THE COST-EFFECTIVENESS OF SOLAR WATER HEATING IN THE SOUTH EUROPE REGION

Many countries in South Europe region, like Montenegro, are suffering from the lack of energy. The increasing demand for energy is a consequence of switching to the new political system, democracy, free market, and sometimes uncontrolled development. However, only small steps are done to fulfill these requirements by implementing energy efficiencies, alternate renewable energy sources, new energy policy etc. Solar water heating (SWH) is probably the most promising, reliable and mature technology, where the price of saved electricity is less than the current price of electricity in this region. The main reason for that is in simplicity of use such energy without its transformation to the end use, and the savings in costs of energy distribution. Furthermore, the environmental impacts associated with its use, are much less harmful than in other energy sources. There is well developed methodology for estimating the attractiveness of implementation of such technology. Discount cash flow analysis is applied for calculation the price of such kind of energy. The critical factors of an economic analysis are the available quantity of solar energy in the region, the costs of solar system and its energy efficiencies, and the cost of operating conventional or backup water heating systems. These factors severely influence the final costs of energy. The analysis is conducted in accordance to current state of the prices of electrical energy in Montenegro and the current prices of solar water heating technologies. The preliminary results are very promising.