% of the present purchase value of a DSWHS, minimal. Hence, the abolition by the Greek State of any financial grants regarding the DSWHSs installations is a clearly unfair and partial action, strongly in favour of the imported natural gas the use of which jeopardizes the future of the domestic solar thermal market, as well as the future survival possibilities of the corresponding local manufacturers.

4. SENSITIVITY ANALYSIS

The calculated results concerning the estimated solar hot water production cost of a DSWHS installed in central Greece (almost the 2/3 of the existing installed solar systems are located there) are shown in the following sections presented in terms of the main parameters entering the problem.

4.1 System Utilization Factor

As it is clearly stated in section 3.2, the annual energy gain of a DSWHS depends not only on the available solar potential locally but also on the degree of the system's utilization. For this purpose one may define the annual utilization factor "UF" of any DSWHS according to the following equation:

where "H_T" is the total available annual solar radiation per square meter collector's surface received locally. The "UF" describes the portion of this available solar energy that is finally used by the consumer, taking into account the DSWHS efficiency and the daily/seasonal hot water consumption pattern.

So, using the definition of "UF", equation (15) finally reads:

Equation (25) presents explicitly all main parameters affecting the system's solar hot water production cost, i.e. the location "H_T", the utilization factor "UF", the turnkey price "Pr.(1+f)", the length of the service period "n", the annual M&O cost "m", the investment subsidization percentage "γ" and the local market economic parameters "f₁ and "f₂", or more specifically, the market capital cost "i", the non solar heat production cost annual escalation rate "e" and the system's M&O cost inflation rate "g_m".

According to the results shown in figure [10] the impact of the utilization factor on the viability of a DSWHS is dominant, especially for low "UF" values. For example, when considering a DSWHS operating for 15 years in central Greece (H_T=1730kWh/(m².year)), the annual "UF" should exceed the 26% mark in order to be more cost efficient than electricity, and 46% in order to be able to compete with oil. This last value is quite high (annual reduced heat gain equal to 800kWh/m²), approaching the upper limits of equation (24). Even in cases of a 30% subsidization value, the corresponding "UF" value of a DSWHS that replaces oil-heat is almost 36%. However, the results are not very disappointing for the typical Greek owner of a DSWHS operating without major problems for 15 years, since the corresponding "UF" values are 30% and 23% for installations without and with maximum subsidization, respectively.

4.2 System Dimensions

Using the information presented in section 3.1, one may support that the sizing of a DSWHS is another important factor affecting its financial competitiveness. Thus, according to figure [4] there is an optimum solar collector area value that minimizes the system's specific cost. On top of this, the system cost and its efficiency are also influenced by the size of the hot water storage tank in conjunction with the collector surface and the consumer's hot water demand.

After a detailed analysis of the operation of a DSHWS, located in central Greece for ten years without any initial installation cost subsidization, one gets the results shown in figure [11], as a function of the system's collector surface area size. According to these results, the optimum system collector surface area varies between 3.5m² and 4.5m², on the basis of the current market data. As it comes out, this means that the best-cost efficiency installation should serve six (6) to eight (8) persons, a quite higher value than the average number of members constituting a typical Greek family. The heat cost difference between a system appropriate for 6-8 persons and a system designed to serve a typical four member family is almost 0.015€/kWh, representing a full 25% increase of solar hot-water production cost.

The expected heat cost is significantly increasing in case that the hot water tank capacity is oversized, hence for the extreme case situation presented in figure [12], the DSWHS operational cost exceeds the corresponding electricity cost value. On the other hand, if the hot water storage tank is undersized (i.e. less than 55lt per m² of collector surface), the system purchase cost is fairly reduced. However, the utilization factor of the system is also remarkably decreased, leading to solar heat production cost values relatively higher than the ones with the best configuration, especially for small and large systems. In this case one should also mention that since an undersized system cannot fulfil the consumer needs, additional fossil fuel consumption is needed.

4.3 System Reduced Price Variation

The initial turnkey cost of a DSWHS includes the ex-works price of the equipment needed and the corresponding installation cost. The application of new technological achievements and the economies of scale decrease the prices of most energy production systems in the international market. However, one cannot disregard the market's inflation rate that in many situation augments the production cost. In figure [12] one may examine the impact of a rational specific price variation (-10% up to +10%) on the hot water production cost of a typical DSWHS, operating without problems, for ten (10) or fifteen (15) years, in central Greece, excluding any state subsidization.

As it is expected, any specific price reduction diminishes solar heat cost, while the corresponding variation is almost linear. Besides, the specific price impact is stronger for the 10 years of operation than for the case of 15 years. It is also important to note that even when decreasing by 10% the DSWHS purchase price, the systems cannot compete with the oil-heat production cost without any social-environmental consideration to be taken into account. Additionally, only if the turnkey price of a DSWHS increase exceeds the 8% the system is not financially viable for a typical consumer, and for 10 years service period.

4.4 System Annual M&O Cost Impact

The application of modern design and improved construction techniques leads to more efficient and reliable installations. The direct result of this evolution is a remarkable decrease of the M&O cost. On the other hand one should also take into account the relatively increasing labour cost, especially after the establishment of the new European currency, replacing old drachmas.

