The Economics of Geothermal, Solar, and Conventional Space Heating

Abstract

The competitive outlook for geothermal and solar heating changed dramatically during the past year. With the recent sharp price increases in improved oil and natural gas and the planned decontrol of domestic prices, geothermal and solar energy will become competitive for space heating throughout most of the country. Under these new conditions, geothermal energy could competitively provide about 40% of the national demand for space heat and domestic hot water (about 7 quads based on 1980 demands). Nearly all of the geothermal energy demand would be in high population density areas. Solar energy could competitively provide about 50% (about 9 quads) of the annual demand. Most of the solar energy demand would be concentrated in suburban and rural areas. Conventional energy should remain competitive for about 30% (about 5 quads) of the annual demand. Conventional energy demand would be concentrated in the South as a supplemental energy for solar/conventional systems. Geothermal, solar, and conventional energy would be equally competitive for about 2-% of the annual demand, which is why the individual market shares add to 120%.