A Cost-Effective and an Economic Analysis of Alternative Water Heating Systems in North Cyprus

This dissertation reports on a cost-effectiveness and an economic analysis of four types of water heating system operating in North Cyprus where there is an unreliable water supply. These systems are electric water heating, a solar water heating system (SWHS) with electricity back-up, the SWHS with a liquefied petroleum gas (LPG) water heater, and an LPG water heater alone. This study finds that in situations where there is a winter or a rainy season, the choice of the source of energy for SWHS’s back-up during this period is critical for its overall cost-effectiveness. Although an SWHS with electricity back-up is far superior to using electricity alone, it is inferior to heating water with either an LPG water heater alone or an SWHS with an LPG back-up. It is found that in the conditions of North Cyprus, an SWHS with an LPG heater back-up is both financially and economically the most cost-effective, most convenient and most environmentally friendly system for households with more than two members, while LPG water heater alone are the most cost-effective for smaller households. Furthermore, if a reliable supply of water is available, the cost of heating water is reduced by 15% for the SWHS with LPG back-up and for the heating of water by the LPG heater alone. A major finding that emerges from this study is that in climates where SWHSs are not able to deliver adequate energy throughout the year, it is very important to take into consideration what is to be used as the source of back-up energy. Many countries have been providing financial incentives to promote SWHSs and it is usually assumed that electricity will be the back-up source of energy when solar energy is insufficient. This study points to the critical importance of having a policy for SWHSs that does not simply promote the installation of SWHSs, but that also promotes the appropriate auxiliary source of energy for supplementing the SWHS. Keywords: Cost-effectiveness analysis; water heater systems; households; North Cyprus.