NDC4 #Solar13: PV-powered Room Air Conditioning: Market trends and techno economic potential

Purpose & context

• The webinar was hosted by GIZ / C42 project and aligned with the GCI – Green Cooling Initiative.
• It presented an updated study (2025) on market trends and techno-economic potential for solar PV-powered room air conditioning (PV-AC).
• The modeling focus was a single split-type AC system up to 5 kW, for:
  • Residential and small commercial use
• Three system cases were considered:
  • Hybrid (grid-connected) PV + AC systems
  • Off-grid PV + AC systems with battery storage
  • An additional technical case: off-grid PV + AC using ice storage (economics not yet updated)

Market / strategic framing (demand & emissions drivers)

• AC demand is rising quickly due to population growth, urbanization, and climate change.
• Split AC units are projected to grow from ~850 million (earlier referenced baseline) to >3.7 billion by 2050.
• The implied strategy in the study is to improve “green cooling” economics and impact via a combined pathway:
  • Solar PV + energy-efficient AC + climate-friendly natural refrigerants (e.g., R290 in the ice-storage concept)

Study update: what changed from 2022 → 2025

The 2025 update aimed to improve realism and cost assumptions:

• Country coverage: increased by +4 countries
  • Added: Albania, Brazil, Tunisia, South Africa
• AC investment costs:
  • Updated from a global constant (2022) to country-specific values
• PV technology mix:
  • Updated PV modules from polycrystalline (2022) to monocrystalline dominance
• Updated economic/system inputs, including:
  • Electricity prices
  • Inflation rates
  • PV CAPEX
  • PV feed-in tariffs
  • (plus other cost values used in simulations)

Business/technical methodology (simulation framework)

System options

• Hybrid grid-connected PV-AC
  • PV + inverter supply; no battery
  • Grid acts as backup when solar is unavailable
• Off-grid PV-AC
  • No grid connection
  • Battery storage included for night/cloudy periods

Building types

• Residential (smaller load)
• Small commercial (larger load)

Geography / location granularity

• For each country, the model used 3 locations based on GHI (Global Horizontal Irradiation):
  • Minimum / average / maximum GHI within that country
• Total simulation scale:
  • 2 system types × 2 building types × 3 locations × 17 countries = 204 runs

PV modeling assumptions

• Monocrystalline silicon PV
• Average global module efficiency: ~16.4%
• Module orientation: south (or north in southern hemisphere)
• Tilt: optimized by latitude

Economic evaluation metrics (core “playbook”)

Headline financial metrics

• LCOE / LCE (Levelized Cost of Electricity)
  • Compares “cost to generate 1 kWh” with/without feed-in tariffs
• NPV (Net Present Value)
  • Incorporates earnings (e.g., from feed-in tariffs) where applicable
  • A higher NPV vs base case indicates the PV-driven system can outperform standard grid AC over its lifetime

Key economic assumptions mentioned

• Plant lifetime: 20 years
• Discount / interest rate: 5%
• OPEX: PV module operating expense = 1.5% of CAPEX per year
• CPI: country-specific
• Feed-in tariffs: country-specific where present

Base case for NPV comparisons

• Conventional grid-connected AC:
  • R410A refrigerant
  • Grid AC purchased and operated using grid electricity (no PV)

Interpretation rule and “plus” framework

• If the PV-driven system’s NPV beats the base case, PV AC is considered economically justified.
• Outcomes were summarized using a “plus” logic:
  • 3 pluses: near zero lifetime cost
  • 2 pluses: economically feasible (NPV higher than base case)
  • 1 plus: sensitivity range (strongly depends on location/solar resource)
  • No plus: not economically feasible

Key results (quantified business insights)

1) Hybrid PV-AC vs grid AC (financial advantage)

• For hybrid (grid-connected) PV-powered AC:
  • 15 out of 17 countries show financial advantage
  • Exceptions: Iran, Tunisia
• For small commercial systems:
  • 16 out of 17 countries show advantage
  • Exception: Iran

