Concentrating solar thermal power and photovoltaics are two major technologies for converting sunlight to electricity. Variations of the annual solar irradiation depending on the site influence their annual efficiency, specific output and electricity generation cost. Detailed technical and economical analyses performed with computer simulations point out differences of solar thermal parabolic trough power plants, non-tracked and two-axis-tracked PV systems. Therefore, 61 sites in Europe and North Africa covering a global annual irradiation range from 923 to 2438 kW h/m(2) a have been examined. Simulation results are usable irradiation by the systems, specific annual system output and levelled electricity cost. Cost assumptions are made for today's cost and expected cost in 10 years considering different progress ratios. This will lead to a cost reduction by 50% for PV systems and by 40% for solar thermal power plants. The simulation results show where are optimal regions for installing solar thermal trough and tracked PV systems in comparison to non-tracked PV. For low irradiation values the annual output of solar thermal systems is much lower than of PV systems. On the other hand, for high irradiations solar thermal systems provide the best-cost solution even when considering higher cost reduction factors for PV in the next decade. Electricity generation cost much below 10 Eurocents per kW h for solar thermal systems and about 12 Eurocents/kW h for PV can be expected in 10 years in North Africa. (C) 2004 Published by Elsevier Ltd.