A discussion on the efficiency of solar or geothermal power needs to look at many different aspects, making this question not as black and white as it may appear at first glance. First, efficiency needs to be defined. Second, local conditions need to be taken into account. Third, the use of the energy and the setting need to be taken into account. This last category will also include whether the efficiency is in terms of using it for a home, or a commercial environment.
Overall, when considering types of power, solar or geothermal power each offer some very good alternatives to traditional power sources. Solar panels, even the best on the market, may only convert a small percentage of their energy to electricity, often 20% or less. Geothermal power may not offer any better of a solution. In fact, geothermal power is not used at all for electricity production for individual homes. To use geothermal for electrical generation, it is necessary to use very hot temperatures near the Earth's surface. The conditions for this type of generation are available in only a few places on the planet, such as Iceland, and once a source it is tapped, it general is used to provide for an entire community. The average efficiency of geothermal power plants is approximately 16%, making them comparable to solar forms of energy.
Efficiency can be defined as a ratio. On one side you have the energy input, and on the other side you have the energy output. To make the energy useful, be it solar or geothermal, a conversion must take place. For example, a furnace must take the energy it receives, and convert it into heat. During this conversion, a process known as entropy takes place, which simply means the energy potential is less than what existed in the original state. This is also known as the second law of thermodynamics. The entropy is deemed expendable, simply because the process creates a more practical use for the energy.
In most cases, while energy efficiency will result in lower energy bills for the individual, that may not always be the case with solar or geothermal energy. The most significant costs, in both cases, are the installation costs. The equipment and installation for both can be somewhat expensive. Also, the inputs may not be the same in all areas. For example, it may be possible to have a very efficient solar system, capable of converting most of the sun's energy to useful electricity, or other forms of energy, but if there is no direct sunlight, then the most efficient system in the world will do no good.
When considering solar or geothermal this is why location is so important. Of course, geothermal energy is available anywhere, to some extent. The process of drilling to get the geothermal energy may not be easy, depending on the ground conditions. This could lead to extra expense. Thus, even though the technique may be very energy efficient, it may not be very cost efficient.