2) Off-grid PV-AC with batteries (feasibility is more limited)

• Off-grid PV-AC (battery-based):
  • 10 out of 17 countries feasible
  • Exceptions listed: China, India, Iran, (Sagal/Sa?), South Africa, Tunisia, Vietnam
    • (The “Saga/Sa?” entry is slightly garbled in the source text.)
• For small commercial off-grid, feasibility is again reported as 10/17, with a slightly different exception set:
  • Exceptions include: China, India, Iran, (Saga/S…), Thailand, Tunisia, Vietnam

3) Role of feed-in tariffs (illustrated with concrete country examples)

• Location matters within a country because of GHI variation:
  • Example: Colombia
    • Average location may look favorable
    • But minimum-GHI location can be unfavorable
• Feed-in tariffs can strongly improve PV economics:
  • Ghana
    • Without feed-in tariff: LCOE ≈ grid electricity cost → little advantage
    • With feed-in tariff: LCOE reduced to ~zero
  • Grenada
    • After subtracting feed-in tariff value, negative LCOE can occur (described as being paid for excess PV export)

Ice storage alternative (technical case; economics not updated)

Why included

• Batteries may be economically prohibitive off-grid, so the study tested ice storage as a substitute.

Technical concept

• Off-grid PV powers an AC system modified to use natural refrigerant R290 (propane mentioned in the text).
• Excess PV electricity is used during daytime to freeze ice in a storage tank.
• At night:
  • The system uses stored cold via a glycol-water secondary circuit to run the indoor unit.

Case study boundary conditions (South Africa)

• No grid connection
• Location coordinates: South Africa
• AC capacity: ~2.5 kW peak
• PV peak power: ~1.5 kW
• Ice tank: 216 kg water/ice
• Thermal storage: ~20 kWh
• Comfort/cooling start threshold: 21°C
• Hourly climate thresholding:
  • AC operates when ambient > 21°C
  • Resulting intensity:
    • 3,863 hours/year (~161 days)
    • Thermal cooling demand: ~5 MWh/year

Coverage result (Key KPI-style output)

• With ice storage + direct PV cooling:
  • 92% of annual cooling load met
  • Breakdown:
    • 69% via direct PV operation
    • 22% via ice storage nighttime operation
    • 8% uncovered (ice tank empty / no sun)

Sensitivity analysis / targets

• To raise “solar fraction” (coverage):
  • 100% solar fraction can be achieved by increasing ice tank size and/or adjusting comfort threshold
• Trade-offs expressed with “cooling threshold temperature”:
  • Keep threshold at 21°C → requires ~0.5 tons of ice
  • Reduce ice to ~86 kg → accept warmer operation (up to ~26°C threshold)

Unmodeled / limitations

• No detailed modeling of tank temperature stratification (energy-based ice freezing only).
• Economics for ice storage were not calculated yet in this update.

Actionable recommendations (implied by results)

• Prioritize hybrid systems where grid backup exists:
  • Favorable economics in most modeled countries (15/17)
• Use feed-in tariffs where available to improve PV economics:
  • Can move LCOE/NPV from marginal to strongly positive (examples: Ghana, Grenada)
• Treat geography as a design variable:
  • Solar resource distribution within countries can change feasibility (example: Colombia)
• For off-grid projects, focus on constraints:
  • Battery-driven off-grid economics feasible in only ~10/17 cases → require careful, country-specific techno-economic assessment
• Consider ice storage as an off-grid alternative to batteries:
  • Demonstrated technically feasible coverage up to ~100% with appropriate tank sizing and comfort thresholds

Presenters / sources

• Claudia Alvarez — Head of the C42 project (opening remarks)
• Professor Paul Kumbach — Study author; Founder/owner of Soemle Consulting
• Professor Dr. Uli Jakob — Co-author (mentioned by Kumbach as co-author; honorary professor)
• Miland Des Sanaka — Facilitator / intern (context and agenda)
• Theresa Brunes — Technical assistance (facilitation support)