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					Solar Water Heating Systems in Georgia
Cost Benefit Analysis

Rural Energy Program

April 2008




                   Prepared by Levan Kobakhidze
                           Tbilisi 2008
      Solar Water Heating Systems in Georgia

                       Cost Benefit Analysis




Prepared for: USAID/Caucasus
25 Atoneli Street
0105, Tbilisi, Georgia


Prepared by: Rural Energy Program




                                    26 Dzmebi Kakabadzeebi Street, Tbilisi
                                                           0105, Georgia
                                                   Tel: +995 32 50 63 43
                                                  Fax: +995 32 93 53 52




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Table of Content



Summary ..........................................................................................................................................
Situation in Georgia ........................................................................................................................ 4
Solar Water heating technologies available in Georgia .................................................................. 5
Potential fields of utilization of solar water heating systems ........................................................ 5
Analysis of Economic Viability according to the specific projects ............................................... 6
   Simple Solar Water Heating System for a family with three members
   Solar Water Heating System for a private house (7-10 members).............................................. 8
   Solar Water Heating System for a small hotel ............................................................................ 9
   Solar Water Heating System for a large hotel or enterprise ..................................................... 10
Cost Benefit Analysis, Recommendations.................................................................................... 11




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                                         Summary


This document is for those who are basically interested in solar water heating systems or
are willing to use them. You can get general information on the situation in Georgia,
technologies and products. You can get to know which are the perspective fields for
utilization of these systems and can also get assistance in finding the answer to the
question: Is it worth investing in solar systems or not? Finally, you can get advice and
recommendations.


                                    Situation in Georgia


Unlike in the developed countries, no much attention is paid to utilization and
development of renewable energy sources in Georgia; it concerns both the government,
and population. The situation is similar with solar water systems, although slight progress
can be noticed during the last 2-3 years and the interest of the population in this field is
gradually increasing.

In contrast to other renewable energy sources, utilization of solar energy has certain
advantages. First of all, it concerns its territorial availability: the Solar energy is more or
less equally distributed on the horizontal surface of the earth while, for example wind has
a periodic nature and depends on other environmental factors

One of the driving motives of development of this sector is the continuous increase of
energy carrier tariffs. This drives the population to look for alternative energy sources.

Currently one of the most available alternatives is solar water heating systems, as the cost
of energy for water heating makes up a significant portion in a family total energy
budget.




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               Solar Water Heating Technologies Available in Georgia


As mentioned above obvious progress can be noticed in implementation and development
of solar water heating technologies that caused the emergence of new interested parties
on the local market. To date, there are tens of companies involved in production and
import, or maintenance and installation of solar water heating systems in Georgia.

Systems are mainly imported from Turkey, China and sometimes from the various
western European countries. However, locally produced systems are also available on the
market.

There are mainly two different technological systems: flat collectors and vacuum pipes.
Principally the systems may be also divided in two groups: passive and active. Passive
systems outnumber active ones, as for small sized systems the price is significantly
lower. Active systems include such additional components as circulating pumps,
controllers, etc. They are used in larger applications.

Solar water heating systems also vary according to quality and cost. Therefore, a local
customer has an option of selecting a suitable product; however, only a limited number of
companies offer qualified installation and maintenance of the systems.




                   Potential Utilization of Solar Hot Water Systems


Currently, the main consumers of solar hot water systems are private persons and
families. However, small enterprises, hotels, construction companies and other
institutions also show keen interest in this field.

Potential consumers of solar hot water systems are: small, medium and large hotels, open
and indoor swimming pools, public bath-houses, farms, greenhouses, enterprises, and
also private persons and families in the apartment houses or private houses.




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                  Economic Viability Analysis based on Case Studies


Based on the four specific examples, the economic viability of solar water heating
systems was assessed to determine justification of making investment in this field.

