A photovoltaic/thermal (PVT) panel is a combination of photovoltaic cells with a solar thermal collector, generating solar electricity and solar heat simultaneously. Hence, PVT panels are an alternative for a combination of separate PV panels and solar thermal collectors. A promising system concept, consisting of 25 m(2) of PVT panels and a ground coupled heat pump, has been simulated in TRNSYS. It has been found that this system is able to cover 100% of the total heat demand for a typical newly-built Dutch one-family dwelling, while covering nearly all of its own electricity use and keeping the long-term average ground temperature constant. The cost of such a system has been compared to the cost of a reference system, where the PVT panels have been replaced with separate PV panels (26 m(2)) and solar thermal collectors (7 m(2)), but which is otherwise identical. The electrical and thermal yield of this reference system is equal to that of the PVT system. It has been found that both systems require a nearly identical initial investment. Finally, a view on future PVT markets is given. In general, the residential market is by far the most promising market. The system discussed in this paper is expected to be most successful in newly-built low-energy housing concepts. (C) 2004 Elsevier Ltd. All rights reserved.