Why Aren't PVT Panels Everywhere? A Look at the Economics

TL;DR

PVT panels are economically unfavorable relative to PV panels by at least a factor of 3-4. Furthermore, the additional thermal generation of PVT panels doesn't align with demand (high thermal production in summer, low in winter) doing little to improve the value of PVT panels relative to PV panels.

What is PVT?

Photovoltaic Thermal (PVT) technology sounds like the best of all worlds. By combining photovoltaic cells and solar thermal collectors into a single panel, PVT promises two key synergistic benefits: (a) capturing more total energy (electricity + heat) per unit area than either technology alone, and (b) potentially improving PV electrical performance by using the thermal collection fluid to cool the cells.

In theory, this should lead to higher energy capture per square meter, and potentially per dollar invested, making PVT especially attractive for distributed energy resources (DERs) like rooftop installations where space can be limited.

So, why have PV panels dominated and PVT panels remained niche? The primary hurdles are:

1. Cost: PVT panels carry a significant cost premium over standard PV panels.
2. Economics: Most solar installations aren't limited by roof space. Often, systems are sized based on economics, and with compensation rates for excess solar generation declining, homeowners frequently install fewer panels than their roof could hold, reducing the incentive to maximize energy capture per area.

Note: We will use kWe/kWhe to indicate units electricity and kWT/kWhT to indicate units of thermal.

Comparing Apples to Apples: PVT vs. PV

When evaluating the cost-effectiveness of PVT, comparing it to the grid isn't the most relevant metric. Instead, we should compare it directly to installing standard PV panels, potentially coupled with other technologies like heat pumps.
Finding consistent pricing for PVT is challenging due to lower manufacturing volumes. For this analysis, we'll use pricing from Hydrosolar, a Canadian company that sells both PVT and PV panels, allowing for a more direct comparison using numbers from a single source.

• Hydrosolar PVT Panel: 350 W electric + approx. 1400 W thermal output (Price: $1,206 CAD)
• Hydrosolar PV Panel: 400 W electric output (Price: $178 CAD)

The Simple Math

For the price of one PVT panel ($1,206), you could purchase about 6.78 standard PV panels ($1,206 / $178).

• One PVT Panel: Total output = 350 We + 1400 WT = 1750 Wtotal.
• 6-7 - PV Panels: Total output = (6 to 7) * 400 We = 2400 - 2800We.

Clearly, for the same capital cost on panels, the PV-only option yields significantly more raw power output – specifically, much more high-value electrical output.

What About Heating with Heat Pumps?

One might argue the thermal output of PVT is valuable for heating. Let's compare the heating potential by assuming the electricity from the PV panels runs an air source heat pump. We'll use a conservative Coefficient of Performance (COP) of 2, typical for very cold conditions.

• PVT: (350 Welectric used by heat pump * COP 2) + 1400 Wthermal = 700 WT + 1400 WT = 2100 WT.
• PV: (2400 Welectric * COP 2) = 4800 WT. (Using the lower end of the 6-7 panel range)

Even with a low COP, the PV-only setup combined with a heat pump delivers more than double the thermal energy for the same initial panel investment. As the COP improves in milder weather, this advantage grows further in favor of standard PV.

Installation Costs

Could PVT save money on installation by requiring fewer panels for a given thermal output (as shown above, one PVT panel delivers roughly the heat of two PV panels running a COP 2 heat pump)? While fewer panels might seem simpler, PVT panels add complexity. They require not only electrical wiring but also plumbing for the thermal fluid, potentially increasing installation labor and material costs compared to a PV-only installation of the same panel count. Let's conservatively assume installation costs per panel are roughly similar for now.

The Timing and Value Mismatch

Perhaps PVT could compete if its price dropped significantly? Let's estimate a target price. If we convert the PVT's thermal output to an electrical equivalent using a generous but realistic effective COP of 3 (representing year-round domestic heating displacement), the panel has an equivalent output of 350 We + (1400 WT / 3) ≈ 817 We. This is roughly double the 400 We of the standard PV panel, suggesting PVT might be competitive if it cost at most twice as much as a PV panel.

However, this ignores a critical factor: when the energy is produced and what type it is.

• Summer: PVT panels produce ample electricity and a large amount of thermal energy (hot water). However, demand for space heating is zero, and hot water demand is typically lower. This excess thermal energy is generated when it's least valuable, and seasonal storage is prohibitively expensive. Extra PV electricity, conversely, is valuable for running air conditioning.
• Winter: This is when the thermal energy is most needed. Unfortunately, PVT thermal output significantly decreases in colder temperatures and lower sunlight, precisely when demand peaks. PV electrical output also drops but generally less dramatically, and cold temperatures can even slightly improve PV cell efficiency.

The value of PVT's combined output isn't consistently high throughout the year. We'd often prefer more electricity (from cheaper PV panels) over excess heat in summer and find PVT's heat lacking in winter.

Where Does This Leave PVT?

For PVT panels to reach that hypothetical price point of ~2x a standard PV panel (around $350-$400 based on Hydrosolar's PV price), their current cost ($1,206) needs to drop by a factor of roughly 3 to 3.5. While steep price reductions occurred historically for PV panels as manufacturing scaled, achieving similar reductions for PVT faces headwinds:

1. The dominance of cheaper PV panels limits the market growth needed for PVT to achieve economies of scale.
2. The underlying technologies (silicon PV cells, thermal collectors) are relatively mature, suggesting less room for drastic manufacturing cost reductions compared to the early days of PV.

Therefore, while not impossible, it seems unlikely that PVT will become mainstream soon. It will likely remain a niche solution for specific applications like off-grid homes with significant heating/hot water needs or situations with extreme space constraints where maximizing energy per area is paramount.

A Lesson in Technology Adoption

This situation is a fascinating example where a technology that appears optimal on paper (PVT maximizing energy capture) struggles against a "good enough" incumbent (PV). The existing solution (PV) is so cost-effective that it creates a significant economic barrier, or "local optimum," making it difficult for the potentially "globally optimal" solution (PVT) to gain traction. It's a reminder, especially for engineers, that technology adoption hinges not just on performance and features, but critically on cost, practical value, and market inertia.