In figure [13] one can notice the almost linear variation of solar heat cost in relation with the variation of the annual M&O cost coefficient value. Even at zero M&O coefficient cost solar water heating cannot compete -at the present- the oil-heat production cost. Additionally, if the annual M&O cost coefficient surpasses the 4% mark then the system under investigation is no more financially attractive for a typical Greek consumer, in case of 10 years service period. Looking further, the break-even value approaches the 8% mark for a system operating for 15 years without major problems. For such a high M&O cost value, even electrical water heaters appear to be more cost efficient than solar systems.

4.5 Local Market Financial Situation

It is commonly agreed that the economic situation of a local market strongly affects any investment. According to the model developed, the capital cost, the heat purchase price annual escalation rate and the M&O cost annual inflation rate are the parameters directly involved in the cost benefit evaluation of a DSWHS. Taking a closer look at equations (11) and (12) describing the "f₁" and "f₂" terms which appear in equation (25), one may state that "f₁" is a function of the capital cost "i" and the difference between capital cost and heat annual escalation rate "i-e", while "f₂" depends on the capital cost "i" and on the difference between the capital cost and the M&O cost inflation rate, in excess of the operational time of the installation "n".

From figures [14] and [15] one may conclude that the capital cost index "i" does not significantly affect "f₁" and "f₂", for any reasonable choice of the "i" value ("i" usually stays in the range 6%£i£16%). On the other hand, there is a strong variation of "f₁" with (i-e) and "f₂" with (i-g_m), while "f₁" and "f₂" vary almost inversely, see also equations (11) and (12). In this context, one may examine the dependence of solar water heat cost variation on (i-e) and on (i-g_m) only, disregarding the minor direct impact of the capital cost. Figure [16] shows that the capital cost of the heat escalation rate difference affects almost linearly the heat production cost, while quite lower is the impact of (i-g_m). Taking into consideration that the (i-e) value, in Greece, during the last decade, remains higher than 6%, one could easily understand the competitiveness deficit that a DSWHS has for a typical consumer in the local market. On the contrary, in case that the solar water heating annual escalation rate exceeds the local market capital cost (e.g. after a major oil crisis), then solar systems should even compete the oil-heating production cost.

As far as the M&O cost annual inflation rate is concerned, one could easily see that the solar heat cost decreases as the inflation rate remains low, in comparison with the capital cost index. However, a "g_m" increase of the order of 10% slightly affects the solar heat cost, i.e. by almost 0.005€/kWh.

Recapitulating, according to the proposed cost-benefit model, the parameters that significantly affect the economic viability of DSWHSs, in Greece or elsewhere, are the utilization factor (clearly positive), the appropriate system sizing, the system specific cost variation (linearly), the installation service period (positively) and the heat cost production escalation rate (in relation to market capital cost). Rather less important one could characterize the impact of the annual M&O cost, the direct impact of local market capital cost and the annual M&O cost inflation rate (in relation to market capital cost). In any case, DSWHS cannot compete with oil or natural gas heat production, while they are clearly more cost effective than electric heaters, despite the fictitiously far down kept value of low voltage electricity in Greece.

5. CONCLUSIONS

The present work investigates the sluggish solar collector market situation currently in Greece, despite the abundantly available solar radiation and the severe environmental and macroeconomic benefits imposed in the local society by the penetration of these solar systems in the domestic energy balance. For this purpose, an integrated cost-benefit method is presented, analysing the economic viability and attractiveness of contemporary DSWHSs. The developed model requires analytical presentation of the major problem parameters considered; including the system reduced initial installation cost, the corresponding utilization factor and the existing subsidization opportunities.

Accordingly, solar hot water production cost is estimated for each potential solar zone in Greece, as a function of the DSWHSs service period. The numerical values achieved are successively compared with the available alternative ones based on electricity or oil and natural gas. Finally, a quite extensive sensitivity analysis is carried out, in order to demonstrate the impact of the main techno-economic parameters on the fiscal behaviour (solar heat cost production for ten and fifteen-years operation) of contemporary DSWHSs in order to explain the sceptical and reluctant attitude of local consumers towards domestic solar energy applications.

According to the results obtained, it is almost obvious than under the current situation solar heat cannot compete with oil and natural gas heat production, in pure financial terms. It is only after the remarkable social and environmental benefits of solar energy replacing fossil fuel fired systems are introduced in the market competition (e.g. as an initial installation cost subsidization), the DSWHSs may become more cost efficient than the corresponding oil or natural gas ones. On the other hand, DSWHSs are definitely more financially attractive than electric heaters, even with zero subsidization, under the precondition of ten years service period and a 25% annual utilization factor, at least. It is also worthwhile mentioning that the DSWHSs profitability is very sensitive to changes of the utilization factor, the system proper sizing, the heat cost escalation rate and the initial installation cost; thought, it is slightly less sensitive to changes of the M&O cost. The direct impact of the capital cost index and the annual inflation rate on solar heat production cost seems to be limited.

Table I: Nominal Values of the Main Parameters Used in the Present Cost-Benefit Analysis

Table II: Synopsis of Cost-Benefit Analysis Results for Representative Greek Regional Territories

FIGURES