Quick Facts
Solar PV and Solar Thermal differences
Solar PV (Photovoltaic) and Solar Thermal are the two main solar technologies, distinguished by what they convert sunlight into.
Solar PV: Converts sunlight directly to electricity using semiconductor cells. The cells use the photovoltaic effect: photons excite electrons, creating electric current.
Solar Thermal: Converts sunlight to heat. The heat can be used directly (water heating) or further converted (CSP uses heat to generate steam for electricity).
The two technologies serve different purposes:
PV is best for electricity generation.
Solar Thermal is best for heat applications.
For Indian solar applications, PV dominates by an overwhelming margin. Solar Thermal is niche, with solar water heaters being the main application.
Why PV dominates
PV has gained dominance for several reasons:
Cost: PV CAPEX has fallen 80% over the past decade. Below Rs 30,000 per kWp.
Modular scalability: Easy to scale from 1 kW residential to 1 GW utility.
Easy deployment: Rooftop, ground-mount, agrivoltaics, BIPV.
No water requirement: Unlike CSP, PV doesn’t need water for operation.
No moving parts: Simple, reliable, low maintenance.
25-year warranties: Established long-term reliability.
Manufacturing scale: Massive global manufacturing capacity.
For most electricity generation applications, PV is significantly more economical than solar thermal alternatives.
Solar Thermal applications
Solar thermal still has niches:
Solar water heaters: Wide deployment in Indian households. Evacuated tube and flat-plate collectors. Government subsidies historically.
Industrial process heat: Some industrial applications use solar thermal for hot water, steam, or process heat. Sectors: textiles, food processing, pharmaceuticals.
Space heating: Limited in India due to climate. More common in Europe.
District heating: Large-scale community heating. Not common in India.
Concentrating Solar Power (CSP): Uses mirrors to focus sunlight, generates high-temperature heat for steam turbines.
For Indian applications:
Solar water heaters: 10+ million units installed across India.
CSP: About 200 MW operational (mostly 2010-2014 vintage).
Process heat: Small but growing market.
For new electricity generation, PV is the choice. For specific heat applications, solar thermal may be considered.
Concentrating Solar Power (CSP)
CSP technology:
Mirrors or lenses focus sunlight onto a receiver.
Receiver heats a working fluid (steam, molten salt) to high temperature.
Heat drives a steam turbine, generating electricity.
Requires high DNI (direct normal irradiance).
Indian CSP:
About 200 MW operational.
Plants: Reliance Power’s plant, Godawari Green Energy, Megha Engineering.
Built 2010-2014 under JNNSM Phase II.
Limited new construction since.
CSP vs PV:
CSP efficiency: 15-25% sunlight to electricity.
PV efficiency: 18-22% sunlight to electricity.
CSP CAPEX: significantly higher than PV.
CSP needs water for cooling (most types).
CSP has thermal storage capability (energy storage in molten salt or hot oil).
PV needs batteries for storage.
Modern competitors:
PV with battery storage has largely displaced CSP for dispatchable solar.
PV + battery is cheaper than CSP for most applications.
CSP retains some advantages for very-long-duration storage and high-temperature industrial applications.
Solar water heaters
Solar thermal water heaters:
Flat-plate collectors: Insulated black plates with circulating water tubes.
Evacuated tube collectors: Glass tubes with vacuum insulation, more efficient.
Storage tanks for hot water.
Installation: Rooftop with south-facing tilt.
Capacity: 100 to 500 litres typical residential.
Indian market:
Millions of units installed.
Government subsidies historical.
Solar water heater obligations in some states for new constructions.
Cost: Rs 25,000 to Rs 60,000 for typical residential.
Lifetime: 15-25 years for quality systems.
For homes with significant hot water use (geyser-replacement), solar water heaters provide good economics. ROI typically 3-5 years.
PV vs Solar Thermal for water heating
Two options for solar-powered water heating:
Solar thermal water heater: Direct sunlight to hot water. Established technology.
PV + heat pump: PV electricity drives a heat pump for water heating. Newer approach.
PV + heat pump advantages:
Higher overall efficiency (heat pump COP of 3-4 means 1 unit electricity produces 3-4 units of heat).
Same PV can power other appliances when water hot.
More flexible.
Solar thermal advantages:
Lower upfront cost typically.
Simpler installation.
Established service infrastructure.
For new installations, both approaches are valid. PV + heat pump is gaining share for new construction.
Solar thermal industrial process heat
Industrial applications:
Hot water for textile dyeing.
Steam for food processing.
Process heat for pharmaceuticals.
Drying applications.
Indian industrial solar thermal:
Limited scale (less than 1 GW thermal equivalent).
Concentrated in specific sectors.
MNRE has supported pilot programs.
The market is growing but slowly.
Common solar PV vs thermal mistakes
Specifying solar thermal for electricity applications. PV is generally better.
Specifying PV + electric heater for hot water. Solar thermal or PV + heat pump may be more efficient.
Treating CSP as alternative to PV. Different applications, different economics.
Underestimating solar thermal’s water requirement. Most CSP needs significant water.
Ignoring industrial process heat opportunities. Some industrial uses justify solar thermal.
Best practices
For electricity generation:
PV is the standard choice.
CSP only in specific high-DNI locations with appropriate scale.
For hot water:
Solar thermal water heaters: traditional choice.
PV + heat pump: emerging alternative.
For industrial heat:
Evaluate solar thermal vs PV-driven electric heating.
PV with battery for dispatchable electricity often outperforms CSP.
For new construction:
Consider hybrid PV + solar thermal for comprehensive solar use.
For long-term:
PV with batteries is increasingly displacing CSP and electric thermal.
Standards and references
PV: IEC 61215, IEC 61730. Solar thermal collectors: IS 12933 series. Solar water heaters: BIS certification. CSP: international and Indian standards combination. MNRE policies cover both PV and thermal applications.
Related glossary terms
Key takeaways
Solar PV (Photovoltaic) converts sunlight directly to electricity using semiconductor cells. Solar Thermal converts sunlight to heat for applications like water heating, industrial process heat, or electricity via CSP. PV dominates Indian solar applications due to lower cost, modular scalability, and easier deployment. Solar Thermal remains relevant for specific applications: water heating (millions of installations in India), industrial process heat (small but growing), and CSP (limited at about 200 MW). For new electricity generation, PV is the standard. For hot water and some industrial heat, solar thermal or PV + heat pump are alternatives. PV with battery storage has largely displaced CSP for dispatchable solar in India.