The following examples were selected for case studies:

 1. A small family, technically viable system at relatively low lost;

 2. A large family and high-performance water heating system

 3. Small hotel and high-technology, high-performance water heating system

 4.   Large hotel and high-technology, high-performance water heating system.

System simulation was conducted by particular software – Polysun. This software
facilitated providing of long-term vision of system operation and economic or
environmental effects, based on the local solar irradiation data and specifically selected
characteristics of solar hot water systems.

System cost, cost of traditional water heating system (that may be replaced by solar water
heating system), energy carrier tariffs and expected changes in these tariffs, lifetimes of
solar and traditional systems, level of annual solar insulation in Tbilisi and other
significant parameters for simulation are included in the calculations.

Constant characteristics used for all the below listed examples:

 Electricity Tariff                               0.108 USD / kWh (16 tetri)
 Cost of annual maintenance of the solar          0.5% of the cost of the system
 system
 Solar system lifetime                            20 years
 Expected electricity tariff change               Average - after 2013 +10%, after 2020
                                                  +5%. (Real increases, excluding inflation)
 Location                                         Tbilisi
 Orientation of collectors                        South
 Collectors’ dip angle                            45°




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            Simple Water Heating System for a family with three members



System characteristics:


     Passive system, enclosed circuit (winter-
     summer)
     Hot water tank - enameled 110 litters.
     Collector – flat, aluminized, prismatic solar
     reflector, 1 - 1.8 m2.
     Price of the system and installation– USD1300.




Economic effect: payback period of initial investment - 6 years.
Environmental effect: equivalent CO2 - 0.916 tons per year




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           Solar Water Heating System for a Private House (7-10 members)


System characteristics:
           Active system
           Hot water tank - dual-profile, enameled 500 litters.
           Collector – flat, copper, prismatic solar reflector, 7 pieces - 14 m2.
           Price of system and installation – USD7900
           water consumption – up to 392 litters /day (average annual)


System Diagram:




Share of solar performance hot water in the total consumption annually per months - %:




Economic effect: payback period of the initial investment - 6 years.
Environmental l effect: equivalent CO2 - 5.094 tons per year
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                     Solar Water Heating System for a small hotel
System characteristics:
           Active system
           Hot water tank - dual-profile, enameled 1000 litters.
           Collector – flat, copper, prismatic solar reflector, 12 pieces - 24 m2.
           Price of system and installation – USD11000
           Water consumption – up to 859 litters /day (average annually)


System Diagram




Share of solar performance hot water in the total consumption, annually per month - %:




Economic effect: payback period of the initial investment - 5 years.
Environmental effect: CO2 equivalent -10.737 tons per year

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              Solar Water Heating System for a large hotel or enterprise
System characteristics:
           Active system
           Hot water tank - dual-profile, enameled 7000 litters.
           Collector – flat, copper, prismatic solar reflector, 100 pieces - 200 m2.
           Cost of system and installation – USD47000
           Water consumption – up to 6000 litters/day (average annually)
System Diagram:




Share of solar performance hot water in the total consumption annually per month - %:




Economic effect: payback period of initial investment - 4 years.
Environmental effect: CO2 equivalent - 66.656 tons per year

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                       Cost Benefit Analysis, Recommendations

As shown in the above examples, solar hot water systems cover 75-85% of annual hot
water demand and accordingly cost of hot water decreases in similar ratio.

We can also conclude that the bigger and more dimensioned the system is, the more
beneficial and economically justified is installation of such system, i.e. the more water is
consumed daily, the more reasonable for the consumers is installation of such systems.

Generally, none of the consumer remains a loser, as correctly installed high-quality solar
water heating system’s lifetime is above 20-25 years and initial investment payback
period is 3-7 years. The most important for the customer is to make a careful choice and
determine which system is offered and how professionally it is installed.

Based on current trends in Georgia, it is evident that in the near future alternative energy
sources will be rapidly developed. However, there still exists such barriers as limited
dissemination of information in population, institutional barriers etc. At the same time, it
should be mentioned that the Government may take on an important and decisive role in
addressing the above barriers .

In addition, it is essential to create specific preferential credit lines for renewable
technologies that will support development of this field.




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